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GAFSP Boosts Lending to Kosovo Farmers

Challenge

In Kosovo, access to finance for farmers and small and micro enterprises in the country’s agricultural sector is limited as financial institutions increasingly move out of the small and micro loan segment. Fifteen of the country’s seventeen microfinance institutions (MFIs) operate under NGO status and are not permitted to convert into companies. This inhibits growth as MFIs are not sufficiently capitalized, with low appetite from lenders to fund NGOs.

Solution

Agency for Finance in Kosovo (AFK) is the country’s fourth largest MFI, with a market share of 17 percent by loan portfolio and providing financial services to micro and small enterprises (MSEs) in Kosovo. It operates under NGO status and serves customers in urban and rural areas.

IFC and GAFSP will provide a blended finance package of €1 million to AFK to spur lending to farmers in Kosovo and to support the development of the country’s agriculture sector.

IFC will advise AFK as it develops strategies and lending tools that will allow it to extend financing to more agricultural firms. IFC will also support AFK as it rolls out training sessions to help farmers better understand financial instruments and better present their business plans to creditors. Those efforts are considered key in Kosovo, where farmers are a key part of the economy but often struggled to access the financing they need to expand their businesses.
 

Country

Kosovo

Funding

Private

Focus area

  • Access to Finance
  • Fragility

Supervising entity

IFC

Results

Approximately 60 percent of Kosovo’s poor live in rural areas and depend on the agriculture sector for living. The joint IFC/GAFSP investment in KEP Trust will enhance the ability of MFIs to increase access to finance for farmers and micro agri-processing companies across Kosovo, resulting in improved livelihoods and food security.

Contact

Mr. Niraj Shah
Head, GAFSP Private Sector Window 
nshah1@ifc.org
Washington, DC 
Tel: 202 473 3743

Photo: Simone D. McCourtie / World Bank

Work with Us

Launched in 2010, the Global Agriculture & Food Security Program (GAFSP) represents a transformative approach to development aid that pools donor funds to make lasting improvements by supporting technically sound, country-led plans and sustainable, inclusive small- and medium-sized enterprises. The inaugural donors—Bill & Melinda Gates Foundation, Canada, the Republic of Korea, Spain, and the United States—were soon joined by Australia, Germany, Ireland, Japan, the Netherlands, and the United Kingdom. GAFSP’s donors work in partnership with recipients, civil society organizations, and other stakeholders to improve the lives of smallholder farmers and their families. Millions of poor and vulnerable people around the world will directly benefit from GAFSP’s continued commitment and support. GAFSP looks to engage other donors and stakeholders in this important initiative.

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