Germany is supporting Albania’s economic recovery from COVID-19 pandemic with a grant of EUR 6 million

On November 26, 2021, KfW’s Director for South-east Europe and Turkey Dr. Klaus Müller and the Executive Director of the Rural Credit Guarantee Foundation (RCGF), Mr. Bajram Korsita signed the financing agreement for a grant of EUR 6 million made available by the German Government, through the German development bank, KfW. Germany is committing these grants in in addition to the EUR 6.7 million already provided to RCGF in 2020 to help mitigate the effects of the COVID-19 pandemic.

With this grant funding, Germany is supporting the RCGF to expand its support to Albanian businesses recovering from the negative impact of the COVID-19 pandemic. Micro, small and medium enterprises (MSME) have been particularly affected by the restrictions enacted last year to stop the spread of the virus. The additional financing will help them to sustain jobs and to enable a rapid economic recovery. With the additional funds for 2021, RCGF will enhance its provision of guarantees and technical assistance in response to COVID-19 via a dedicated sub-window which will focus on supporting start- ups, defined as MSMEs that have been registered for less than 24 months, since this target group faces particular challenges to access financing. This “Start-up Window” will include grant-financed technical assistance (TA) for entrepreneurs and for partner financial institutions to unlock access to start-up financing.

The RCGF was established as a not-for-profit organization initially with an amount of EUR 5 million provided by the EU and implemented by KfW Development Bank, as well as a contribution by the Albanian Government. In 2018, the German Government added a grant of EUR 30 million, significantly increasing its guarantee capacities. Since its establishment, RCGF has guaranteed a total number of 8,300 loans amounting to EUR 48 million. These have contributed to the creation of around 5,500 news jobs while preserving around 8,850 existing workplaces.

RCGF’s mission is to promote access to finance by encouraging banks and non-bank financial institutions to provide financial services to MSMEs including particularly in rural areas and the agricultural sector. Currently, RCGF partners with 6 local banks as well as 6 non-bank financial institutions. KfW, in Albania, implements the German Financial Cooperation and provides grant aid and concessional loans for key investments and project-related consultancy services.

German development cooperation with Albania started in 1988. Since then, the German Government has committed more than one billion EUR to Albania. Currently, Germany is supporting Albania in the focus areas of “responsibility for our planet – climate and energy” and “training and sustainable growth for decent jobs”.