DIASPORA INVESTMENT WINDOW
GUARANTEE FOR DIASPORA INVESTMENTS!
For many members of the Kosovo diaspora, investing in their home country offers an opportunity to bring back capital, knowledge and experience gained abroad. However, turning this experience into a business venture can involve challenges in accessing finance. This is particularly true for newly established businesses that have yet to build a sufficient operating track record and credit history to demonstrate their viability.
Moreover, the fact that an investor lives and works outside Kosovo can make credit risk assessment more complex for local financial institutions, particularly during the early stages of an investment. As a result, even a project with the potential to generate economic activity and create jobs may face constraints in securing the necessary financing.
To address this need, the Kosovo Credit Guarantee Fund (KCGF) established the Diaspora Investment Window in July 2024. This window was made possible through capital support from the Government of the Republic of Kosovo. Through this scheme, KCGF shares a substantial portion of the credit risk with partner financial institutions, providing guarantee coverage of up to 80% of the loan principal, with a maximum guarantee amount of EUR 2 million. This creates greater scope for partner financial institutions to finance diaspora investors establishing new businesses or developing existing businesses in Kosovo.
By helping overcome some of the barriers to financing diaspora investments, the Diaspora Investment Window creates opportunities to translate capital, knowledge and experience gained abroad into tangible investments in Kosovo. These investments can contribute to business development, knowledge transfer, job creation and stronger economic activity.
WHO CAN BENEFIT?
The Diaspora Investment Window is intended for MSMEs linked to diaspora investors who invest in establishing or developing businesses in Kosovo.
| CRITERIA | REQUIREMENT |
|---|---|
| Business status | Micro, small or medium enterprise |
| Registration | Business registered with the Kosovo Business Registration Agency (KBRA) |
| Ownership | Privately owned |
| Number of employees | Less than 250 employees |
| Business operating history | Business established by diaspora investors with no more than 36 months of operation |
| Ownership share | The diaspora investor holds an ownership share of at least 30% |
| Investor profile | Must provide documentary evidence of origin from Kosovo and residence outside Kosovo |
| Financial requirements | A sound credit history and a business plan for the investment |
GUARANTEE FEATURES
The Diaspora Investment Window offers a flexible financing structure and different levels of guarantee coverage linked to the investor's own contribution.
| FEATURE | TERMS |
|---|---|
| Guarantee coverage | Up to 80% |
| Maximum loan amount | EUR 3,000,000 |
| Maximum guarantee amount | EUR 2,000,000 |
| Maximum loan maturity | 84 months |
| Financing purposes | Capital investments, equipment and working capital |
| Type of financing | Loans, credit lines and overdrafts |
GUARANTEE COVERAGE
| GUARANTEE COVERAGE | INVESTOR CONTRIBUTION |
|---|---|
| 60% | 20% own contribution |
| 70% | 25% own contribution |
| 80% | 30% own contribution |
ADDED VALUE
The Diaspora Investment Window creates value by connecting diaspora capital and expertise withfinancing opportunities in Kosovo, while enabling financial institutions to support more investmentprojects by sharing risk with KCGF.
| FOR MSMES AND DIASPORA INVESTORS | FOR FINANCIAL INSTITUTIONS |
|---|---|
| Improved access to finance | Reduced credit risk |
| Reduced collateral requirements | Reduced cost of risk |
| More favourable lending terms | Opportunities to expand the loan portfolio |
| Support for business establishment and expansion | Expanded financing for diaspora investments |
| Opportunities for development and market positioning | Support for mobilising diaspora capital |
The Diaspora Investment Window connects the diaspora's capital, knowledge and expertise with investment opportunities in Kosovo, creating opportunities for business establishment anddevelopment.
HOW THE GUARANTEE SCHEME WORKS
KCGF has no direct contact with borrowers.
Communication with the borrower takes place through the Registered Financial Institution.
Responsibilities and monitoring
KCGF operates on the premise that the RFI will conduct an appropriate credit risk assessment and verify the eligibility of the borrower and the loan.To monitor and oversee the performance of each participating RFI, KCGF has developed two monitoring mechanisms: