HVB-Bank Bosnia and Herzegovina d.d.

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MIGA has provided a $4.65 million guarantee to Bank Austria Creditanstalt AG of Austria for its $4.9 million shareholder loan to HVB-Bank Bosnia and Herzegovina d.d. (HVB-BH). The guarantee is for a three-year period and provides coverage against the risk of Transfer Restriction. The project's core business includes loans and guarantees, treasury and foreign exchange services, deposit and term account maintenance, and payment transfers for the corporate and retail private sector. In line with the World Bank and IFC's efforts to promote growth through private sector development, the project will focus on small and medium enterprises (SMEs) and on-lend to industries such as metal working, wood-processing, construction and food processing.   HVB-BH expects to bolster the country's financial sector by providing medium-term financing with longer tenors. The strengthening of the financial sector will yield numerous development impacts for Bosnia and Herzegovina. Although the project will not directly contribute to export earnings, it will on-lend to companies which are expected to generate more than $2 million annually in foreign exchange earnings. The project's lending program addresses one of MIGA's priority areas, investment in SMEs.

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