EBRD Continues to Support Albania's Agribusiness Program
Albania, December, 07 2016 -
The newly established Albania Agribusiness Support Facility is gathering momentum with the country’s largest microfinance institution Fondi BESA joining the framework, the European Bank for Reconstruction and Development (EBRD) said on Dec. 6.
Under the agreement signed in Tirana, Fondi BESA will receive a loan of up to €5 million ($5.35 million) for on-lending to eligible farmers and agribusinesses in Albania. The loan is complemented by a risk-mitigation scheme and technical cooperation assistance for capacity-building.
Agribusiness is a vital sector of Albania’s economy. It provides employment for more than 50% of the population in rural areas and accounts for around 20% of the country’s GDP. However, the sector remains underserviced by financial institutions, with loans to agribusiness accounting for only 2% of total lending to the economy.
The Albania Agribusiness Support Facility, launched by the EBRD and the government of Albania earlier in 2016, 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 EBRD said. The government has made available up to €36 million to support the facility and the EBRD is providing up to €100 million in funding and risk-sharing facilities.
Fondi BESA is a commercially oriented microfinance institution. With a network of 72 branches and offices, it is the largest microfinance institution in Albania. It provides traditional micro lending to individuals and small enterprises across the country and has been a business partner of the EBRD since 2010.
“We are very pleased to welcome such an important institution as Fondi BESA on the board of our new facility,” said Holger Muent, EBRD director, Western Balkans. “This will help to significantly increase the outreach of the framework in areas where financial support is needed most. With Fondi BESA we will reach farmers and agricultural producers where they are and this will further strengthen the impact we can make.”
In addition to instruments for financing, the framework includes technical assistance to help financial institutions enhance their lending. It also includes advisory services through the EBRD’s Advice for Small Businesses that will help agribusiness SMEs to develop their performance in a wide range of areas and improve their bankability. The EBRD said it is also continuing to support Albanian institutions with specific activities in favor of sectoral reform in coordination with other development partners.
“The cooperation with the EBRD always provides tangible benefits for us as a partner as well as for our customers, not only in terms of funding, but also in know-how and the sharing of expertise through technical assistance and training programs,” said Bajram Mucaj, executive director, Fondi BESA. “The Albania Agribusiness Support Facility, supported by the EBRD and the Albanian government, introduces a new product specific to agriculture. This new agreement will enable Fondi BESA to be more active in rural areas by increasing access to financial services for clients in the agricultural sector.”
Since the start of its operations in Albania, the bank has invested more than €1 billion in about 75 projects in the country, EBRD said. The bank is active in all sectors of the economy, with a special emphasis on infrastructure and energy, where demand and potential are high. According to the EBRD, its strategic priorities for 2016-18 in the countries where it invests are re-energizing growth, strengthening regional integration and addressing global challenges.