The EBRD is increasing the availability of financing in Albania with a €2 million medium-term credit line to Union Bank for on-lending to small and medium-sized enterprises (SMEs).
In the wake of the financial crisis and limited access to long-term financing, banks in Albania have reduced their lending activity, which has particularly affected the small and medium-sized businesses.
Established in 2005, Union Bank is a privately-owned universal bank, in which the EBRD holds a 12.5 per cent stake. Union Bank has a strong regional network, operating throughout Albania via 31 branches.
As part of its strategy, Union Bank aims to further expand its network and increase its lending activities with particular focus on the SME sector. The EBRD financing will help Union Bank develop its portfolio of SME loans and strengthen its funding base.
The proceeds of the EBRD credit line will be used to provide working capital and capital investment financing for small and medium-sized businesses in Albania.
“Supporting the real economy and strengthening the financial sector are among the EBRD’s core priorities in Albania and we are pleased to support Union Bank in its drive to expand activities throughout the country. This transaction will increase the competition in the banking sector in Albania, to the benefit of local businesses”, said Daniel Berg, Head of the EBRD Office in Albania.
“This credit line is important for Union Bank for many reasons. It marks another page in the fruitful relations between Union Bank and EBRD, demonstrating our mutual commitment to raise our standards. But, most important, we are pleased that the credit line will help in a small way to better meet the needs of our clients. While much of the banking world is retrenching lending activities, Union Bank is looking to use new resources to develop new lending opportunities." said Edmond Leka, Chairman of the Board of Directors of Union Bank.
Since the beginning of its operations in Albania the EBRD has committed €545 million in various projects in infrastructure, corporate, energy and financial sectors, which attracted additional investments of €945 million.