EU Allocates €60 Million to Boost Small Business Growth in Western Balkans

The European Union (EU) has announced a significant financial initiative designed to support small and medium-sized enterprises (SMEs) in North Macedonia, Bosnia and Herzegovina, and Montenegro. This initiative, part of the Western Balkans Guarantee 4 SME Resilience program, will provide €60 million in loans under favorable lending conditions aimed at enhancing business growth, employment, and competitiveness in the region. Announced on June 25, 2025, this program complements the EU's broader commitment to regional economic development through the Reform and Growth Facility for the Western Balkans, which seeks to improve access to finance for SMEs, a critical factor in fostering inclusive growth and job creation.

The significance of this initiative is underscored by its ability to unlock a total of €886 million in financing for SMEs, thereby supporting approximately 15,000 companies and preserving around 140,000 jobs across the Western Balkans. According to Marjut Falkstedt, Chief Executive of the European Investment Fund (EIF), which is part of the European Investment Bank (EIB) Group, “These guarantees will enable our partner banks to offer loans with favorable conditions to businesses in North Macedonia, Bosnia and Herzegovina, and Montenegro, featuring lower interest rates, reduced collateral requirements, and extended maturities.”

The distribution of the funds indicates substantial financial allocations for each country: North Macedonia is expected to receive over €20 million in concessional loans aimed at approximately 125 small businesses; Bosnia and Herzegovina will benefit from €25 million supporting 150 businesses; and Montenegro will see €15 million allocated to 100 companies. Collectively, these funds are projected to sustain around 5,750 jobs.

Commissioner for Enlargement, Marta Kos, remarked on the strategic importance of this program, stating, “The signature of these new guarantee agreements marks another important step in deepening the EU’s partnership with the Western Balkans. With €4.8 million in EU backing, these guarantees will unlock up to €60 million in concessional loans, significantly improving access to affordable finance for micro, small, and medium-sized enterprises in the region.”

This initiative is further supported by Sparkasse Bank Ad Skopje, Sparkasse Bank BiH, and Erste Bank Podgorica, which have signed guarantee agreements totaling €4.8 million as part of this funding. Christoph Schoefboeck, CEO of Erste & Steiermärkische Bank d.d., expressed optimism about the program’s potential impact, emphasizing the role of SMEs as the backbone of economic development in the region.

Launched in November 2022, the Western Balkans Guarantee 4 SME Resilience has already signed agreements with 18 financial institutions across the region, culminating in €886 million in loans with favorable lending conditions. This is part of the EU's ongoing efforts to bolster economic resilience and pave the way for a closer integration of the Western Balkans into the European Union. The EIF plays a pivotal role in facilitating financial support for SMEs, which are vital for economic growth, innovation, and employment in Europe.

As the region continues to navigate economic challenges, this initiative represents a crucial step toward fostering a competitive and resilient economy capable of withstanding market fluctuations and promoting sustainable growth. The implications of such targeted financial support extend beyond immediate economic benefits; they lay the groundwork for long-term stability and prosperity in the Western Balkans, aligning with the EU's strategic vision for the region's future.