The Kosovo Credit Guarantee Fund (KCGF), today, signed a guarantee agreement with Raiffeisen Bank in Kosovo that will enable the bank to obtain additional collateral security for loans issued to micro, small, and medium enterprises (MSMEs) registered in Kosovo. The agreement should provide easier access to finance for Kosovar companies.
The agreement aims to increase lending for Kosovar businesses, contribute to the job creation, economic growth, as well as enhance opportunities for underserved economic sectors and populations including women, minorities, farmers, entrepreneurs, and youth.
Loans – for which guarantees will be provided – will be issued to meet the needs of the enterprises for working capital and implementation of investment plans/projects.
What is the procedure for businesses to benefit from it? Businesses will apply for a loan at a bank as usual, going through the bank’s procedures. If the value of the prospective borrower’s mortgage/collateral is not sufficient or other terms are not fully met, the bank may decide to qualify the business and issue the loan, using the KCGF guarantee. Businesses will not approach the KCGF to request the guarantee.
The signing ceremony took place at the KCGF offices located at Anton Cetta Str. 5A in Pristina.
About the KCGF
The Kosovo Credit Guarantee Fund (KCGF), is a local, independent, sustainable credit guarantee facility issuing portfolio loan guarantees to financial institutions to cover up to 50% of the risk for loans for micro, small, and medium enterprises (MSMEs). KCGF plays a key role in facilitating MSMEs prospects for obtaining more financing for their growth. By reducing the risk of lending to MSMEs, it will encourage KCGF partner financial institutions to lend to more firms, to increase the amounts of lending, to expand products and services available to MSMEs and improve the terms and conditions for lending. KCGF will help financial institutions lend to viable MSMEs that might not have quite qualified without the guarantee to receive a loan.
The KCGF was established in January 2016 under the Law on the Establishment of the Kosovo Credit Guarantee Fund. The establishing Law was initiated by the Ministry of Trade and Industry, and its development was supported by USAID Kosovo, through the EMPOWER Credit Support (ECS) Program.
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