Tirana, June 22 – IFC, the private sector arm of the World Bank Group, signed a 20 million Euro agreement on Friday with Banka Komb쵡re Tregetare to help the bank strengthen its housing finance operations.
The loan will boost the emerging housing finance market in Albania and promote competition, an important part of IFC’s program to support overall development of the country’s mortgage market.
This investment is part of IFC’s boarder strategy to develop housing financing through increased mortgage origination in Albania and other emerging economies in the region.
“Although the loan size is relatively small compared to BKT’s balance sheet total of 700 million Euro, we give special importance to this transaction for several reasons: First of all, it elevates our many years of successful partnership with the IFC to another level. Secondly, the loan represents very competitive conditions by any private sector company in Albania from an international lender. Finally, it comes with technical assistance and the IFC’s world-wide mortgage experience, which will prove invaluable in the context of Albania, where the primary mortgage system is infantile and secondary mortgage market financing is non-existent,” said IFC’s CEO Seyhan Pencapligil.
“Financial market development is a key part of IFC’s strategy for Albania, and we are pleased to help introduce new products such as mortgage financing. By providing funding for the primary mortgage system, IFC will not only make home purchasing more affordable, but will also help increase the depth and liquidity of the country’s financial markets. The investment will also support growth in the construction industry and related sectors,” said Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia.
In addition, IFC will provide advisory services to Banka Komb쵡re Tregetare to help standardize its mortgage credit and operations, using the IFC Mortgage Market Toolkit. IFC will also support Albania’s regulatory authorities in improving the legal framework, enabling a better environment for housing finance operations.
Banka Komb쵡re Tregetare is a commercial bank in Albania with total assets of about 700 million euros. It is the second-largest bank in the country, with a network of 36 branches in 18 cities. In 2006, it was selected as the “Bank of the Year 2006” by The Banker magazine. The bank’s shareholders comprise Calik/Seker Consortium (60 percent), the European Bank for Reconstruction and Development (20 percent), and IFC (20 percent). The bank, which is active in the retail business, is expanding regionally, opening its first branch abroad in Pristina, Kosovo, in July 2007.
Last week, the same agreement was announced, providing 10 million Euros to Albania’s Banka Popullore (People’s Bank) to help the country’s mortgage lending market, to “help expand the housing finance market in Albania” adding over 1,000 long-term residential mortgages, according to a statement.
Albania joined the World Bank in 1991. World Bank commitments to the country to date total US$925 million.
Banka Popullore, one of 17 private banks in Albania, started operations in March 2004.
