Having a place of their own was a dream for the Bibo family from Tirana. “We used to live with my parents, but when our baby was born, we really needed more space,” says Mirela Bibo. “Actually, we really needed a place of our own.”
IFC is supporting the fledgling mortgage market in Albania precisely to assist people like the Bibo family. In 2007, IFC provided the Banka Kombėtare Tregtare (BKT) with a 20 million euro loan to expand the bank’s housing finance operations. An IFC advisory services agreement complemented the loan and bolstered the firm’s expertise in mortgage finance.
“The investment, combined with IFC’s advisory services, is very valuable for our bank as well as for Albania, where the mortgage market is in its early stages of development” said Seyhan Pencapligil, CEO of BKT.
The overall mortgage market in Albania, around 500 million euro at the end of 2007, is modest. It is expected to grow by 10 % in 2008, with expansion fueled in part by IFC’s activities in the country. BKT is the second largest bank in Albania in terms of deposits, commanding a 15.3% of the market, and some 90% of BKT’s retail portfolio is concentrated in mortgage lending.
“We are pursuing additional agreements with other banks in the country,” said Rolf Behrndt, IFC Senior Operations Officer in charge of the Access to Finance program in southern Europe. “IFC is also helping Albania’s authorities improve the regulatory framework, enabling a better environment for housing finance operations,”
IFC is supporting Albania’s banks, because developing financial institutions with a full range of products is critical for the country’s economic growth. Currently, there are 17 private banks operating in Albania. By providing mortgage funding, IFC is not only making home purchasing more accessible, but also supporting growth in the construction industry and related sectors.
