Development Credit Authority – Loan Portfolio Guarantee Ministry of Agriculture, Forestry, and Rural Development

Development Credit Authority – Loan Portfolio Guarantee Ministry of Agriculture, Forestry, and Rural Development
Eurofruti, Mramor, a local fruit processing company, works with frozen berries. Increased funding opportunities give agribusinesses the financial flexibility to invest in new product lines.
USAID

The Development Credit Authority (DCA) loan portfolio guarantee aims to increase access to credit for Kosovo’s agriculture sector by providing a 50 percent risk guarantee to loans issued by participating banks. The DCA guarantee gives banks the incentive to lend to farmers, who would otherwise find it difficult or impossible to obtain financing, in order to demonstrate their potential profitability. 

Through the DCA, USAID is also assisting Kosovo’s financial sector to introduce new products tailored to meet the needs of agricultural businesses throughout the agriculture value chains.

On September 26, 2012 a DCA agreement was signed between USAID and six local commercial banks with the funding from the Ministry of Agriculture, Forestry, and Rural Development (MAFRD). MAFRD contributed a €2.5 Million subsidy towards the $26 million in loans planned to be generated through the DCA.

This is the first time in the history of USAID’s DCA that a government counterpart completely covered the subsidy costs of a guarantee – an innovative model that is now being replicated in other countries.  

The targeted borrowers are private enterprises operating in Kosovo throughout the value chains of the horticulture, livestock, and cereal sectors.  The loans go towards targeted investments designed to       encourage growth of the borrowers’ operations in the agricultural sector.

Results to date:

•   Six banks have disbursed $23 million in loans to the agriculture sector. 

•   The banks have made 913 loans with an average loan size of $25,256.

•   The loans have been issued to enterprises in various agribusiness sectors such as dairy, livestock, animal feed, fruits and vegetables and other related sub-sectors, with terms ranging from 12 to 48 months.         

Partners: TEB Bank, Banka Ekonomike, Raiffeisen Bank, ProCredit Bank, BKT Bank and NLB Bank, with funding from the Ministry of Agriculture, Forestry and Rural Development

Geographic Target: Kosovo

Project Duration: September 2012 - September 2022

USAID Contact: Flora Arifi