USAID developed a loan portfolio guarantee to increase access to finance for Kosovo’s micro, small, and medium enterprises in agricultural value chains, as well as business startups in all sectors.  These guarantees give banks the incentive to lend to business startups and agribusinesses, especially young entrepreneurs and farmers, who would otherwise find it difficult or impossible to obtain financing, in order to demonstrate the potential profitability in these sectors.  USAID is also working to assist Kosovo’s financial sector to introduce new products tailored to meet the specific needs of start-ups and agricultural businesses.

The Development Credit Authority (DCA) increases access to credit for the agricultural sector and business startups by providing a 50% risk guarantee on loans extended by three banks: 1) TEB Bank, 2) Raiffeisen Bank, and 3) Banka Ekonomike. 

The DCA agreements are structured as follows:

• TEB Bank is provided a 50% guarantee when extending loans to the agriculture sector in Kosovo.  The DCA covers 50% of losses incurred on a portfolio of loans up to $2,500,000.  Individual loans under the guarantee are limited to $300,000.
• Raiffeisen Bank (RBKO) and Banka Ekonomike (BE) are provided a ‘shared’ DCA guarantee on loans extended to business start-ups registered less than 24 months.  The DCA covers 50% of losses incurred on a combined portfolio of up to $2,075,240. Individual loans posted under the guarantee may not exceed $75,000.

Results to date:

• DCA for agriculture with TEB Bank led to 563 loans with an average loan size of $ 5,000.
• DCA for agriculture with TEB Bank fully utilized $2.5 million TEB Bank launched Kosovo’s first agro credit card in February 2014 to assist farmers with cash flow going into growing season. The card had 1,000 users in its first five months.

Partners: TEB Bank, Banka Ekonomike, and Raiffeisen Bank.

Geographic Target: Kosovo

Project Duration: September 2011- September 2018

Contact: Besa Ilazi