Available local finances Credits and financial market

FINANCIAL SECTOR Banking; Micro credit sector; Leasing companies; Insurance companies; Capital market; Other financial services

Increase of bank assets - 12,8 billion KM; Trust and increase of savings - 3,8 billion KM; Out of 32 banks, 23 are in the program of deposit insurance; Joint stock capitall – 1,1 billion KM, out of which 962 milion KM or 87 % is privatly owned; Out of banking potential 7,7 billion KM or 70 % has been placed; Increase of payment transactions volume - in 2005 in BH was realized 36,2 billion KM, and for 10 months of 2006, 38,3 billion KM. Constant decrease of interest rates*. Status of banking sector – June 30, 2006.

Period Interest on credits Private companies Interest on deposits Population Rates on short term credits Rates on long term credits Rates on sight deposit Long term saving XII ,07%10,59%1,44%4,38% XII ,54%9,18%0,96%3,40% XII ,92%8,23%0,77%4,02% XII ,03%7,70%0,63%3,63% XII ,66%7,39%0,49%3,48% Interest rates

Banking in Brcko DC 1.Hypo Group Alpe Adria 2.Raiffeizen bank Sarajevo 3.UPI banka d.d. Sarajevo 4.Prokreditbanka Sarajevo 5.Nova banjalucka banka 6.Nova banka a.d. Bijeljina 7.Micro Enterprise Bank d.d Sarajevo 8.Privredna banka d.d. Sarajevo 9.Pavlovic international banka Slobomir, Bijeljina 10.HVB Central Profit Banka 11.Volks Bank d.d. Sarajevo 12.Bobar banka a.d. Bijeljina 13.Bosna Bank International d.d.Sarajevo 14.Zepter Komerc banka a.d. Banja Luka 15.Tuzlanska banka d.d. Tuzla 16.Gospodarska banka d.d. Sarajevo 17.Uni Credit Zagrebačka banka BiHd.d. Mostar 18.ABS banka d.d. Sarajevo 19.Razvojna banka za jugoistocne Evrope Banja Luka 20.Komercijalna Banka a.d. Banja Luka

Activities on crediting the categories that have no access to banking sector; credits were placed in 2005 in total amount of 441 mil KM, and on June 30, 2006, credits have been placed in total amount of 240 mil KM; Active portfolio in 2005 was 315 milion KM, on June 30, 2006 was 364 milion KM; Number of active clients in 2005 was , and on June 30, 2006 was ; Average amount of credit in 2005 was KM, and on June 30, 2006 this amount was KM Micro credit organizations

MCO in Brcko DC ˝EKI˝ Micro credit organization, Branch office Brcko – Klosterska 31, Phone. 230– 310 ˝LOK Micro credit organization, Sarajevo, Branch office Brcko – 8 Mart 10, Phone ˝PARTNER” Micro credit organization˝ Tuzla, Branch office Brcko J. Dučića bb, Phone MI BOSPO Micro credit organization, Miroslava Krleze 13 Brcko, Phone

Since until today are 6 leasing companies in BH Value of concluded contracts on leasing in milion EUROs, and in milion EUROs what is increase for 74 %. On September 30, 2006 the value of contracts was 180,3 milion EUROs; During 2005 sale of cars by leasing participated with 43%, machines and equipment with 43%, real estates with 13% and other 1%; In first nine months of 2006, sale of real estates by leasing participated with 38%, cars with 34%, equipment with 27% and other 1%. TitleBosnia and Hercegovina Market share in Hypo Leasing63% Raiffeisen Leasing 22% Volksbank Leasing 13% LB Leasing (CBS) 1% HVB Leasing- Euroleasing1% Other- Contract value in in mil. EUROs 185 Leasing u BiH

Insurance as a part of the whole financial system has important share on BH financial market; 31 insurance companies operate on BH territory. In coming period enlargement of insurance companies and decrease of their number may be expected what shall cause the concentration of capital in sector of insurance and work efficiency; Insurance premium in 2005 in BH achieved the amount of 357 milion KM. Insurance companies

Insurance companies in Brcko DC JAHORINA INSURANCE DRINA INSURANCE BOSNA INSURANCE BOSNIAN – GERMAN BDV INSURANCE CROATIA INSURANCE EURO-HERC INSURANCE TRIGLAV INSURANCE LIDO INSURANCE SUNCE INSURANCE BRCKO GAS INSURANCE NEŠKOVIC INSURANCE BOBAR INSURANCE ZOIL INSURANCE RAIFEIZEN INSURANCE KRAJINA KOPAONIK INSURANCE PSC-BABIC INSURANCE VGT INSURANCE ZOVKO INSURANCE

Make the market of capital attractive to foreign investors Promotion of other capital market instruments: corporative bonds, entities’ bonds, treasury notes, certificates of deposit, bonds of lower authorities…. Market participants: Commissions for securities, stock exchanges (Sarajevo and Banja Luka), Register of securities, brokerage houses and commercial banks. Start with emission of bonds by the state. At the first moment issue high quality of securities which will improve market credibility; SEM - The Stock Exchange Monitor is information platform of South-East Europe stock exchange. There are 8 stock exchanges participating at this moment, which markets involve more then securities from 170 brokerage houses. Market of capital

12 Total turnover on stock exchange in BH in the first months of 2006 was ,89 € Sarajevo stock exchange Banja Luka stock exchange ,48 € ,41 € Stock exchange in BH

Globalization process also influences financial sector, so there are in this segment trends of introduction of new financial businesses which are present on international market, such as factoring businesses, futures, insurance of export businesses and guarantee funds, day-to-day transactions and other; The significant value of businesses on financial market may be achieved through mentioned financial businesses than in this segment should be emphasized importance of regulations and their adjustment with international standards. New financial businesses

Investment Guarantee Agency Investment Guarantee Agency (IGA) is state agency for support of export which carry out its activities independently, on commercial basis. IGA operates on whole BH territory. One of service is for instance insurance from political and war risk for entities out of BH which gives the credit to companies in BH for purposes of production. MIGA-Multilateral Investment Garantee Agency, has been established by World Bank Group (insurance from war, expropriation, political, political disturbance, restriction of exchange rate, cancellation of contracts) Investment Guarantee Trust Fund for Bosnia and Herzegovina, European Union-MIGA (example of Coca-Cola investment insurance in BH on amount of 23.3mil$)

BD Guarantee Fund Beginning of 2003 with KM In KM Through the Brcko District BH Guarantee Fund (GFBD) in 2006 was issued 75 guarantees in amount of , 50 KM, what provided the access for small and middle companies and individual farmers to favorable credit resources in amount of ,00 KM.

The Fund goals Providing of credit guarantees for owners of business activities who are not able to offer an adequate collateral to financial institutions. Attracting of new resources into the Fund by which the competitiveness in the Brcko District BH financial sector is to be improved regarding the crediting of business activities of small and middle companies and rural sector. Lending technical assistance to the Brcko District Government and other institutions responsible for implementation of development plans and programs for economic development.

CRITERIA FOR APPROVAL OF GUARANTEES Guarantee is being approved mostly for activities within the sector of SME and for enterprises dealing with agriculture Client has to meet all conditions to get the credit from partner financial institutions. Guarantees are being approved only for activities on Brcko District BH area Maximum guarantee on 50,000KM (50%), term of payment 60 months

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