Edx Financing for Development Final project Kosovo Entrepreneurship Partners (KEP)

1. Unlocking financial
opportunities in
Kosovo

2. Kosovo – a fragile state
• Population: 1,883,018
• Ethnic groups:
• Albanians 92.9%,
• Bosniaks 1.6%,
• Serbs 1.5%,
• Turk 1.1%,
• Ashkali 0.9%
• Religions: Muslim 95.6%, Roman Catholic 2.2%, Orthodox 1.5%,
other 0.07%
CIA World Factbook Kosovo

3. Kosovo – a fragile state, cont’d
• In 1998, after the collapse of the former Yugoslavia,
• Kosovo experienced massacres and massive expulsions of ethnic
Albanians (some 800,000 ethnic Albanians were forced from their
homes in Kosovo).
• UN Security Council Resolution 1244 (1999) placed Kosovo under a
transitional administration.
• Kosovo declared its status as a sovereign and independent state in
February 2008.
CIA World Factbook Kosovo

4. Kosovo - economy
• Unemployment: World’s 2. highest youth unemployment rate: 55.3%
• Kosovo's citizens are the poorest in Europe with a per capita GDP of
$10,000 (2016 est.)
• Emigration is common
• Unreported/gray economy
• Most of population lives in rural towns outside of the capital, Pristina
• Inefficient, near-subsistence farming is common
• Lower labor costs are encouraging,
• But high levels of corruption, little contract enforcement, and unreliable
electricity supply have discouraged potential investors
CIA World Factbook Kosovo

5. Kosovo – economy, cont’d
• Agriculture: 12.9% of GDP (wheat, corn, berries, potatoes, peppers, fruit; dairy,
livestock; fish)
• Industry: 22.6% of GDP
• Services: 64.5% of GDP (2009 est.)
• Taxes and other revenues: 21.3% of GDP (2014 est.)
• Public debt: 10.6% of GDP (2014 est.)
• Inflation rate 0.2% (2016 est.)
CIA World Factbook Kosovo

6. Kosovo - opportunity
• Micro scale (1-9 employees) entrepreneurs make up 98.4% of the
registered companies.
• Although Kosovo has a number banks and micro-finance institutions,
few offer smaller loans under EUR 10.000.
• Such products are mostly offered by micro-finance institutions
• Which attract potential clients who normally lack business skills and
do not have business and investment plans.
Kosovo Ministry of Trade and Industry statistics
AMIK - Kosovo Micro Business Institution

7. Kosovo – opportunity, cont’d
• Commercial bank prime lending rate in Kosovo: 12.8% (2013 est.)
• Commercial bank prime lending rate in the European Union: 0.32% (2014 est.)
• Earning potential for the foreign investor: more than 10%
If there were an institution which would catalyze bringing in capital from
abroad to micro and small businesses/entrepreneurs in Kosovo…
It would result in a mutual win & win scenario:
• Win for the foreign investor who can earn much more than 0.32%
• Win for the Kosovan entrepreneur who can have access to capital at lower
than the ongoing interest rate in Kosovo
CIA World Factbook Kosovo

8. Proposal:
Kosovo Entrepreneurship Partners
K.E.P.
• I propose to establish K.E.P.
• K.E.P. will be a part of Global SME Finance Facility Program under
the IFC-World Bank Group umbrella.
• K.E.P.’s mission will be to unlock financing opportunities for Kosovan
micro scale businesses
• By catalyzing access to capital from financial institutions, including
foreign financial institutions.

9. What are the reasons to participate?
• For the government: development of the private sector as a
significant part of sustainable economic development of the Republic
of Kosovo.
• For the ODA provider: unlocking Kosovo’s small and micro
entrepreneurial base by crowding in the private sector for a 1:3 return
in investment.
• For the private sector (foreign financial investors): higher interest
rates for their capital.

10. What is the benefit of the K.E.P. program?
• Risk management for financial investors
• senior debt,
• subordinated debt,
• risk sharing facilities: first-loss guarantees, partial credit guarantees, and
interest rate buy-downs.
• Technical assistance to intermediary financial institutions (i.e. banks
and microfinance institutions) to build their capacity for developing
and implementing sound debt and risk management.
• Technical assistance to micro scale businesses and entrepreneurs to
build their capacity for sound business and debt management skills.

11. Why work with the KEP Program?
• A-Z technical assistance (from financing to business planning to
implementation)
• Customized according to individual business needs
• Driven by practitioner expertise
• Provides access to local and global sectoral information as well as
peer-to-peer knowledge sharing across the world
• Focused on outcomes

12. • The following is a communication piece from Kosovo Ministry of
Trade and Industry to their constituents: all working age people in
Kosovo who have the entrepreneurial spirit and all people who work at
financial institutions.
Explaining the K.E.P. program

13. Kosovo Entrepreneurship
Partners (KEP)
Micro Financing Opportunities in Kosovo

14. This is the young family Dardania.

15. Mrs. Dardania is staying at home.
She wants to contribute to their finances by starting a small business.

16. She has to buy equipment to start her business.

17. They don’t have cash to buy the equipment she needs.
Going to the bank is no option, as there are no small loans available.

18. Introducing
KEP

20. Kosovo Entrepreneurship Partners helps small businesses have
access to capital they need, at a lower cost.

21. KEP also provides knowledge and training to make businesses
succeed.

22. • Training and consultancy
solutions for entrepreneurs
to develop and implement
sound business plans and
• manage their debt.

23. • Risk Management solutions for financial
institutions:
• Senior Debt
• Subordinated Debt
• Risk sharing facilities
• First –loss guarantees
• Partial credit guarantees
• Interest rate buy-downs.
• IT solutions to increase to increase operational
efficiency while managing small loans.
• Technical assistance solutions for financial
institutions to build their analytical and advisory
capacity to give sound advice to entrepreneurs.

24. KEP provides A-Z technical assistance:
from business planning to financing to implementation for success.

25. For more information contact:
Kosovo Ministry of Trade and Industry – KEP
www. KosovoMinTradeIn/KEP