USAID's Finance Facility Program

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USAID PRESS RELEASE

USAID's Bosnia Reconstruction Finance Facility Program

Industrial production in Bosnia is operating today at approximately five percent of pre-war levels. As part of the U.S. government's efforts to promote economic revitalization in Bosnia, USAID's Bosnia Reconstruction Finance Facility Program (BRFF) is providing balance of payments support for needed imports and commercial credit in the form of quick-disbursing loans to Bosnian businesses.
The BRFF program will help jump-start the economy, generate employment opportunities, and contribute to the rapid downsizing of local armies in support of IFOR's (NATO's Implementation Force) mission, while generating income for families and communities ravaged by war.
The five-year program is designed for $278 million in life-of-project funding, with $68 million planned for disbursement in the first year. Loans will also be made from repayment proceeds under the same lending criteria as initial loans. The program principally targets small and medium-sized enterprises. The first disbursement of $27.5 million is now available for approved loans.
Four loans to Bosnian enterprises have already been approved totaling $2.1 million. This quick action reflects the tremendous demand by Bosnian firms anxious to resume business activity but lacking working capital and medium-term financing. These initial loans are expected to provide employment to 771 Bosnians, including demobilized soldiers and women adversely affected by the war, representing a mix of ethnic backgrounds. For example, one loan will facilitate the merger of a Muslim- owned sawmill and a Croat-owned wood flooring manufacturer that together will benefit from related economies of scale. Three of the recipient businesses are privately-owned operations, including one that is 30 percent privately-owned and in the process of fully privatizing.
Review of loan applications and oversight of the approval process will be managed on-site by Development Alternatives, Inc. (DAI) and experienced professions recruited from major American banks, including Chase Manhattan, Citibank, First Chicage and Bank of America.
The BRFF will concentrate activities in the U.S. IFOR sector, including Tuzla and Zenica, and in Sarajevo and contiguous areas.
The Bosnian government is in arrears to international banks and financial institutions. At the same time, the commercial banking system lacks the liquidity and technical skills to provide credit for the economic recovery. USAID's BRFF helps address these problems. In addition to the provision of technical assistance for local enterprises, the program will finance training for banking institutions to increase their economic viability, promote adherence to international banking standards, and integrate the Federation's banking system.
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9 August 1996
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This is an archived USAID document retained on this web site as a matter of public record.

Last Updated on: July 12, 2001