Sustainable Agriculture gains traction in the Western Balkans
Sustainable Agriculture gains traction in the Western Balkans
Agriculture in Bosnia and Herzegovina accounts for approximately 5%* of the country’s GDP and around 18% of its employment**. But the sector is dominated by small farms with limited efficiency and innovation, lagging productivity and rural outmigration.
Farming in the region is also extremely vulnerable to climate change. Intensified droughts and floods are likely to significantly reduce crop yields and livestock productivity, making farms less profitable.
It is critical that farmers transition to sustainable agriculture, but they need the capital and the right advice to do so.
Addressing this issue, we invested €16m with Mikrofin, EFSE’s trusted partner of 20 years. Combining financing with tailored Advisory & Capacity Building, we are empowering the MFI to assist local farmers in adopting more sustainable, climate-smart and resilient practices.
*Source: World Bank (2023)
**Source: International Labor Organization (2023)
Impact Spotlight
Filip Ilić owns a large vegetable farm in Petrovo Selo, within the Municipality of Gradiška, a Northern region known for its fertile soils. He cultivates vegetables, including bell peppers and onions, in both open fields and approximately 80 greenhouses, and sells his produce to regional markets and food retailers.
The effects of climate change have inpacted the farm in recent years, including rising temperatures, and more irregular and intensified rainfall. This has stunted crop growth, decreased yields and damaged aging farming infrastructure.
With his loan from Mikrofin, made possible by EFSE’s investment, Filip upgraded his greenhouses, replacing old, single-layer plastic covers with high-quality materials to improve insulation and structural durability. This enhanced resilience against adverse weather conditions, increasing production and extending crop cycles for greater profits.
He also implemented new, smart technologies to monitor key environmental factors - like temperature and humidity - in the greenhouses. This increased crop yields and reduced resource waste.
In the coming years, Filip plans to increase sustainable production and establish modern storage facilities to better store produce and improve sales further.
Thanks to EFSE and Mikrofin, I was able to deepen my knowledge of sustainable agricultural practices and how climate change impacts my farm. I used the loan to purchase a multi-layered polycarbonate greenhouse cover, which offers better insulation and longer durability. This investment allows for more efficient crop protection and reduces the need for irrigation water. It’s not just about growing more—it's about growing smarter.
Filip Ilić, Petrovo Selo
Our investment
Mikrofin is the largest MFI in Bosnia and Herzegovina, with over 100 branches across the country. Our €16m investment strengthens its outreach to rural and agricultural clients.
We allocated 30% of this funding to farmers and micro and small agricultural businesses implementing sustainable agriculture measures, in line with EFSE’s eligibility criteria. We empower them to adopt modern, sustainable practices and technologies to protect soils, reduce water use, limit and reuse agricultural waste, and improve efficiency.
These investments will help farmers adapt to the effects of climate change, reduce costs, and enhance long-term resilience and productivity. Farmers will also meet regulatory and international standards, and improve product quality, competitiveness and exports.
This partnership is part of EFSE’s broader sustainable agriculture strategy in the Western Balkans. By providing targeted financing, we are supporting the region to take full advantage of its abundant natural resources and fertile soils, while maintaining the health of these environmental assets for generations to come.
Support beyond the investment
Financing alone is not enough - we need to actively build local skills and capacities. To that end, our Advisory and Capacity Building team worked with more than 200 farmers through our new Academy for Sustainable Agriculture, which provides training on practical topics, including soil protection, irrigation and climate adaptation. This will ensure they can use the capital provided by Mikrofin to make their farms sustainable, resilient and productive.
We also provided extensive, hands-on training to Mikrofin's staff, which they can pass onto end-borrowers. Subjects included how to reduce dependence on synthetic fertilizers and pesticides, and how to minimize waste and increase profits. We also worked with Mikrofin to strengthen agricultural loan products to help farmers make more effective sustainable investments.
Impact of our investment
Our sustainable agriculture investment builds on our successful and long-term partnership with Mikrofin. Since 2005, we have facilitated EUR 118 million to Mikrofin, supporting over 39,500 sub-loans and 47,200 jobs locally.