In July 2017, a global benchmark was set by Opportunity Bank Serbia, after receiving RSD 615 million (approximately $6 million) in funding from the European Fund for Southeast Europe (EFSE). In a three-party agreement with the European Bank for Reconstruction and Development (EBRD), this was the first time that a Serbian bank received long-term funding in domestic currency from an international financial institution. International Finance asked Atul Tandon, CEO of Opportunity International, about the significance of this funding.

Vladimir Vukotic, CEO, Opportunity Bank Serbia

What is the significance of receiving long-term funding in domestic currency from an international financial institution (IFI)?

As you know, markets are always subject to volatility, which means that funding often varies when tied to foreign currency.

Receiving long-term funding in domestic currency unhinges the funding from this dependency and secures the amount that our operation will receive. The benefit of this security is that Opportunity Bank Serbia can forward-plan, based on a known value of commitment. It will allow our organisation to continue to grow, while preserving debt to deposit ratios at an acceptable level and enable us to operate with resiliency when faced with potential shocks and movements in the marketplace in future.

Today, 68% of OBS clients reside in villages and rural areas of Serbia. As a result, their preference is to receive loans in domestic currency, so as to avoid shifting exchange rates and uncertainty. By receiving our funding in domestically denominated notes, we can enable clients to take out longer-term loans sustainably. In fact, this domestic funding has enabled Opportunity Bank Serbia to increase the share of its dinar loan portfolio, which is now close to 50%.

Atul Tandon, WVUS Senior VP for Donor Engagement

Atul Tandon, CEO, Opportunity International

What are the other significant features of this funding?

Opportunity Bank Serbia focuses on providing micro, rural, agro, and micro and small enterprise (MSME) loans to those in Serbia whose access to financial services is difficult. For the past 15 months, Opportunity Bank Serbia has been leading this tripartite agreement between the European Fund for Southeast Europe (EFSA) and European Bank for Reconstruction and Development (EBRD).

It is a milestone for us, therefore, to have achieved such a partnership among three parties, and it is, in fact, the first deal of its kind in Serbia to date. This is perhaps the most significant feature of the funding, and we look forward to a continued relationship with the EFSE and EBRD in the future.

How does Opportunity Bank Serbia plan to use the RSD 615 million ($6 million) received from the EFSE?

Since Opportunity Bank Serbia was founded in 2002, we have disbursed over $500 million through 145,000 loans to micro entrepreneurs and small ruralfarmers, enabling them to pursue their entrepreneurial goals and better their living conditions.This long term funding in domestic currency will enable us to stay in line with our mission by making increased and longer term funding available for loans and reaching a larger potential client base. In addition, this allocation will allow us to give our clients greater access to financial services, technology and connections so that they can grow their businesses, their income and provide for their families.

OBS plans on better leveraging its network of 8 branches and 18 smaller outlets, which cover 80 percent of the country, to serve less populated areas and ensure strong relationships with its clients. We will increase our outreach to clients in rural areas across the country, and provide better access and customer service to those presently receiving financial services, such as loans.

At Opportunity Bank Serbia, what is the definition of poverty?

By adopting SPM (Social Performance Management) as one of our main goals back in 2013 under the guidance of Opportunity International, Opportunity Bank Serbia has developed very precise methodology for measuring share of poorer loan clients, based on the Statistical Office of the Republic of Serbia’s data. At Opportunity Bank Serbia, we focus on Very Poor, Poor and Low Income clients and our goal is to have at least 40% of our loan clients belonging to these three income-based categories. These individuals do not have access to financial products, especially to lending for their micro enterprises and for this reason they are unable to participate in the greater financial world – as they are excluded from the marketplace and unable to turn possibilities into long-term opportunities to better their lives.

Governed more broadly by Opportunity International (, our organisation seeks to eliminate extreme poverty in our lifetime and help people in Serbia work their way out of these conditions. While global poverty levels are decreasing outright, to the point where we are in striking distance of ending extreme poverty in our lifetimes, by 2030, they continue to affect 750 million poor and often, uneducated. At Opportunity Bank Serbia, we use the capabilities of a financial institution to gather deposits in more prominent and vibrant parts of Serbia such as the capital city of Belgrade and Vojvodina, while focusing the majority of our lending on micro and small sized enterprises (MSME) and farms from economically disadvantaged and depressed rural parts of Serbia.

We are in the business of creating opportunity – both for our clients to work their way out of poverty, but to also allow these clients to pursue the entrepreneurial dreams that have the power to reshape whole communities. We focus on building strong partnerships with our clients, donors, and partners, so that we can together facilitate sustainable development and truly make an indelible impact. Our microfinance loans unlock new possibilities for individuals and MSMEs alike that may have never seemed possible before – or even imaginable.

Poverty may mean different things to different people. Is it possible to set a benchmark across the globe?

As I mentioned, Opportunity is aligned with the goal of the World Bank and the United Nations to end all poverty by 2030. That means addressing those who do not have access to safe and reliable financial services by focusing on graduation programs for the ultra-poor to financing for small to medium enterprises and everyone in-between.

Our work is far from over, as alleviating poverty is more than just providing access to quality education, healthcare, electricity, and water. With the goal in mind to eradicate extreme poverty by 2030, we need to be able to help our present and future clients get out and stay out of poverty. Global issues such as economic shocks, and socioeconomic factors continue to create ramifications to economic stability in the emerging markets in which we operate, and it is for this reason that we are trying to provide tools to empower – rather than merely offering a ‘quick fix’.

While the exact monetary value deemed to be living in poverty may fluctuate across the globe, based on living conditions and availability of services, it is possible – and necessary – to set a benchmark so that as a global community, we can guide work towards achievable goals, and accountably measure success.