Case Study

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

Is financial sector development possible in an unstable, high risk environment?
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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.

About this Publication

By Schütte, H. & Erhardt, W.
Published