Banks Willing to Loan

Kosovo had imposed measures to curb COVID-19 on March 13th, when the first cases with this virus were also marked in the country.

Until May 4th, when the first phase of relief measures has begun, and later May 18th the second phase, according to economic organisations, businesses have suffered major losses as most businesses have either been closed or developed restrictive economic activity.

To recover financial damages they are seeking financial support from the government, namely, to enable facilities in the procedures for obtaining loans from commercial banks.

Shacir Palushi, owner of the company “Futex” from Suhareka, the company that deals with the production of non-alcohol and energy beverages, in a conversation for Radio Free Europe, says state authorities should create opportunities for credit-taking businesses in commercial banks with the period greis (a set deadline for non-paying loans) because he says, only guaranteeing loans is insufficient.

The majority of businesses have no mortgage problem with liquidity and with the possibility of returning the loan installment. Especially those businesses that have not operated at all for three months. All of this makes it very difficult if they take a loan and don't take a price in at least 6 or 12 months, this period for businesses to start recovering”, Palushi said.

Even Astrit Panja, executive director at the Kosovo Producers Club in a conversation for Radio Free Europe, says the private production industry has, in effect, suffered serious losses and the state must guarantee business loans.

“The state must guarantee 80 per cent of the loan, while commercial banks must guarantee 20 per cent of the loan, while the interest rate is subsidised by the government“.

“If businesses receive credit and interest rates, government subsidies from 75 per cent to 100 per cent, which are making many countries in the world. This loan for new investments will be a major boost for the production sector,” said Panja.

OEAK: Businesses must benefit from grants scheme
Businesses in Kosovo have repeatedly complained of difficulties in access to finance, and credit assistance say it will facilitate business work.

Arian Zeka, executive director of the American Economic Ode in Kosovo, says of Radio Free Europe that overall economic recovery in Kosovo depends on helping private businesses.

He says guaranteeing loans and subsidising the credit interest rate will ease their financial situation, but Zeka estimates other forms should be found for grants as well.

“Crahas this, businesses especially small and medium-sized enterprises, production companies should also benefit from grants schemes that should be made available by the government in the future. Whether for expanding their existing line of labor force training or even for investing in quality standards necessary for businesses to export their” products abroad, Zeka says.

Some businesses cannot get loans without any support
Commercial banks in Kosovo are willing to lend the country's economy, says executive director at the Kosovo Banks Association Petrit Balija. But according to him, it depends on how ready businesses are for credit.

There are several different categories of businesses known to be “It's business in categories that are easily able to take credit and I believe they won't have any trouble. But there are businesses that have been hit hard financially that do not meet normal credit conditions, and in these cases we still need to have a state mechanism like the Cremation Fund to help credit businesses that have been hit by pandemic and have no capacity to obtain loans without any such support”, Balija told Radio Free Europe.

Commercial banks operating in Kosovo, Balija said, have enough capital, have good liquidity and are in position to lend the economy.

According to the Central Bank of Kosovo, the effective interest rate in commercial banks is 6. 3 percent.