Alter Modus was established as a non - governmental organisation in 1997 with the objective of providing assistance to the most vulnerable categories of population, for the purpose of fostering their economic independence and confidence, ultimately resulting in assuming proactive role in the society

Part of the staff (residents) employed in the international humanitarian organization “Danish Refugee Council” that was operating in Montenegro since 1993, wouldn’t accept the fact that the decrease in the interest and donors assistance of international institution means simultaneous decrease in needs of vulnerable categories of the society in Montenegro. Therefore they have established the Alter Modus aiming at generating greater contribution with its work.

Support to marginalized group

During its first years of business, Alter Modus was engaged in the implementation of a large number of programmes aimed at the improvement of the status of vulnerable and marginalized groups in Montenegro. Therefore, implemented were the programmes of commodity grant loans, intended to the most vulnerable ones among the refugees and internally displaced population, as well as to the persons with disabilities.

Established was a quite successful cooperation with the members of the Association of Paraplegics, visually impaired and blind people and people with hearing impairments, which has generated amazing results. The Alter Modus was the only representative of refugees and internally displaced persons in the most important international forums, being also the founder of a newspaper of this kind dedicated to this population in Montenegro, which was being published in period from 1998 to 2002.

The most important donors in this period were the following organizations: United Nation High Commissioner for Refugees (UNHCR), Danish Refugee Council (DRC) and its National Development Agency (DANIDA), Church World Service (CWS), American organization Mercy Corps and the U.S. Department of Agriculture (USDA), etc.

The Alter Modus was a member of the European Council on Refugees and Exiles (ECRE), International Council of Voluntary Agencies (ICVA), and it represented interests of refugees and internally displaced persons in the Partnership in Action (PARinAC) and in the work of the United Nations Pre - executive Commission (PreExCom).

Development of microfinance programmes and objectives

Development of the micro - financing programmes was a logical continuation of the economic agenda of Alter Modus, which were designed on a grant basis. Micro – crediting has been fully affirmed globally as an efficient and viable tool in supporting vulnerable and marginalized segments of population. In the light of the above, the micro – crediting programme implementation commenced in the fall 1999.

The objective of the micro – crediting programmes of Alter Modus is the provision of financial services in the form of microloans to small entrepreneurs in Montenegro, being confronted with the challenges in accessing the banks due to their risk exposure. Micro - crediting programme is providing financial support to entrepreneurs with pre - developed idea for the purpose of starting up or developing existing profit generating activity and thus improving its and their family living standard.

Loans are approved for all the activities, from the area of agriculture, husbandry, trade, services and production. Loans that we are offering are established in accordance with the legislation and the repayment schedule and the interest rate depend on the activity for which the loans is used and the loan period.

The Alter Modus started off its credit activity with the donor support of UNHCR, DRC, CWS, MC/USDA, British National Lottery through the partnership with the European branch of Mercy Corps (Scottish European Aid/NLCB), Caritas Luxemburg, etc. The first loans were offered to refugees from Croatia and Bosnia and Herzegovina. We have acknowledged that the domicile population is not in a better position, thus we have been equally offering our services to them as of 2001, in addition to internally displaced persons from Kosovo, representing most vulnerable category of population.

Financial sustainability and commercial loans

After initially using donations, the Alter Modus, after becoming financially sustainable, has commenced with the provision of commercial funds aimed at facilitating further growth and development. Every cent of generated profit was used for increasing the equity, which has additionally contributed to the growth and development of Alter Modus.

However, growth and development alone do not represent an efficient tool because they enable the provision of services to increasing number of clients under more favourable conditions. In this manner the improvement of living conditions and overall economic environment of Montenegro is being achieved.

The first commercial funds were provided by the Dutch Organization for International Aid (NOVIB) at the end of 2001. After that credit arrangement came one after another with other prestigious investors who supported programmes of microfinance such as the Dutch Triodos & Doen foundation, OIKO Credit, etc.

The most important moment in the development of Alter Modus was in 2004 when the European Bank for Reconstruction and Development (EBRD), after our constant insistence and its detailed analysis, made the precedent and approved the first loan to a non-governmental organization in the world.

For us this loan has marked a turning point, since also other multilateral financiers have start showing the interest for our work, as well as for the EBRD, which after approving the loan, has expanded its area of operations and has ultimately accepted the micro - crediting institutions as its equal partners.

In current work, Alter Modus has provided over 30 million euro in credit from commercial investors being as follows:German Development Bank (KfW), BlueOrchard, European Bank for Reconstruction and Development (EBRD), Triodos, Spanish Official Credit Institute and Agency for International Cooperation (ICO/AECI), European Fund for Southeast Europe (EFSE), Dutch investors and funds (Triple Jump, NOVIB, NOVIB-ASN, OIKO Credit) and Crnogorska komercijalna banka (CKB).

Alter Modus was operating as the non – governmental organisation up to the end of 2008. In early 2009, Alter Modus has established a new company having the status of legal entity – Micro - credit Financial Institution (MFI) Alter Modus DOO implementing the overall micro – crediting programme.

Evolution from NGO - regulatory compliance

Changes in the establishment were the result of amendments to the legal framework of Montenegro. Specifically, in late 2007 and in early 2008, two new laws entered into force - Law on Banks and the Law on Amendments to the Law on Non - Governmental Organizations. Both Laws, inter alia, required that the micro – crediting activities are implemented through a company having the status of legal entity.

During the years of operation, the total of 80.1 thousand of loans were invested worth EUR 148.7 million euro have been approved and the cooperation with 37.6 thousand clients has been established. Active portfolio of Alter Modus amounts at EUR 18.6 million, representing the cash – in hand of 12.9 thousand clients