January 13, 2016

The European Bank for Reconstruction and Development (EBRD) is strengthening agricultural finance in Albania with the launch of a new credit framework, the Albania Agribusiness Support Facility. Under the new model, the EBRD will offer credit lines to Albanian banks and microfinanciers, and together with the Albanian government, will act as guarantors, mitigating the assumed risk of lending.

The creation of a fund of guarantee will be at the origin of a new process of financing for agriculture, by engaging second level banks,” Albania’s Minister of Agriculture, Rural Development and Water Resources, Edmond Panariti told the Independent Balkan News Agency. “This guarantee consists of a joint contribution between the government with 15 million euros and EBRD which attaches itself to this fund, by introducing a significant amount which is expected to speed up the crediting of agriculture by second level banks.”

The agricultural industry is key to Albania’s economy, accounting for 20% of the country’s gross domestic product (GDP), however, financing dedicated to agribusiness account for only 2% of the country’s total lending, according to the bank. The establishment of this new credit facility by the EBRD was launched to address this shortfall in financing, however, the bank’s plan also includes the ability for Albania’s farmers to access technical support, training, and assistance to increase capacity through its EBRD Small Business Support program.

“Albania has great potential in agribusiness. But fragmentation, informality and limited access to finance stand in the way of realising [sic] this potential, noted Christoph Denk, Head of the EBRD’s Albanian office, in a bank statement.

“We are pleased to launch, together with the EBRD, this programme [sic] supporting development of the agricultural sector. We believe that this is the right step towards achieving significant growth in lending to the agribusiness sector, which is crucial for its further development,” added Mr. Panariti.