Development Credit Authority – Loan Portfolio Guarantee Ministry of Agriculture, Forestry, and Rural Development

Speeches Shim

Development Credit Authority – Loan Portfolio Guarantee Ministry of Agriculture, Forestry, and Rural Development
Eurofruti, Mramor, a local fruit processing company, works with frozen berries. Increased funding opportunities give agribusinesses the financial flexibility to invest in new product lines.
USAID

KEY ACTIVITIES

On September 26, 2012, USAID and six local commercial banks, with funding from the Ministry of Agriculture, Forestry, and Rural Development (MAFRD), signed a DCA agreement. MAFRD contributed €2.5 million to subsidize the planned $26 million in loans to be generated through the DCA. This is the first time in USAID DCA history that a government counterpart completely covered the subsidy costs of a guarantee. This innovative model is now being replicated in other countries.  

The DCA guarantee gives banks an incentive to lend to farmers, who would otherwise find it difficult or impossible to obtain financing and demonstrate their potential profitability. Through the DCA, USAID is also assisting Kosovo’s financial sector to introduce new products tailored to meet the needs of businesses across agriculture value chains.

Targeted borrowers include private enterprises operating in Kosovo in horticulture, livestock, and cereal value chains.  The loans support targeted investments designed to encourage growth in agricultural business operations.

RESULTS to date

  • Six banks have disbursed $23 million in loans to the agriculture sector. 
  • Participating banks have made 913 loans with an average loan size of $25,256.
  • Loans, with terms ranging from 12 to 48 months, have been issued to various agribusinesses in the dairy, livestock, animal feed, fruit, and vegetable sub-sectors.

The Development Credit Authority (DCA) loan portfolio guarantee aims to increase access to credit for Kosovo’s agriculture sector by providing a 50 percent risk guarantee to loans issued by participating banks. The DCA guarantee gives banks the incentive to lend to farmers, who would otherwise find it difficult or impossible to obtain financing, in order to demonstrate their potential profitability. 

Through the DCA, USAID is also assisting Kosovo’s financial sector to introduce new products tailored to meet the needs of agricultural businesses throughout the agriculture value chains.

Project Duration:  September 2012 - September 2022

Partners:TEB Bank, Banka Ekonomike, Raiffeisen Bank, ProCredit Bank, BKT Bank and NLB Bank,
with funding from the Ministry of Agriculture, Forestry and Rural Development

Contact:Flora Arifi

Last updated: October 18, 2018

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