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Microfinance institution NOA becomes first borrower under Albania Agribusiness Support Facility

By Axel  Reiserer

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€5 million credit line for on-lending to local agribusinesses

The microfinance institution NOA sh.a. is the first borrower under the new Albania Agribusiness Support Facility with a €5 million credit line. The funding will allow NOA to support local agribusinesses with loans tailored to the needs of these companies.

The loan will be complemented by a technical cooperation package to provide support for capacity building, product development and marketing outreach. In addition, advisory services to sub-borrowers will be provided by EBRD’s Advice for Small Businesses (ASB)programme with the aim of facilitating access to know-how and non-financial-development services to farmers,  small and medium-sized enterprises (SMEs) in areas ranging from strategy, operations to quality management specific to the agribusiness sector.

NOA is a non-bank microfinance institution and has been incorporated as a joint stock company in Albania for more than 18 years. It has 22 branches in the country and provides traditional micro lending to clients mostly in rural areas. The EBRD and NOA have been partners since 2012.

Agribusiness is a vital sector of Albania’s economy. It provides employment for almost 50 per cent of the population in rural areas and accounts for around 20 per cent of the country’s GDP. However, the sector remains underserviced by financial institutions, with loans to agribusiness accounting for only 2 per cent of total lending to the economy.

Strengthening local enterprises is a key priority for the EBRD as it aims to support the countries where it invests to re-energise growth. Limited access to finance remains a key impediment for the development of a strong and flourishing private sector.

The new Albania Agribusiness Support Facility, launched by the EBRD and the government of Albania,is addressing this challenge by improving access to finance for local agribusinesses through dedicated credit lines or by sharing the risk of lending to the agribusiness sector. The government has made available up to €36 million to support the facility and the EBRD is providing up to €100 million in funding and risk-sharing facilities.

In addition to financing instruments, the framework also includes technical assistance to help financial institutions enhance their lending, as well as advisory services through the EBRD’s ASB programme that will help agribusiness SMEs to develop their performance in a wide range of areas and improve their bankability. The EBRD is also continuing to support the Albanian authorities with specific activities in favour of sectoral reform in coordination with other development partners.

Henry Russell, EBRD Director, Financial Institutions, Western Balkans, said: “We are very pleased to extend this loan to NOA, a local partner we know well and hold in high regard. The funding will benefit local agribusinesses and support their growth and development. It is thanks to institutions like NOA that we can significantly widen and deepen our outreach and this is key to further increasing the EBRD’s impact in Albania.”

Herjola Spahiu, CEO of NOA sh.a. stated: "The cooperation with the EBRD always provides tangible benefits for NOA as a partner as well as for our customers,not only in terms of funding, but also in know-how and expertise sharing through technical assistance and training programmes. The Albania Agribusiness Support Fund, supported by the EBRD and the Albanian government, introduces a new product with attractive interest rates. As the first company to join the framework NOA re-confirms its commitment to further contribute to the development of the agriculture sector, which is a strategic one for the Albanian economy.”

Since the start of its operations in Albania, the EBRD has invested more than €1billion in over 70 projects in the country. The Bank is active in all sectors of the economy with a special emphasis on infrastructure and energy, where demand and potential are high. The EBRD’s strategic priorities for 2016-18 in the countries where it invests are: re-energising growth, strengthening regional integration and addressing global challenges.

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