IFC lends €20 million to Mikrofin for women-led and green finance

The IFC extended a €20 million loan to Mikrofin, Bosnia and Herzegovina's largest microfinance institution, directing at least 50% to women-led micro and small enterprises and 25% to emissions-reduction projects. The structure demonstrates a replicable microfinance model for combining gender inclusion with green finance that Indian financial institutions can study.

The IFC's €20 million loan to Mikrofin d.o.o. Banja Luka earmarks a minimum 50% for women-owned micro and small enterprises and 25% for projects reducing greenhouse gas emissions and improving energy efficiency, with the remainder for underserved entrepreneurs in agriculture, trade, and services. As of 2023, domestic credit to the private sector was only 43.5% of GDP, far below the EU average of 77.6%, while MSEs account for 99% of businesses and nearly half of national employment.

Women entrepreneurs and micro and small enterprises across agriculture, trade, and services are the direct beneficiaries, alongside households adopting clean energy. Women face structural barriers including limited asset ownership, informal operations, and exclusion from formal banking. Bosnia and Herzegovina is the second-highest emitter in the Western Balkans at 22% of total emissions, so the green portion will fund rooftop solar, energy-efficient home improvements, and clean heating systems for households and businesses.

Mikrofin will expand its green lending portfolio and receive IFC Advisory Services technical assistance to strengthen its environmental and social management systems, aligning growth with responsible business standards. Lenders facing regulatory gaps, capacity deficits, and weak green-finance incentives should track how advisory support enables expansion. For Indian ESG professionals, the dual gender-inclusion and decarbonisation structure offers a transferable template for emerging-market microfinance.

Key figure — Loan allocation: 50% to women-led MSEs, 25% to emissions-reduction projects