Italian loan to assist SMEs

TIRANA, Jan 20 – Finance Minister Ridvan Bode said assisting the Small and Medium Enterprises development will keep the country’s development growth on track.
The new project, supported by Italy, is to secure a 25 million euro soft credit to support the SMEs and also 2.5 million euros, also soft credit, to create a guarantee fund to assist these enterprises when applying for credit.
Another 1.7 million euro grant will be used for technical assistance.
Each loan will be for 38 years with an 18 year grant period. There will be a zero interest norm, the finance ministry reported.
The loan will denominations will be from 50,000 to half a million euro.
Loans will be disbursed from Tirana Bank, Credins, Banka Komb쵡re Tregtare, BIS Banka, Raiffeisen Bank.
The minister said that the SME are the essence of the country’s economy and have a great impact on the country. Small and medium sized businesses make up 95 percent of the companies operating in the Albanian market.
That is also supported by the idea that 85 percent of the GDP comes from the private sector, especially following the privatization of the large public corporations.
Albania is seen, within recent years, as a stable country in regards to its macro-economic indicators with an annual inflation of about three percent and a GDP growth of six percent.
The minister said that the government had followed favorable policies for the private sector by cutting in half the taxes, lowering the contribution of social and health insurance and also facilitating other tariffs.
Credit available to businesses has significantly increased in the country in recent years from 10 percent of the GDP in 2005 to 35 percent of the GDP in 2008.
Additionally, the minister said that the global crisis would undoubtedly have its impact on the country’s economy. Lowering credit will be a direct impact, he said, urging the banking system to find ways to support the SMEs in this difficult period.
The minister said that the new project with zero interest loans to support the SMEs was one of the ways to reduce the negative impact.
The government has also signed a $9.2 million loan with IFAD, also for crediting the SMEs.