December 8 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said that together with the government of Albania and the European Union it is committing up to 7.1 million euro ($8.0 million) of loans to Albanian agribusiness and tourism companies, risk-shared with its partner bank, OTP Bank Albania.
“The funds will be provided through the Albania Agribusiness and Tourism Support Facility (AATSF), a framework aimed at improving access to finance for small and medium-sized businesses,” EBRD said in a statement on Tuesday.
The facility also includes a 10% investment incentive for sub-borrowers in the agribusiness and tourism sectors, funded by the government of Albania and the EU, respectively. It will also benefit from a government-backed first-loss risk cover mechanism.
Up to 180 million euro has been allocated to date under the AATSF for specialised credit lines and risk-sharing facilities through local partner banks. Since its launch in 2016, more than 70 million euro in loans have been committed, benefiting more than 6,100 local agribusiness SMEs.
The AATSF complements the EU’s instrument for pre-accession assistance for rural development (IPARD), which has channelled financing to numerous beneficiaries through the AATSF.
Agribusiness is a vital sector of Albania’s economy, as it provides employment for more than 50% of the population in rural areas and accounts for some 20% of national gross domestic product (GDP), the statement adds. Still, the sector remains underserved by financial institutions.
Tourism has become a strategic sector for growth and employment and is a key factor in Albania’s sustainable long-term growth and competitiveness. However, the tourism sector is facing similar constraints in terms of access to finance, particularly in light of the Covid-19 pandemic and the deadly earthquake of 2019, according to the EBRD.
($=0.884 euro)