Launch of the Kosovo Credit Guarantee Fund

Launch of the Kosovo Credit Guarantee Fund
Isa Mustafa, Prime Minister of the Republic of Kosovo
Xheraldina Cërnobregu

For Immediate Release

Tuesday, April 26, 2016
Xheraldina Cernobregu

Launch of the Kosovo Credit Guarantee Fund

Pristina, April 26, 2016 – The U.S. Agency for International Development launched the Kosovo Credit Guarantee Fund (KCGF) at a ceremony organized today. The event marks the establishment of an independent, local, and sustainable institution that will issue partial loan guarantees to financial institutions thereby increasing access to finance for the Micro, Small, and Medium Enterprises (MSMEs) in Kosovo and promoting private sector development.

“This Fund is an important opportunity to address one of the key constraints to sustained economic growth in Kosovo -- the lack of access to finance and credit for Kosovo’s businesses. The Fund will help small and medium enterprises obtain much-needed financing from financial institutions and most importantly, we expect the Fund will facilitate $400 million in increased lending and 20,000 new jobs in the next 6 years, “ said U.S. Ambassador Greg Delawie in his opening remarks joined by the Prime Minister of Kosovo Isa Mustafa, Assembly Speaker Kadri Veseli, German Ambassador to Kosovo Angelika Viets, and the Governor of the Central Bank of Kosovo Bedri Hamza.

Among the main obstacles to the development of MSMEs and job creation in Kosovo is inadequate access to finance for manufacturing companies, services providers, and agricultural businesses. In addition, many of these businesses, especially  women-owned, have limited or no property that may be used as collateral for obtaining loans.

The Kosovo Credit Guarantee Fund (KCGF) will provide banks and other financial institutions with partial loan guarantees to encourage increased lending to qualified borrowers. KCGF, established by Kosovo law in January 2016, will cover up to 50% of the risk of the loans.  KCGF guaranteed loans will help  farmers, entrepreneurs, women-owned businesses, and minority-businesses to expand, increase domestic production, create jobs, and improve the national trade balance.

The KCGF will be capitalized  with funding from USAID, and Kreditanstalt für Wiederaufbau – KfW (German Development Agency ) and the Government of Kosovo, through the sponsoring Ministry of Trade and Industry (MTI).

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The U.S. Agency for International Development is leading the U.S. government's efforts to end extreme poverty and promote resilient, democratic societies.