Press Releases: Microfinance institution Fondi BESA joins Albania Agribusiness Support Facility €5 million loan for on-lending to local farmers and agribusinesses
Microfinance institution Fondi BESA joins Albania Agribusiness Support Facility
€5 million loan for on-lending to local farmers and agribusinesses
The newly established Albania Agribusiness Support Facilityis gathering momentum with the country’s largest microfinance institution Fondi BESA joining the framework.
Under the agreement signed in Tirana today Fondi BESA will receive a loan of up to €5 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 per cent of the population in rural areas and accounts for around 20 per cent of the country’s GDP. However, the sector remains underserviced by financial institutions, with loans to agribusiness accounting for only 2 per cent 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 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 officesit is the largest microfinance institutionin Albania. It provides traditional micro lending to individuals and small enterprisesacross the country and has been a business partner of the EBRD since 2010.
Holger Muent, EBRD Director, Western Balkans, said: “We are very pleased to welcome such an important institution as Fondi BESA on the board of our new facility. 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.”
Bajram Mucaj, Executive Director, Fondi BESA,added: “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 programmes. The Albania Agribusiness Support Facility, supported by the EBRD and the Albanian government, introduces a new product specific toagriculture. 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. This agreement is the result of previous successful collaborations between Fondi BESA and the EBRD which have consolidated relations between our two institutions. We believe this new cooperation will have a great impact on the development of the agricultural sector in Albania.”
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’sAdvice for Small Businesses that willhelpagribusiness SMEs to develop their performance in a wide range of areas and improve their bankability. The EBRD isalso continuing to support Albanian institutions with specific activities in favour of sectoral reform in coordination with other development partners.
Since the start of its operations in Albania, the EBRD has invested more than €1billion in about75 projects in the country. The Bank is active in all sectors of the economy, with a special emphasis on infrastructure and energy, where demand and potential are high. The EBRD’s strategic priorities for 2016-18 in the countries where it invests are re-energising growth, strengthening regional integration and addressing global challenges.