Pristina, Kosovo, December 17, 2021—Microenterprises, agribusinesses, and smallholder farmers, including women-owned companies in Kosovo, will have improved access to finance with a timely IFC investment in three microfinance institutions (MFIs). This will help boost competitiveness in the agri-finance space, creating jobs, improving livelihoods, and increasing food security in the country.
Photo credit: KRK
IFC, along with the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), is providing loans of up to €8 million to KEP Trust (KEP), Kreditimi Rural i Kosoves (KRK), and the Agency for Finance in Kosovo (AFK). Addressing the financing gap faced by small agribusinesses and farmers, the proceeds of the loan will be used for on-lending to individual entrepreneurs and microbusinesses in Kosovo with at least 50 percent earmarked for agribusinesses.
Over 60 percent of Kosovo's citizens live in rural areas and depend on agriculture for their livelihood. Agriculture is one of the key contributors to Kosovo's economy, accounting for nearly 8 percent of gross domestic product (GDP), 18 percent of exports, and around 30 percent of employment. Yet, the sector is underserved by banks, hindering the growth of small businesses and farmers.
"The IFC loan will be on-lent to local micro, small and medium enterprises, particularly with the goal of funding investments which will increase local MSME competitiveness on domestic and regional markets," said Lulzim Sadrija, KRK's CEO.
"IFC`s and GAFSP's loan will significantly increase our lending capacity to our specific customer group in Kosovo", said Shpend Nura, KEP`s CEO, and added: "The development of agriculture is of great importance, thus a large part of our portfolio is dedicated to small and micro enterprises in agribusiness and farming".
The financing from IFC and GAFSP's Private Sector Window comprises long-term senior loans—€4 million to KEP, €3 million to KRK, and €1 million to AFK. As MFIs in Kosovo have limited access to funds, IFC's support is likely to inspire confidence among other lenders, especially private banks, prompting them to provide financing to the microfinance industry.
"With the on-going financial support from IFC, AFK has reached out to a larger number of financially excluded small farmers in Kosovo, by providing sustainable access to micro loans," said Vahdet Anadolli, AFK`s CEO.
"Amid the COVID-19 pandemic, one of IFC's strategic priorities in Kosovo is to help improve credit access for MSMEs, especially the most vulnerable and underserved segments, including women-owned companies and agribusinesses," said Ary Naïm, IFC's Regional Manager for Central and Southeast Europe.
All the three MFIs—providing funding to the agribusiness sector in Southeastern Europe—are long-standing partners of IFC and the Private Sector Window of GAFSP.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
About the GAFSP
The Global Agriculture and Food Security Program (GAFSP) is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The Private Sector Window, managed by IFC, and supported by the governments of Australia, Canada, Japan, the Netherlands, the United Kingdom and the United States, provides long- and short-term loans, credit guarantees, equity, and technical assistance to private sector companies and financial intermediaries. It links smallholder farmers to markets by improving their access to finance, technology, expertise, and inputs.
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About KEP TRUST
Founded in 1999, KEP is now the biggest MFI in the Kosovo market with a portfolio over €57 million, servicing 23,500 customers in the country from its head office in Pristina and a country-wide network of 31 branches. KEP's mission is to offer a wide range of micro loans, especially to people with limited access to the banking sector, including those in remote or rural areas, minorities, and women. KEP was founded by the International Catholic Migration Commission (ICMC) and Prizren Business Club in September 1999. For more information, visit http://www.keptrust.org/.
About KRK
KRK is one of the largest MFIs in the country with an active loan portfolio of around €44 million and a total network of 26 branches providing financial services to low-income clients, with a particular focus on micro, small and agricultural businesses in rural and urban areas. The MFI's priority focus is on agriculture with specific attention to financial, social and environmental sustainability. KRK was established in 2000 as an NGO credit fund licensed by the Central Bank of Kosovo. In January 2004, KRK was transformed into a Limited Liability Company and currently has the following ownership structure: EFSE (42.2%), FMO (29.3%), SIDI (17.4%), and Credit Cooperatif (11.2%). For more information, visit http://krk-ks.com/.
About AFK
AFK is the fourth largest MFI in the country with a loan portfolio of €40 million and serving 21,000 clients, with a strong agribusiness portfolio. AFK was established as an NGO in 1999 by Mercy Corps to provide financial services to MSEs in Kosovo. Mercy Corps is an NGO headquartered in the United States and works in over 40 countries facilitating disaster recovery, building up communities, and helping to alleviate poverty. For more information, visit http://afkonline.org/.
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