How microfinance can give businesses a new beginning

The conversation is moving from “Can I get a loan?” to “What can I achieve with it?”

For a small business, a good idea is often only the starting point. Investing in equipment, hiring someone, opening a new sales channel or adopting digital tools depends on a practical question: can it secure the capital it needs, when it needs it?

For larger companies, access to finance is usually part of long-term financial planning. For micro and small businesses, it can determine whether an idea stays on paper or becomes a working business, whether the company stagnates or grows, and whether it can create another job.

This is why the discussion about financial inclusion increasingly focuses on whether the financial system can provide suitable capital, in the right form and at the right time, for different kinds of entrepreneurs.

The issue is particularly relevant in the Western Balkans. Micro, small and medium-sized enterprises are an essential part of the economy, yet access to capital remains a significant obstacle to their development.

When a good idea needs capital

A start-up may have potential but only a short credit history. A woman entrepreneur may run a stable business yet face additional barriers to finance. A young entrepreneur may have an idea, knowledge and digital skills, but insufficient funds of their own to get started.

Financing small businesses therefore calls for an approach that considers their size, stage of development, actual needs and potential for growth.

The European Bank for Reconstruction and Development (EBRD) has been investing for years in improving access to finance for micro, small and medium-sized enterprises in the region, including through banks, leasing companies and non-bank microfinance institutions.

In 2025, the EBRD and the European Union supported a guarantee of up to €25 million for ProCredit Bank Skopje, intended to enable up to €50 million in new lending to micro, small and medium-sized enterprises in North Macedonia. The initiative targets underserved businesses, including those led by women and young entrepreneurs, as well as businesses in rural areas.

In 2026, the EBRD and the EU continued that support with a further €5 million in financing through ProCredit Bank Skopje for eligible micro, small and medium-sized enterprises led by women and young entrepreneurs.

These initiatives show why access to capital requires financing solutions that recognise the different needs of entrepreneurs. A single model cannot serve every business equally well.

Microfinance as a starting point

This is where microfinance and non-bank financial institutions can play an important role. Their value goes beyond providing an alternative to traditional bank finance. They can offer more flexible, personalised financing to customers whose needs do not fit easily into traditional lending procedures.

For a microbusiness, this might mean funding its first equipment purchase. For a self-employed person, it could mean expanding a service. For a small company, it might mean hiring someone, investing in technology or entering a new market.

This role is particularly relevant to women entrepreneurs. Suitable financial products and flexible lending models can make it easier for women to invest in their businesses, build sustainable companies and increase their capacity to grow.

Access to capital is one part of the process. What a business can do with it matters just as much.

From access to finance to financial capability

If the aim is to help small businesses grow, we need to consider both how much capital they can obtain and how effectively they can use it.

Financial inclusion is therefore increasingly linked to financial and digital literacy, education and the ability to make informed financial decisions. It does not end when a loan is approved. Its real impact becomes clear in what happens next.

Digitalisation is changing access to finance

Digital platforms can make loan applications, creditworthiness assessments, payments and financial management faster and more accessible. For small businesses, this can reduce administrative barriers and make it easier to fit financial services into everyday operations.

The broader question is how finance can help a small business become more competitive, more sustainable and better equipped to grow.

Rethinking the next generation of lending

These questions are becoming increasingly important for the financial sector in the Western Balkans. How can lending become more inclusive? How can technology improve access to finance? How can women and young entrepreneurs receive better support, and how can small businesses obtain the capital they need to grow as well as survive?

They will be central to MicroBalkans 26, the regional conference taking place in Skopje on 24 and 25 September under the theme “Lending Reimagined”.

The event will bring together non-bank lenders, fintech companies, financial institutions and other relevant organisations from across the region around one central question: how can we deliver capital more quickly, more effectively and more inclusively to those who can create value?

“Lending Reimagined” is therefore a question about the future of the region's financial sector, as well as the theme of the conference.

Explore the programme and register for MicroBalkans 26.