1. What is Kosovo Credit Guarantee Fund?
Kosovo Credit Guarantee Fund (KCGF) is an independent and self-sustainable institution that, shares the risk through credit guarantee with the Financial Institutions for micro, small and medium-sized enterprise loans (MSMEs).
2. What is the purpose of KCGF?
The purpose of KCGF is to support the private sector in Kosovo by expanding access to finance for MSMEs, thereby enabling job creation, increasing local production, improving the trade balance and enhancing opportunities for underserved economic sectors.
3. Who are the founders of Kosovo Credit Guarantee Fund?
The Government of Kosovo through the Ministry of Trade and Industry, the US Agency for International Development (USAID) and the German Development Bank KfW are founders of KCGF. These institutions are also donors of KCGF’s initial capital.
4. Who are other collaborator’s of Kosovo Credit Guarantee Fund?
• Swedish International Development Cooperation Agency – SIDA (as a counter guarantor);
• EUROPEAN INVESTMENT FUND – EIF (as a counter guarantor), and
• Millennium Foundation Kosovo-MFK (technical assistance for the development of renewable energy products and project finance)
5. Who are Financial Partner Institutions of Kosovo Credit Guarantee Fund?
Financial Partner Institutions of Kosovo Credit Guarantee Fund are: Banka Ekonomike J.S.C., Banka Kombëtare Tregtare, Banka për Biznes J.S.C., NLB Banka J.S.C., ProCredit Bank Kosovo J.S.C., Raiffeisen Bank Kosovo J.S.C., TEB JSC., and Raiffeisen Leasing Kosovë. For more info: https://www.fondikgk.org/en/our-partners?
6. Which Financial Institutions qualify to be registered in KCGF, are there specific criteria to for registration?
KCGF may register lending Financial Institutions (Banks, Micro Financial Institutions, Non-Financial Banking Institutions) that are licensed by the Central Bank of Kosovo and which meet the criteria set by KCGF: https://www.fondikgk.org/en/financial-institutions-registration-criterias/ .
7. What is the credit guarantee of KCGF?
The credit guarantee of KCGF is a guarantee for financial partner institutions to share the risk for micro, small and medium-sized enterprise loans (MSMEs).
8. What the guarantee of KCGF covers?
The KCGF guarantee covers the principal only. It does not cover interest or other amounts owed to or other costs incurred by the lender.
9. Does the KCGF guarantee covers all amount of the qualified credit?
KCGF guarantees will be issued up to 50% of the principal of the loan for MSMEs. Maximum sized guarantee exposure that KCGF may offer to the borrower or group of related borrowers will be 250K EUR. Guarantees may also be in a lower percentage as per PFI request
10. Does KCGF issue loans and grants?
KCGF does not issue loans nor grants. KCGF is a guarantee institution.
11. Kush përfiton nga garancia kreditore e FKGK-së? NMVM-të të cilat kualifikohen për garanci kreditore janë ndërmarrjet të cilat plotësojnë kushtet e kredimarrjes në Institucionin Financiar përkatës por të cilat ballafaqohen me vështirësi në qasje në financim për shkak që kanë mungesë të kolaterali, që nuk kanë histori kreditore apo konsiderohen me rrezik të lartë nga institucionet financiare.
12. Can all MSMEs receive credit guarantees?
MSMEs that qualify for the credit guarantee may be the ones that meet the conditions below:
• Privately owned MSMEs, with no government ownership during the period of the credit guarantee coverage.
• MSMEs that have business registration and Identifying Unique Number.
• An eligible borrower must be at least (50%) owned by private citizens or permanent residents of Kosovo
• MSMEs that have less than 250 employees,
• Private micro, small and medium enterprises (MSMEs), which are not prohibited by applicable legislation, regulatory provisions, or international treaties to which Kosovo is a party.
13. What is an MSME?
MSMEs are enterprises which have no more than 250 employees.
14. Is KCGF limited to sectors, does it guarantee all sectors?
KCGF guarantees credits to all economic sectors that are not prohibited by law (for prohibited sectors see: https://www.fondikgk.org/en/prohibited-credit-sectors-and-purposes?).
15. What can be the maximum credit and guarantee exposure?
The maximum exposure of the guarantee that KCGF can offer to the borrower or the related group of borrowers will be EUR 250K, while the maximum credit exposure amount will be EUR 1 million.
16. How long can be the maximum maturity of the guaranteed loan?
The maximum repayment period of the guaranteed loan will be 120 months.
18. What types of financing can be guaranteed?
The types of financing that can be guaranteed are: loans, lines of credit, overdrafts and financial leasing.
19. For what purpose loans can be guaranteed?
Long-term and short-term investment loans for business needs that are not part of the exclusion list (see https://www.fondikgk.org/en/prohibited-credit-sectors-and-purposes?)
20. Can a loan for private purposes be guaranteed?
No, private purpose loans do not qualify for credit guarantees, only business purpose loans can qualify.
21. Can merchants and craftsmen, self-employed persons and farmers benefit from the KCGF guarantee?
Yes, traders and craftsmen, self-employed persons and farmers can benefit from the KCGF guarantee as long as they are registered in the Kosovo Business Registration Agency (KBRA).
22. Can a business owner who owns multiple firms benefit from KCGF guarantees for each of his / her firms individually?
Yes, a business owner who owns multiple firms may benefit from KCGF guarantees provided that the maximum credit exposure of the related parties of one million euro and the maximum guarantee amount of EUR 250,000 is not exceeded.
23. Can the same loan to the MSME benefit from KCGF and any other guarantee instrument?
No, it cannot. A loan can only be covered by one guarantee scheme.
24. Can the credit of the company which has other loans under the guarantee be placed under credit guarantee?
Yes, it can as far as the maximum credit exposure of related parties does not exceed EUR 1 million and the maximum guarantee amount does not exceed EUR 250,000.
25. Can start-up companies' loans be guaranteed?
KCGF allows start-up loans to be guaranteed. One of KCGF’s main goals is to improve access to finance for underserved companies and segments. For this purpose, KCGF offers the guarantees for loans of newly opened companies.
26. How can an MSME apply for a KCGF credit guarantee, who should be contacted?
The potential borrower (MSME) can not apply for a guarantee, instead, the MSME applies for a loan at one of the KCGF’s Partner Financial Institutions (see answer to point 5). The Partner Financial Institution after performing the usual credit analysis by applying its approval standards, and if the company meets the KCGF criteria then the relevant Financial Institution itself will place the loan under the KCGF credit guarantee.
27. Does KCGF require collateral for guaranteed loan?
KCGF offers guarantees to MSMEs that are sustainable and with a sound investment plan but that lacks the collateral. In line with its mission, KCGF has not set any minimum collateral requirements.