Financial Sector Assessment Program : Montenegro Finance for Growth

This technical note reviews with the status access to finance for enterprises in Montenegro, identifies key bottlenecks, and provides recommendations on how to address main challenges. In particular, the note focuses on SME finance by assessing (i)...

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Bibliographic Details
Main Authors:	World Bank, International Monetary Fund
Format:	Report
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	BUSINESS OWNERS LINE OF CREDIT FINANCIAL SERVICES CAPITAL MARKETS DEPOSIT LINES OF CREDIT BORROWER ECONOMIC GROWTH PROFIT MARGINS REPAYMENT CAPACITY BUSINESS OPPORTUNITIES DEPOSITS SMALL BANKS FINANCING FINANCIAL SECTOR REGULATION LOAN-TO-DEPOSIT RATIO INTEREST FINANCIAL LITERACY GUARANTEES FINANCIAL DISTRESS LOAN PROVISIONING INTEREST RATE CREDIT CRUNCH INCOME GROUP ENTREPRENEURS FINANCIAL REGULATORS MORTGAGE CAPITAL ADEQUACY TAX BURDEN LOAN SOURCES OF FINANCE CREDITWORTHINESS BORROWERS CORRUPTION BANKRUPTCY LOAN CONTRACT CREDITORS CREDITOR MFIS INFORMATION ASYMMETRIES ALTERNATIVE FINANCING FINANCIAL ACCESS INDICATORS NEW BUSINESS MICROFINANCE INSTITUTIONS CREDIT UNDERWRITING INTERNAL FINANCING FUNDING SOURCES BANK LENDING PUBLIC CREDIT EXTERNAL FINANCE COST PRESSURES ACCESS TO FINANCIAL SERVICES BIASES ECONOMIC ACTIVITY INTERNATIONAL FINANCE CREDITS SAVINGS MORTGAGES TECHNICAL ASSISTANCE INDEBTEDNESS CREDIT UNIONS FINANCIAL INSTITUTION INFORMAL ECONOMY PARTIAL CREDIT CONSUMER CREDIT LOAN PRODUCTS ACCESS TO FINANCING UNION DEBTS OPERATIONAL COSTS FINANCES FIXED COSTS INTEREST RATES CORPORATE FINANCE CREDIT RISKS PAYMENT FINANCIAL INSTITUTIONS DEBT FINANCIAL PRODUCTS LOANS INVESTMENT OPPORTUNITIES BUSINESS ENTRY ENTERPRISES PERSONAL BANKRUPTCY LOAN CATEGORIES BANK CREDIT FINANCIAL SYSTEM REAL ESTATE CONSUMER LENDING DEBIT CARDS BANK FINANCING FINANCE LOAN TERMS LONG-TERM FUNDING SAVINGS ACCOUNT INFORMATION ASYMMETRY BANKS ENTREPRENEURIAL ACTIVITY INSTITUTIONAL REFORMS UNIONS UNEMPLOYMENT MICRO-CREDIT COLLATERAL REQUIREMENTS POINT OF SALE GRANT EQUITY AFFORDABILITY CAPITAL OPERATING COSTS DIRECT LOANS FINANCE ACCESS CREDIT PROVIDERS CREDIT ACCESS ACCESS TO FINANCE BUSINESS DEVELOPMENT CONVENTIONAL BANK LOANS CONVENTIONAL BANK FOREIGN DIRECT INVESTMENT BANK CREDIT BOND MARKET KEY CHALLENGE HOUSEHOLD REPAYMENT CREDIT INFORMATION ENTERPRISE PROPERTY LOAN PORTFOLIO FINANCIAL SERVICE PROVIDERS CREDIT REPORTING INSTITUTIONAL CAPACITY BALANCE SHEET FINANCIAL ACCESS TRANSACTION COSTS CREDIT GUARANTEE FINANCIAL SERVICE DIVERSIFICATION MICROCREDIT FINANCIAL INFRASTRUCTURE PROFITABILITY CREDIT RISK ACCESS TO CREDIT OVERHEAD COSTS MICROFINANCE GOVERNMENT POLICIES ECONOMIC DEVELOPMENT FINANCIAL SECTOR ASSESSMENT PROVIDERS OF CREDIT FIXED ASSETS SECURITY BANK LOANS ECONOMIES OF SCALE INVESTMENT CREDIT GUARANTEES FINANCIAL INTERMEDIATION FINANCIAL INTERMEDIARIES COMMERCIAL BANKS HOUSEHOLDS COLLATERAL ACCESS INDICATORS FINANCIAL INTERMEDIARY INVESTMENTS GREATER ACCESS FINANCIAL SUPPORT RISK MANAGEMENT IDS BANKING SUPERVISION REMITTANCES OVERHEAD COST LABOR MARKETS BANK BRANCHES LENDING CONDITIONS CREDIT HISTORY CREDIT INSTITUTIONS GUARANTEE ECONOMIC AGENTS CONSUMER PROTECTION CREDIT REGISTRY BUSINESS FINANCES MFI EMPLOYEES
Online Access:	http://documents.worldbank.org/curated/en/2016/04/26187426/montenegro-finance-growth-technical-note http://hdl.handle.net/10986/24127

Description
Summary:	This technical note reviews with the status access to finance for enterprises in Montenegro, identifies key bottlenecks, and provides recommendations on how to address main challenges. In particular, the note focuses on SME finance by assessing (i) bank SME lending, and (ii) current constraints facing further development and deepening of the non-bank credit sector. The note develops key findings presented to the authorities during the FSAP mission and summarized in the aide-mémoire. The Montenegrin financial sector has yet to recover from the collapse of the real estate bubble in 2008. The crisis has exposed important weaknesses in the financial sector’s governance, oversight and infrastructure which had fueled years of unsustainable credit growth leading up to the crisis. The resulting balance sheet deleveraging and restructuring process has reduced the banking sectors’ ability to finance the corporate sector, which continues to suffer from slow economic growth and remaining weaknesses in the business environment.

Financial Sector Assessment Program : Montenegro Finance for Growth

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