Financial services
The dominant role in the structure of the financial sector is played by banks (90% of the total assets of the financial system) through which most of the financial operations take place. Observed by the structure of bank balance sheets, the core activities of banks in Montenegro are: accepting deposits and granting loans, as well as providing various types of payment services, while investment banking activities or active investment in financial instruments are poorly represented.
The second most important are insurance companies, dominated by those dealing with non-life insurance. The rest of the financial sector consists of microcredit financial institutions, investment funds and leasing companies.
At the end of November 2024, Montenegro officially became part of the Single Euro Payments Area (SEPA). The main advantage of the SEPA payment system lies in the simplification of international transactions by applying unified standards and rules, and greater payment efficiency. Banks process transactions faster, reducing the waiting time for the execution of payments or transfers, while SEPA transaction fees are lower than those for international bank transfers, which are not part of the SEPA system.
The Montenegrin financial institutions will be able to join SEPA payment schemes as of April 2025, while the EPC (European Payments Council) will announce the operational starting date for the provision of services by Montenegrin payment service providers.
During 2024, the banking system was highly-liquid solvent and stable. All banking indicators in 2024 were improved in comparison to the previous year. In 2024, 11 banks operated in Montenegro.
The slight decline in the active interest rates has continued this year as well. The average weighted nominal interest rate of banks on total approved loans in December 2024 was 5.99%, which is 0.12 percents lower compared to December 2023, and 0.05 percents lower compared to the previous month.
The average weighted effective interest rate (AWEIR) amounted to 6.50% in December 2024, which is 0.09 percents lower compared to the same month of the previous year, and recorded a decline by 0.05 percents on a monthly basis.
The stability of the financial sector, and the positive growth trend of all key balance sheet positions, indicate that banks have significant potential for financing development projects in the business sector.
A positive business trend was also recorded by other financial institutions during 2024. The financial system includes eleven microcredit financial institutions, one leasing company, two factoring companies, and three debt purchase companies.
In 2024, 9 insurance companies operated on the Montenegrin insurance market, five of which deal with non-life insurance and four with life insurance. On December 31, 2024, foreign share capital accounted for 93.3% of the total share capital of insurance companies in Montenegro, while domestic capital accounted for 6.7%.
