Meeting of the Investment Council: Addressing Challenges to Improve MSMEs’ Access to Finance

The Investment Council (IC) held its third meeting of 2024 under the leadership of the Minister of Economy, Culture, and Innovation, Mr Blendi Gonxhja. The agenda focused on discussing the challenges Albanian enterprises face in accessing financing instruments. The meeting was attended by nearly all IC members, along with representatives from the National Agency for Information Society (AKSHI), National Cadastre Agency  (ASHK), and observers from the public and private sectors, as well as development agencies.

In his opening speech, Minister Gonxhja highlighted the essential role of micro, small, and medium-sized enterprises (MSMEs) in Albania’s economic growth, acknowledging various business issues, such as administrative burdens, bureaucratic procedures for accessing finance, and the need to improve financial literacy and digitalisation efforts. He highlighted current government initiatives to support MSMEs, such as grant programmes through AIDA, sovereign guarantee schemes, new legislation to improve access to basic payment accounts, and Albania’s participation in the SEPA (Single Euro Payments Area). On the other hand, Deputy Minister Sokol Duma outlined ongoing work to establish a credit bureau aimed at facilitating comprehensive risk assessments, generating credit scores, and enabling interest rates that reflect risk profiles.

In line with the meeting’s agenda, the Secretariat presented its analysis based on consultations with key financing sector actors (9 banks and 8 microfinance institutions) and a survey of 221 businesses. This analysis focused on factors influencing financing decisions, financial literacy levels, awareness of guarantee schemes, and the state of digitalisation in the banking sector.

Business representatives, including the Albanian Association of Banks, Women’s Economic Chamber, FIAA, AmCham, Albanian Tourism Association, Diaspora Business Chamber, the Union of Chambers of Commerce and Industry, Builders’ Association, Pro-Export Albania, and the Albanian Trade Union Association emphasised the need for tailored financing products such as for women and underserved sectors. They highlighted concerns about high interest rates and collateral requirements, the necessity of formalising sectors like tourism and agriculture, and better access to government digital services, through the e-Albania platform. Additionally, representatives noted the limited adoption of electronic payment systems, the need for broader acceptance of electronic documentation, the importance of considering consumer costs associated with credit bureau access, the need for stronger consumer protection, and enhanced support for underserved sectors through microfinance and shared-risk options.

Representatives from the development partners, including the EU, EBRD, and World Bank, emphasised the importance of access to finance for businesses and shared details of their specific programmes. They stressed the need for collaboration to improve financing knowledge, strengthen MSMEs’ capacities, and increase transparency in this area.  

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Full materials for this meeting will be published in the next few weeks in our dedicated section.