December 7 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) together with Albanian government have signed an agreement with microfinance company Fondi BESA to provide it with a 5 million euro ($5.36 million) loan, aiming to support the country's agribusiness sector.
"The loan has been provided through Albania Agribusiness Support Facility, launched by the EBRD and the government of Albania earlier in 2016," the bank said in a statement on Monday.
"This [the loan] will help to significantly increase the outreach of the framework in areas where financial support is needed most. With Fondi BESA we will reach farmers and agricultural producers where they are and this will further strengthen the impact we can make," Holger Muent, EBRD director for Western Balkans, said in the statement.
The loan is complemented by a risk-mitigation scheme and technical cooperation assistance for capacity-building.
In addition to instruments for financing, the framework includes technical assistance to help financial institutions enhance their lending as well as advisory services.
Albania Agribusiness Support Facility aims to improve access to finance for local agribusinesses through dedicated credit lines or by sharing the risk of lending to the agribusiness sector. The country's government has made available up to 36 million euro to support the facility and the EBRD is providing up to 100 million euro in funding and risk-sharing facilities.
Agribusiness is a vital sector of Albania’s economy. It provides employment for more than 50% of the population in rural areas and accounts for around 20% of the country’s GDP. However, the sector remains underserviced by financial institutions, with loans to agribusiness accounting for only 2% of total lending to the economy.
Fondi BESA has a network of 72 branches in the country and it is the largest microfinance institution in Albania.
($=0.9326 euro)