Bank in Montenegro received a loan of €10 million to distribute mortgages

Bank in Montenegro received a loan of €10 million to distribute mortgages

European Bank for Reconstruction and Development has provided Société Générale Banka Montenegro a loan of €10 million for issuance of long-term mortgages to individuals, according to ee24.com citing balkans.com.

Division of Société Générale in Montenegro is the third largest commercial bank in this Balkan country. СEO Branka Pavlovich says she's pleased to cooperate with the EBRD again. Other common projects have been implemented to support small and medium enterprises, and now the bank wants to support the ordinary citizens who wish to buy property in Montenegro.

Giulio Moreno, Head of the EBRD office in Podgorica, emphasizes that the project serves important purposes, helping to get mortgages for ordinary families, and at the same time contributing to the restoration of real estate and related industries.

Perhaps, after receiving such amount of money, Société Générale Banka Montenegro, will risk to provide loans not only for Montenegrins, but also for Russians. Note that at the moment Montenegrin Commercial Bank is the only bank that issues mortgages for Russians.

Opinion of ee24.com expert 

Anton Shamarin, managing partner of Value.One:

"Mortgage loans in Montenegro are extremely poorly developed and practically inaccessible to non-residents for two reasons. Firstly, the number of banks issuing mortgage to non-residents is limited. Specifically, only one bank provides loans for Russian citizens. It is Crnogorska Komercijalna Banka (CKB), which is a member of the OTP. Secondly, mortgage rates in Montenegro are quite high - 8.49% a year.

In late January, another bank that is part of the international banking group operating in Russia, Societe Generale, began providing home loans in Montenegro for residents, but it is hoped that the product line will be expanded to non-residents.

One of the most important of them is the activation in of activity of the largest international real estate developers such as Orascom Development with the project Lustica Bay; Azmont (a subsidiary of the State Oil Company of Azerbaijan) with the project of resort Portonovi; Quatari Diar (a subsidiary of Qatar Foundation) with the project of resort in Plavi Horizonti.

This burst of activity will lead to an influx of new proposals on the property market in Montenegro in next 2-5 years, and will help banks significantly expand the range of mortgage products and adapt them to non-residents.

A new Aliens Act, the adoption of which is expected in the near future, may become an additional stimulus to the development of the mortgage in Montenegro. One of its articles covers the providing a residence permit in Montenegro for foreign property buyers."