EBRD and EU Expand Montenegro SME Financing

Small businesses in Montenegro are set to gain greater access to financing following a €10 million agreement between the European Bank for Reconstruction and Development (EBRD) and Alter Modus, one of the country’s leading microfinance institutions. Announced on 4 November, the package targets smaller enterprises struggling to secure funding, with particular attention to women, young entrepreneurs and businesses outside the capital, Podgorica.

The financing comprises €7 million for general business lending, €2 million under the Western Balkans Women in Business programme and €1 million for entrepreneurs under 35 through the Youth in Business programme. At least 20 per cent of the general lending facility is expected to support environmentally sustainable investments, including improvements in energy efficiency and resource management.

The European Union is supporting the women’s and youth financing programmes through its European Fund for Sustainable Development Plus, providing risk protection and technical assistance. Luxembourg and Italy are also contributing support through the Central European Initiative. The arrangement aims to make lending more accessible to businesses that conventional financing channels may overlook.

For Montenegro, the initiative extends beyond immediate credit availability. Smaller enterprises play an important role in employment and regional economic activity, yet financing constraints can limit their expansion. As the country progresses towards European Union membership, improving access to investment capital could help domestic firms modernise operations, strengthen competitiveness and prepare for opportunities within the EU single market. The programme also reinforces the growing role of development finance in addressing funding gaps across the Western Balkans.