The FINANCIAL — The EBRD and Albania’s largest microfinance institution Fondi BESA have strengthened their cooperation with the release of the second tranche of a €5 million loan under the Albania Agribusiness Support Facility.
The funds will be used for on-lending to eligible Albanian farmers and agribusinesses. The loan is complemented by a first loss cover provided by the government of Albania and technical assistance for capacity building, according to the EBRD.
Agribusiness is a vital sector of Albania’s economy. It provides employment for 50 per cent of the population and accounts for around 20 per cent of the country’s GDP. However, the sector remains underserviced by financial institutions, with loans to agribusiness accounting for only 3 per cent of total lending to the economy.
The Albania Agribusiness Support Facility is addressing this challenge by improving access to finance for local agribusinesses through dedicated credit lines or by sharing the risk of lending to the agribusiness sector. The facility is supported by a first loss cover provided by the government of Albania. Launched in 2016, the framework to date has attracted five partner financial institutions.
Fondi BESA is a commercially oriented microfinance institution. With a network of 78 branches and offices it is the largest microfinance institution in Albania. It provides traditional micro lending to individuals and small businesses across the country and has been supported by the EBRD since 2010.
Matteo Colangeli, Head of Albania, said: “We are very pleased with our cooperation with Fondi BESA, a leading microfinance institution with a wide and far reaching network in Albania. This also helps us to increase the outreach of the Albania Agribusiness Support Facility in areas where financial support is needed most. I believe 2018 will see an acceleration in the implementation of this initiative and a significant improvement in access to finance for Albanian agribusinesses.”
Bajram Muçaj, Executive Director of Fondi BESA, added: “We really appreciate that the EBRD has included a risk-sharing feature in this agreement. It is a very necessary and important tool for the successful implementation of the product in the sector.”
In addition to financing instruments, the framework also includes technical assistance to help financial institutions enhance their lending, as well as advisory services through the EBRD’s Advice for Small Businesses that will help agribusiness small and medium-sized enterprises (SMEs) to develop their performance in a wide range of areas and improve their bankability.
Since the start of its operations in Albania, the EBRD has invested about €1 billion in some 80 projects in the country. The Bank is active in all sectors of the economy with a special emphasis on infrastructure and SME development.