IFC’s Funding to Help Boost Microlending in Kosovo, Support Farmers and Women Entrepreneurs

​Pristina, Kosovo, June 29, 2023—Microenterprises, agribusinesses, and smallholder farmers, including women-owned businesses in rural and semi-urban areas across Kosovo, will gain improved access to finance. IFC and the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP) are investing in three of the leading microfinance institutions (MFIs) in Kosovo. The aim is to boost competitiveness in the agri-finance space, create jobs, improve livelihoods, and increase food security in the country.

The financing includes three senior loans of up to €9 million to KEP Trust (KEP), up to €8 million to Kreditimi Rural i Kosoves (KRK), and up to €6 million to Agjensioni për Financim në Kosovë (AFK), shared equally between IFC and the GAFSP.

Micro, small, and medium enterprises (MSMEs) account for 99 percent of the businesses in Kosovo, however, there is a notable financing gap to this segment (approximately 10 percent of GDP). The agriculture sector remains underdeveloped and dominated by small household farms and informal processing facilities. As of year-end 2022, agricultural loans represent just 2.1 percent of outstanding banking sector loans. This is more evident for women-owned small businesses, which are more constrained than male borrowers (49 percent vs 27 percent), with women's employment rate at only 14 percent (43 percent for men), among the lowest in Europe.

The proceeds of the loans will be used for on-lending to individual entrepreneurs and microbusinesses in Kosovo, with 50 percent earmarked for agribusinesses and at least 20 percent allocated for women-owned enterprises.

IFC will also support the three MFIs' efforts to streamline and grow their microlending portfolio through IFC's advisory services. Specifically, IFC will help build their capacity to improve procedures and processes for lending to farmers and firms in the agriculture sector through digitalization and climate smart agriculture technologies.

"One of IFC's key priorities in Kosovo is to improve access to credit for MSMEs, especially underserved segments such as farmers, rural companies, and women‐owned firms," said Alfonso Garcia Mora, Vice President for Europe, Latin America, and the Caribbean at IFC. "The microfinance sector has a strong role to play to help sustain economic growth and inclusion, unleash the entrepreneurial spirit of the population, and to create opportunities for all in the country."

All 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 2022, IFC committed a record $32.8 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 global compounding crises. For more information, visit www.ifc.org.

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About the Global Agriculture and Food Security Program

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, administered by the 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, capital 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.