Guaranteed credits, but suspended grants for diaspora

Kosovo's diaspora are seen as a major capital source for the country's economic development. However, the Investment Window, established to support its investments, is simultaneously facing success stories and visible challenges.

ReachteQ Company LLC in Kosovo is one of 19 diaspora businesses that have benefited support from the Diaspora Investment Window.

This initiative, launched in July 2024 by the Government of Kosovo in co-operation with the Kosovar Fund for Cremation (FKGK) and the American International Development Agency (USAID), aims to boost diaspora investments in the country.

Erblin Lekaj, co-founder of the company, raised in Germany, says the Diaspora Investment Window has been crucial to the development and establishment of its production business, launched just over a year ago.

His company deals with design, production and the sale of tools guaranteeing safer working conditions in the construction sector.

Thanks to the FKGK guarantee, Lekaj says his company has secured a three-year loan to a commercial bank in Kosovo, without having to impose private capital as guarantees.

“We have an office in Pristina, but we have a partner production company in Kosovo and we have increased capacities. By October, we will add the amount of production, while the company plans to expand the plant and increase the number of workers, so that we export tools to Germany”, Lekaj says of Radio Free Europe.

After boosting business activity, Lekaj shows that last month he has returned with his family to live in Kosovo.

In addition to his company, 18 other businesses founded by Kosovo exiles have supported 22 loans approved by the Diaspora Investment Window.

So far, according to the KKGK, 19 companies worth a total of 3.8m euros, out of which 2.8m are guaranteed by the Fund.

The largest investments have been realised in the accommodation and food services sector . 1.5m euros followed by the production industry at 1.2m euros.

In other sectors, retail and majority trade, builder, administrative activities, and other services investment has been below $500,000 each.

This initiative shows the extraordinary potential that the diaspora has in strengthening Kosovo's economic development”, the KKGK's response to Radio Free Europe said.

The initial pledged fund stood at 10m euros -- eightm euros from the Kosovo government and two million from the KKGK.

So far, the government has transferred threem euros of its contribution, while the KKGK, as project implementer, has allocated twom euros, creating a capital of five million to support guarantor activities.

The second portion of the government's pledged funds, worth fivem euros, say by the KKGK, will be available depending on the level of use of the first portion of capital, as the Fund will continue to guarantee loans to all those interested and meet the required criteria.

Dedush: Low diaspora interest for investment in Kosovo

Naim Dedushaj, from the Albanian Business Network in Diaspora, says interest by diaspora investors is low, initially due to the global situation, but also lack of co-ordination among Kosovo institutions to facilitate access to the project.

According to him, requests for many documents and lack of clear information on this process have caused businesses to hesitate.

The League of Albanian Diaspore Business operates in 25 states with over 10,000 member businesses, but Dedusaj says there is no official report that any member company has benefited from this window.

For example, many banks have been unaware of clearly explaining the necessary procedures to diaspora investors, giving them general, not specific demands. I've called some banks myself and I haven't really understood the demands. And, for this reason, I haven't been able to convey the information to diaspora investors”, Dedushaj tells Radio Free Europe.

Lekaj admits he has faced problems of this kind, but, according to him, they have only been visible in the initial phase of implementation of the project.

From FKGK say that, just two months after launching, in September 2024, the Fund has organised information training for bank staff, which would deal directly with project customers.

Subsequently, the Fund maintains information/informative training for bank staff”, said in response.

But, Lirim Krasniqi, policy analyst in the Germin organisation, which deals with diaspora issues, says the results of this project are not satisfactory.

According to him, the programme is not even transparent.

“To assess the impact, clear statistics must be published: the number of applications, guaranteed funds, established businesses and created jobs. In the absence of transparency, there is the risk of increasing distrust and uncertainty”, Krasniqi tells Radio Free Europe.

For all these questions, Radio Free Europe addressed the Ministry of Finance in charge, but after more than a week, no answers were received.

USAID shut down, grants off

Krasniqi, even suspected that closure of U's activitiesAID has influenced exiles to be more reserved to invest in Kosovo, as the information campaign has been supported by this agency.

U nAID, too, intended to support diaspora investors through grants and advisory services.

Businesses that obtained loans guaranteed by the FKGK were also qualified for grants from this agency.

The deadline for application was from August last year until July 31st, 2025.

But with the U.S. President's decision, Donald Trump, most of W. AID that has invested over one billion euros in Kosovo has been suspended early this year.

Lekaj says there was no way to apply for grants from this agency.

When we took the loan, the agency was closed. That was a problem, because after the loan approved, we calculated the USAID grant, but we failed to apply”, he says.

The criteria for applicants have been to secure financing from a bank and hand in the guaranteed loan contract from the Kosovar Fund for the Creday Guarantee.

The amount of grants, according to the announcement of USAID funding opportunities, has been from five thousand to 30,000 euros.

The use of this fund was meant for staff training, marketing services, machinery purchases, and so forth.

But, with USAID closed, the grant part no longer applies, the FKGK says.

According to the latest census data, carried out by the Kosovo Statistics Agency in 2017, about 550 thousand people from Kosovo live in diaspora.

The Kosovo diaspora, over the years, has played an important role in the country's economy through remittances, investments in real estate and spending that they do during holidays in Kosovo.

Official data shows that, last year, remittances reached over 1.3 billion euros, while in the January-June period of this year stood at over 651 thousand euros.

Direct investments in Kosovo in 2024 amounted to 850 thousand euros, while in the first five months of this year reached 365 thousand euros.

The largest value of investments is in the real estate sector, around 277m euros, where the diaspora is estimated to have the primat.