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Opportunity Bank Helps Strengthen Montenegro’s Private Sector
Mali Medo is Montenegro's only children's clothing manufacturing firm. What began as a husband-and-wife entrepreneurial startup has grown considerably. Over the past few years, Mali Medo has transformed from a domestic operation that employed six people into a
regional exporter with 47 employees.
The company is a prime example of the type of business that makes up Montenegro's most vital sector. Small and medium enterprises (SMEs) constitute the largest employer base in many developing countries. Encouraging the start-up and growth of these businesses is critical to stimulating economic activity and reducing unemployment. But, all too often, entrepreneurs have no access to the credit they need to expand their ventures.
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| USAID-sponsored loans enabled Mali Medo to grow into an exporting
organization that employs 47 people |
Organizations like Opportunity Bank Montenegro fill a wide gap between traditional lending institutions and the country's SMEs. USAID helped found Opportunity Bank in 2002 to further job creation and help residents attain a higher quality of life. Since its inception, Opportunity Bank has served nearly 80,000 customers and disbursed more than $88 million in loans. The
SME lender has designed its services to accommodate the needs of borrowers by providing many transaction services free of charge. It calculates that it has created thousands of jobs.
According to Opportunity Bank, SME lenders must focus on building strong partnerships
with local entrepreneurs. They found one such partnership with the Medojevics, the husband-and-wife entrepreneurs who opened Mali Medo. The company's first loan of 5,000 euro was repaid on time, paving the way to a second loan of 30,000 euro. After successfully closing
this loan, Mali Medo was approved for a third loan of 100,000 euro.
The capital has helped Mali Medo expand its production capacity and market penetration. Formerly a domestic clothing supplier, the firm has started exports to Bosnia. Negotiations to expand exports to neighboring Croatia are currently underway.
According to the Medojevic family, Opportunity Bank is helping entrepreneurs create jobs in an economy that sorely needs new employment opportunities. And, it's around to stay. As three years of USAID support comes to an end, the bank is able to stand on its own and potentially expand its operations. The bank now has 10 branches throughout Montenegro and increasingly attracts interest from other financial institutions interested in establishing or expanding their credit lines in the country.
Currently, Opportunity Bank is finalizing details for a six-million-euro line of credit that will help SMEs grow in Montenegro. Its work with local start-up businesses like Mali Medo will continue to generate economic activity and job creation, which are important returns on the American people's investment in Montenegro through USAID.
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