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Economic Growth

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Economic Growth
Kosovo wood products reaching EU markets.
Association of Wood Producers and Processors of Kosovo

USAID is promoting a structural shift in Kosovo’s economy from remittance-dependent consumption to production, jump-starting new export industries, reducing the trade deficit, building Kosovo’s brand as a source of quality goods, and investing in business-enabling reforms and assistance to facilitate this transition.  In spite of these advances, Kosovo still struggles with high levels of poverty, wide-spread unemployment, and an overdependence on imports. USAID is helping Kosovo address these issues by working on programs that promote economic diversification, increase access to credit and private sector contributions to growth, and improve the business-enabling environment.  

The Kosovo Credit Guarantee Fund (KCGF) -- launched with USAID assistance in 2016 with financial support from the Government of Kosovo -- is tackling a key constraint to economic growth in Kosovo: lack of access to credit for small and medium-sized enterprises (SMEs).  The KCGF stimulates lending by providing a partial loan guarantee to serve as a collateral substitute, allowing banks to reduce their risk and their collateral requirements.     

With USAID support, the Government of Kosovo is eliminating burdensome regulations and creating a more business-friendly environment, leading to Kosovo’s jump in the World Bank Doing Business rankings from 60th to 40th, and from 13th to 10th for Starting a Business in 2017.  USAID assistance has helped Kosovo strengthen government institutions, enhance fiscal transparency, and introduce key measures such as a legal framework for corporate insolvency.  These improvements are critical to driving private sector-led growth, fostering innovation, and mobilizing foreign and domestic investment.  

USAID’s direct support to the private sector has jump started key by helping companies expand production, connect to export markets, improve productivity, and build workforce skills.  In the agricultural sector, USAID’s market-driven approach invests in new technologies and higher value crops, focusing on introducing modern farming methods and increasing market reach and productivity.

Last updated: June 23, 2020

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