The proposed Law on the Credit Guarantee Fund aims to stimulate and accelerate Montenegro’s economic development by improving access to financing for businesses, entrepreneurs, and individuals engaged in entrepreneurship.
Nik Đeljošaj, Deputy Prime Minister for Economic Policy and Minister of Economic Development, presented the bill in Parliament, highlighting its importance for the country’s economic growth. The main goal is to support micro, small, and medium-sized enterprises (MSMEs) by targeting those underserved by traditional financing due to strict banking regulations, lack of collateral, insufficient financial management capacity, or limited credit history.
The Fund will reduce lending risks by providing partial guarantees for loans approved by commercial banks. It will particularly focus on riskier market segments such as startups, youth, and women with viable business ideas but limited access to external financing.
The Credit Guarantee Fund’s services are expected to boost business activity, leading to job creation, increased turnover and profits, new goods and services, and enhanced competitiveness of the Montenegrin economy.
Montenegro’s strategic partner in establishing the Fund is the European Bank for Reconstruction and Development (EBRD). The Fund will operate independently with an initial capital of €10.6 million provided by the government. Of this, €600,000 will be used to set up the Fund’s operations, while €10 million will support economic activities.
Loan guarantees will be shared equally, with 50% provided by the Fund and 50% by the lending commercial bank, thus sharing the risk.
Parliamentarians from various parties expressed support for the law. Tonći Janović of the Europe Now Movement emphasized its importance as it targets MSMEs, which make up over 90% of Montenegro’s economy, employ more than 80% of the workforce, and account for 75% of exports—yet have limited access to finance.
Danijel Živković from the Democratic Party of Socialists warned about the country’s economic challenges, including inflation, lack of investment, budget revenue decline, and poor tourism performance, questioning how progress can be made under these conditions.
Zdenka Popović from Democratic Montenegro stressed the law’s role alongside the Development Bank law in supporting MSMEs and new entrepreneurs, noting that MSMEs represent 95% of the economy and are key to employment and budget revenues.
Boris Mugoša of the Social Democrats welcomed the discussion but criticized delays, pointing out that a similar proposal was introduced in 2022 but withdrawn, and highlighting that blocked accounts and debts among businesses have nearly doubled over five years.
Dejan Đurović from the ZBCG-Nova Srpska Demokratija praised the law’s potential to support private businesses and hoped that the interest rates under the Fund would be lower than those offered by commercial banks, addressing one of Montenegro’s main economic challenges.
