Launched in 2022, the European Union-funded Western Balkans EDIF Guarantee for SME Resilience Initiative aims to bolster access to finance for small and medium enterprises (SMEs) in Kosovo, enhancing their capacity to navigate challenging economic conditions. This initiative, made possible by the EU’s financial backing, will provide affordable lending options, fostering business expansion, job creation, and overall economic growth within Kosovo.
Since its inception in 2013, the European Investment Fund (EIF), in collaboration with the European Commission, has facilitated a total of €3.5 billion in funding, benefiting over 67,000 companies and supporting approximately 900,000 jobs across the Western Balkans, including Kosovo. Additionally, the European Commission has allocated €600 million since 2006 through the Western Balkans Investment Framework (WBIF) to facilitate SME access to finance. These funds are expected to mobilize an additional €6 billion in investments, contributing significantly to Kosovo’s economic development.
The EIF, operating under the European Union’s Western Balkans Enterprise Development and Innovation Facility (WB EDIF), has established guarantee agreements with 11 banks and financial intermediaries in Kosovo. These agreements, part of the “Guarantee for SME Resilience” initiative, will enable local financial institutions to offer SME loans totaling well above €750 million. Further agreements are anticipated in the first half of 2024, amplifying the financial support available to Kosovo’s SMEs.
This injection of financial resources is designed to improve SMEs’ access to finance in Kosovo, enhancing their resilience amid economic challenges while fostering conditions for growth, employment, and innovation. The initiative is projected to facilitate over €750 million in concessional loans to around 13,000 small businesses in Kosovo, sustaining approximately 180,000 jobs.
The implementation of the WB EDIF Guarantee for SME Resilience sets the stage for additional guarantees as part of the Western Balkans Guarantee Facility, showcasing how these innovative financial instruments attract private investments to bolster Kosovo’s economic and investment landscape. EIF Chief Executive Marjut Falkstedt emphasizes that these funds will empower Kosovo’s small businesses, particularly those in underserved segments, to innovate and expand, driving integration within the EU economy and strengthening regional economies.
Commissioner for Neighbourhood and Enlargement Olivér Várhelyi highlights the partnership with EIF as part of the EU’s €30 billion Economic and Investment Plan for the Western Balkans, underscoring the importance of affordable finance for Kosovo’s micro, small, and medium-sized enterprises. These funds, totaling €60 million, are expected to leverage over €750 million in loans, contributing to Kosovo’s economic convergence with the EU and fostering job creation and entrepreneurship.