Boosting Kosovo Agriculture Sector through the Agriculture Finance and Insurance systems development
09.11.2021 Pristina
For the purposes of advancing the agricultural sector in Kosovo, the Kosovo Banking Association (KBA) has held a high-level meeting on the topic of the Agriculture Finance and Insurance systems. Participants to this meeting have discussed about the potential that the agricultural sector has to create jobs and generate income. This is due to the fact that Kosovo has abundant, productive land for products of different agricultural crops. The unsatisfactory level of household products and underdeveloped valued-added food processing are being considered as main challenges that this sector faces.
To address some of these challenges, IFC, a member of the World Bank Group, has presented the Kosovo Agriculture Finance and Insurance Project to boost the development of the country’s agriculture sector. IFC will deploy an integrated advisory project with the set of products, tools, advisory and expertise to enhance lending capacity of the financial institutions. The project will facilitate access to finance with 4 strategic pillars:
- Utilize value chain financing by identifying financial gaps, matching with Financial Institutions, and building partnership programs
- Leverage digital solutions to decrease cost of loan transactions to enable better and faster decision making
- Ensure sustainability by implementing climate smart agriculture practices, and
- Build a climate resilient agriculture sector using agri-insurance to increase lending by using instruments to mitigate external weather-related risks.
“Government programs and policies for farmers will continue by the Ministry. However, it is essential for farmers to have availability of finance alternative solutions, so they take advantage of business opportunities that will increase production, reduce climate risk, and increase profitability, said the Minister of Agriculture, Forestry, and Rural Development, Mr. Faton Peci during this event. One innovation already introduced by the Ministries program this year is the coverage of the insurance premium in the amount of 75 percent for 6 agricultural crops and we are planning to include new crops and insurance products in the years to come”, said among others Minister Peci.
Petrit Balija, Head of the Kosovo Banking Association, said “The banking sector in Kosovo has the liquidity needed to finance agribusiness sector and is ready to provide the necessary support for this sector to reach its performance and resilience. however, deep reforms are needed in order to reduce informality and increase its market competitiveness”
Given the importance of the Kosovo’s agribusiness sector in enhancing jobs and livelihoods of large segment of population and its exports potential, IFC aims to increase the access to finance for agribusiness – said Leah Soroka, IFC`s Europe and Central Asia Climate and Agricultural Financial Services Program Manager. There is a need to create systems that will leverage financing tools for farmers and increase confidence in agricultural lending. Thus, we will support the financial sector in boosting agriculture value chain investments and build resilience through digital and climate related financial services.
IFC’s Kosovo Agriculture Finance and Insurance Project, is funded by the Global Agriculture and Food Security Program that aims to increase access to finance for the agricultural sector in Kosovo.
About GAFSP
The Global Agriculture and Food Security Program (GAFSP) is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The Private Sector Window, managed by IFC, and supported by the governments of Australia, Canada, Japan, the Netherlands, the United Kingdom and the United States, provides long- and short-term loans, credit guarantees, equity, and technical assistance to private sector companies and financial intermediaries. It links smallholder farmers to markets by improving their access to finance, technology, expertise and inputs. https://www.gafspfund.org/ ?
