KfW's Comprehensive Approach to Financial Sector Strengthening: The Case of Bosnia and Herzegovina

This presentation discusses:

• Political and financial sector framework in Bosnia and Herzegovina (BiH) which is characterized by:
  • Civil war from 1992 until 1995;
  • Multi-ethnic state with weak state level government structures;
  • Unreasonable tax and business regulations;
  • Unemployment/poverty/brain drain;
  • Weak and highly undercapitalized banks.
• KfW's Approach to financial sector strengthening in BiH which highlight:
  • Promotion of small and medium enterprises (SMEs);
  • Financial system development;
  • Development of financial services and sound institutions;
  • Micro Enterprise Bank Bosnia;
  • European Fund for Bosnia and Herzegovina (Down-scaling).
• Financial institutions and instruments promoted by KfW:
  • Micro Enterprise Bank (MEB);
  • European Fund for Bosnia and Herzegovina (EFBH);
  • Credit Guarantee Fund (CGF);
  • Federal Deposit Insurance Agency (FDIA).

Finally, the presentation highlights Kfw's learning which includes:

• Comprehensive approach is beneficial; this is reflected by:
  • Improved access to financial services;
  • Structural effects on financial sector at large;
  • Increased competition.
• Financial sector development is possible in an unstable, high risk environment.