Facilitating access to finance for rural businesses
For the first time ever, the Association of Banks in Albania (AAB) held a session on rural businesses accessing finance with the occasion of the publication of an EFSE-supported “Practical Guide for Farmers”. On September 24th, representatives from the private banking sector, business service providers and rural entrepreneurs gathered and discussed how to boost productive lending to rural businesses. RisiAlbania contributed to the event and promoted networking between banks, business service providers and tour operators – as they have access to small businesses that can benefit from accessing loans.
“Although the contribution of the agribusiness sector to the Albanian economy is quite considerable, the amount of loans for the sector is really low. We are opening new channels of communication. Private banks should explore innovative cooperation for increasing finance for rural areas and we want to support that” – said Spiro Brumbulli, head of the Association of Banks in Albania.
Agribusiness in Albania constitutes one of the most important pillars of the economy: it contributes around 20% to GDP, and 50% to employment. There are many opportunities for the sector to develop through the right investment strategies. These rely on ensuring rural clients have the right information about financial means and mechanisms, as well as access to the right expertise to implement growth-oriented business strategies.
“Many agribusinesses and farmers that need finance are not accessing it. One of the barriers to finance is that sometimes banks or micro finance institutions don’t have the necessary mechanisms in place to identify and target rural clients because they are in remote areas and they are not the typical banking clients. But on the other hand, they have good ideas and good potential for growth. We at Risi are supporting business service providers who are selling new services to agrotourism businesses or agribusinesses to enable them to access IPARD and AZHBR grants, as well as to access commercial finance”, said Clara Garcia Parra, PSD Component Team Leader at RisiAlbania.
Business development service providers have a huge potential to increase links between banks and microfinance institutions on the one hand, and rural business on the other.
The event was the first concrete step towards establishing agreements among business service providers, exporters, tour operators and commercial banks aiming to boost productive lending to rural businesses.