The FINANCIAL — The EBRD is extending a €5 million loan to Raiffeisen Leasing Kosovo (RLKO) to provide local micro, small and medium-sized enterprises (MSMEs) with access to an alternative form of finance still not widely used in the country.
The funding marks the EBRD’s first engagement with the leasing sector in Kosovo and the commencement of its cooperation with RLKO.
The leasing sector in Kosovo is in early stages of development and at the moment RLKO is the only financial institution to offer this instrument in the country. For local small businesses this means that there is room to explore an important source of funding, according to the EBRD.
Noel Edison, EBRD Director, Insurance and Financial Services, said: “We are very pleased to extend this loan to Raiffeisen Leasing Kosovo today. It is an important step which will allow us to address two important challenges at the same time: developing the leasing market in Kosovo and facilitating local small businesses’ access to finance.”
Gjon Gjonlleshaj, Executive Director at RLKO, added: “The start of our cooperation with the EBRD marks an important milestone in the development of our institution. By reaching out to private small businesses we are offering this vibrant segment of Kosovo’s economy means to finance their expansion and growth.”
Small businesses form the backbone of the economy of Kosovo; however, access to finance often remains a challenge in many cases owing to the lack of collateral. Leasing represents a viable and attractive alternative, but the market penetration remains at very low levels. Improving access to finance for Kosovo MSMEs through alternative credit channels is among the EBRD’s priorities for the country.
RLKO is fully owned by Raiffeisen Bank Kosovo, which in turn is a subsidiary of Raiffeisen Bank International, an international banking group with operations in many countries where the EBRD invests. RLKO operates as a non-bank financial institution and provides lease financing to micro, small and medium-sized enterprises and private individuals.
To date, the EBRD has invested more than €225 million in 51 projects in Kosovo. The Bank’s strategic priorities in the country are promoting inclusion, the green economy, economic resilience and regional integration. The majority of the EBRD’s investments are in the private sector.