The International Finance Corporation (IFC) and Global Agriculture and Food Security Program (GAFSP) are lending 9 million euro ($9.9 million) to three microfinance institutions (MFIs) to increase access to finance for small agribusinesses and farmers in Kosovo.
“The loans to the Agency for Finance in Kosovo (AFK), KEP Trust (KEP), and Kreditimi Rural i Kosoves (KRK) are part of IFC’s and GAFSP’s broader strategy to support private sector development in Kosovo’s agricultural sector by increasing access to finance for micro and small enterprises,” IFC, part of the World Bank Group, said in a press release last week.
According to IFC, Kosovo’s agricultural sector is currently underserved by banks which is limiting growth of small businesses and farmers.
“Engaging three leading MFIs to achieve a systemic impact is key to the financial inclusion of small and micro enterprises in Kosovo,” IFC regional manager for central and southeastern Europe, Thomas Lubeck, said. “Helping finance these small businesses through microfinancing is one of the most direct ways for IFC to fight poverty and develop private enterprises, especially in the farming sector.”
The financing to the MFIs consists of 2 million euro to AFK, 4 million euro to KEP, and 3 million euro to KRK. Each loan is shared equally by IFC and GAFSP. Additionally, GAFSP is supporting an advisory services project to build agriculture lending in Kosovo.
GAFSP is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security.