Since launching in 2017, USAID’s Diaspora Invest project has supported more than 200 diaspora start-ups and early-stage firms to establish and flourish in BiH. These companies have created over 2,800 jobs across 74 cities and towns in BiH, creating more opportunities for citizens to make a living and raise families here.
Despite more than half of its population currently living outside of the country, Bosnia and Herzegovina has maintained strong emotional and financial ties with its large diaspora. As part of its 30-year partnership supporting the people of Bosnia and Herzegovina, the United States government recognized these ties as an opportunity to harness the diaspora to be a part of their country’s development story from abroad.
In 2017, the U.S. Agency for International Development (USAID) launched the Diaspora Invest project to tap into the more than two-million person BiH diaspora as a source of knowledge, new technologies, business connections, and capital gained during their years living outside of BiH. Seven years since it launched, USAID has now supported more than 200 diaspora start-ups and early-stage firms to establish and flourish in BiH. These companies have created over 2,800 jobs across 74 cities and towns in BiH, creating more opportunities for citizens to make a living and raise families here in BiH. This approach has helped move the needle away from a country that depended on its diaspora sending nearly $2 billion in annual remittances to one that benefits from its diaspora investing in long-term economic development.
BiH’s long history of outmigration started with the draw of economic opportunity in pre-World War I Europe and beyond. The breakup of Yugoslavia in the 1990s saw an exodus of families fleeing violent conflict. And since the war, migration has steadily continued as people leave year after year in search of the stability and opportunity that continues to feel just out of grasp for many in their homeland. Today, BiH has the second-largest diaspora relative to population in the world.
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Diaspora Invest supports members of the BiH diaspora to launch or invest in innovative startups and scalable early-stage businesses. The project provides grants, technical assistance, and training, organizes business mentoring and networking, and works with policymakers to develop diaspora investment strategies. Recognizing challenges diaspora companies face in accessing loans and other forms of financing, USAID also works with financial institutions and commercial banks to create new financial products and loan guarantee programs tailored to diaspora investors and entrepreneurs.
Every dollar USAID has invested so far has leveraged $15 in private sector investment, resulting in $69 million in diaspora investments in BiH, with funds originating from 22 different countries across five continents. USAID-supported diaspora firms have sold more than $325 million USD worth of goods and services. Remarkably, three-quarters of their sales, approximately $233 million, have penetrated advanced export markets in the European Union and North America. Three loan guarantee agreements established by USAID between the Development Finance Corporation and local commercial banks has resulted in $33.5 million disbursed to 147 diaspora small businesses.
Diaspora Invest has helped people like Ana and Bojan, who returned from Switzerland to found a shoewear company in Žepče, buy new machinery that helped them increase production and exports to the EU. Samir, who lives between Austria and Mostar, also secured co-financing for equipment and computers for his semiconductor testing company. Metal processing firm MRD Inzenjering co-founder Radojko splits his time between Germany and Kotor Varos, a small town close to Banja Luka. A Diaspora Invest grant helped the company purchase modern, high-quality equipment and hire and train five new employees. The firm now employs 23 workers and exports most of its production to the EU.
Through these successes, USAID has learned that members of the diaspora are eager to specifically invest in their hometowns, which directs critical resources to help revitalize economies in underdeveloped communities. With this knowledge, USAID in 2022 partnered with 30 local governments across BiH to prioritize connecting diaspora investors directly with their local communities and empowering these local governments to make progress on community priorities.
Diaspora Invests’ engagement with the diaspora also goes beyond mere financial investment. Diaspora members have proven to be crucial resources for attracting foreign direct investment, promoting BiH products in export markets, transferring knowledge and skills to local companies, and driving social change within their communities. Integration into European and global markets requires a laser focus on quality, sustainability, social responsibility, and ethical governance issues. Diaspora companies, applying the knowledge and business practices they have learned abroad, have led the way in adopting these standards, setting an example for other local businesses to follow.
The U.S. government is inspired by the overwhelming enthusiasm the USAID Diaspora Invest project has received from both the diaspora and communities in BiH and is enthusiastically committed to continuing to build on the program’s many successes. Looking forward, USAID is focused on enlisting business experts from the diaspora to mentor BiH companies to help them adopt best business practices, make their products and services more competitive in lucrative new markets, and continually adapt to the modern global business world.
Through high-profile networking events in and outside of BiH and initiatives like the Diaspora Business Advisory Council, we are also promoting BiH as an attractive business destination to potential investors living all over the world. We are engaging a new generation of the diaspora through the WelcomeBack internship program, which each summer brings young professionals to work for BiH companies in their homeland.
e continue to generate financial support for diaspora-linked companies, through grants, innovative models for crowd funding and angel investing, and working to increase access to loans and other forms of financing that help new companies get off the ground. We are also working with the BiH Central Bank to fulfill conditions for the country to become a member of the Single Euro Payments Area (SEPA), which will make it easier and cheaper for members of the diaspora to invest capital in BiH by simplifying and reducing costs of cross-border payments in the EU and surrounding countries.
The story of the U.S. government’s support for over 30 years in facilitating the return and engagement of the Bosnian-Herzegovinian diaspora reflects our commitment to bringing Bosnians and Herzegovinians back to their homeland, making their country a prime destination for business, for living, or simply as a point of connection—a place they can always call home.