The EBRD and Albanian government have committed €136 million to the new Albania Agribusiness Support Facility, with €100 million coming from the EBRD.
The facility has also issued its first credit line, providing €5 million through Albanian microfinance institution NOA. The non-banking institution has 22 branches providing microloans to rural Albanians.
Five other financial institutions, Raiffeisen Bank of Albania, Intesa Sanpaolo Bank Albania, Société Générale Albania, ProCredit Bank Albania and Fondi Besa, have signed a memorandum of understanding to join in the programme.
Agribusinesses employ nearly 50 percent of the former Soviet bloc country’s rural population and account for 20 percent of its GDP. However, loans to agribusiness accounts for just 2 percent of all lending, in a sector that suffers from a lack of modern equipment, unclear property rights and inefficiently small plots of land, according to the US Department of Agriculture.
Calling the new facility “a new and unknown tool, at least in our region”, Albania’s prime minister Edi Rama said the country would switch from a subsidised and subsistence farming to an agriculture of investments and sustainable development.
As well as trying to expand the capacity of rural lending institutions, the new facility will advise rural borrowers.
The Albanian government’s decision to provided finance alongside the EBRD means Albania now joins the EBRD donor community, because the €36 million provided by the government will go towards first-risk loss cover.
Albania’s top agri exports include tomatoes, tobacco, sheepskin and cattle hides. Top imports include wheat, cigarettes and sunflower oil.