The Kosovo Credit Guarantee Fund (KCGF) and the Development Bank KfW have signed a landmark agreement to further strengthen financial cooperation aimed at supporting micro, small and medium-sized enterprises (MSMEs) in Kosovo.

The agreement, titled “EU-KfW Western Balkans Guarantee – Supporting Entrepreneurs’ and MSMEs’ Resilience”, is an integral part of ongoing efforts to enhance economic development, increase access to finance, and drive sustainable growth across the region. This initiative is co-funded by the European Union and the German government through the KfW Development Bank in a total amount of EUR 22,133,5 million.

During the signing ceremony, senior representatives from KCGF and KfW emphasized the critical role of this agreement in empowering Kosovo’s MSMEs, a key driver of employment and economic stability in the country. The new financial instruments supported through this cooperation will reduce lending risks for financial institutions, creating a favorable environment for MSMEs to thrive despite ongoing challenges.

“This agreement is a testimony of our strong partnership with KfW to deliver essential financial guarantees to our MSMEs,” said Mr. Berisha, Managing Director KCGF “This cooperation will enable local businesses to access the necessary capital, expand their operations, and contribute to the broader economic growth of Kosovo.”

At this event high representatives of the Government of the Republic of Kosovo were present, high representatives from the KfW – Development Bank and the European Union in Kosovo; Donors of FKGK, partner banks and numerous collaborators.

Hekuran Murati – Minister of Finance, Labor and Transfer – said:

“It is a pleasure to be part of this event, even more so when yesterday we had the first loan guaranteed by KCGF within the Diaspora Investment Window, this window which supports emigrants who want to return and invest in Kosovo, which is also a joint project of the Government with the KCGF.

Meanwhile, this morning we signed a grant agreement worth 12.6 million euros, agreement financed by the EU and managed by KfW for the advancement of infrastructure and waste management in three municipalities of Kosovo.

Within the all good works  with the EU and KfW, today we have gathered to attend the signing of another agreement,  Agreement “Guarantee for the support of entrepreneurs and the growth of micro, small and medium-sized enterprises” with special emphasis on the support of companies in Kosovo. Today’s agreement will enable the reduction of the cost of guaranteed loans, making it easier for financial institutions to issue loans and at the same time facilitate the access to finance for beneficiaries”.

Mr. Milot Cakaj – Deputy Governor at CBK – emphasized:

“The Central Bank of the Republic of Kosovo, through its prudent instruments, constantly ensures that financial institutions implement fair financing practices, in order to increase access to finance, including the most challenging and needy sectors. It is important to emphasize that the financial sector of Kosovo is among the most stable in the region, with the lowest level of non-performing loans and a level that is close to the European average. This indicator, jointly with other indicators that reflect our financial stability, shows that we have a stable market, which constantly receives support from international partners. This agreement is an additional confirmation that the financial sector continues to be a successful example, which through close international cooperation, has been opened new opportunities for investment and access to finance, thus contributing to the economic development of the country”.

Mr. Johannes Stenbaek Madsen, Head of the Cooperation Section of the EU in Kosovo,  said:

“The signing of this agreement is an important step in the ongoing partnership between Kosovo and its international allies. It helps Kosovo move toward sustainable development and becoming part of the global economy. This project is part of the European Union’s Western Balkans Guarantee Facility, which aims to boost the economy of the Western Balkans. It shows our commitment to helping businesses in Kosovo grow and create jobs, , ensuring stability in the region.”

Dr. Klaus Muller- KfW Development Bank Director Southeast Europe & Türkiye – KfW – said:

“I am glad that altogether, we can mark another cornerstone for KCGF and jointly sign the EU-KfW Western Balkans Guarantee – Supporting Entrepreneurs’ and MSMEs’ Resilience today. The German Government (BMZ) via KfW supported KCGF from very beginning by providing the capital for the special windows dedicated to support of the least reserved sectors as Agro-Window and Green Window. The overall German Contribution via KfW for KCGF is EUR 24.9 million with still ongoing technical support.The KCGF is a role model of the institution where the synergies of the government and donors worked in excellent harmony. This Fund is possible only because many have joined forces: The Government of Kosovo who contributed itself, USAID who put a lot of effort in getting all this started, KfW and SIDA who have pledged to also support this scheme”.

Mr. Berisha, Managing Director of KCGF – emphasized:

“This agreement is a proof of our strong partnership with the KfW Development Bank and international partners, to provide financial guarantees for our MSMEs”. This project aims to strengthen the entrepreneurship and sustainability of SMEs throughout the Western Balkans, with a total amount of 50 million euros dedicated to the entire region. Kosovo will benefit significantly from this initiative, receiving 22.1 million euros, or 45% of the total 50 million euros re-guarantee funds allocated to the region. While we celebrate this important moment by being honored as KCGF as one of the beneficiaries of this initiative, I would like to express our sincere gratitude’s to the main contributors – the European Union and the European Commission. But above all, I want to express our deepest gratitude to KfW – the German Development Bank, including our colleagues at the main office in Frankfurt and here in Pristina.”