TIRANA, Nov. 30 – Bureaucratic and complicated administration is hindering the usage and functioning of the emerging credit enhancement schemes in Albania, according to a report by the Vienna Initiative, a framework for safeguarding the financial stability of emerging Europe. Similarly to other countries in the region, Albanian companies seem to be less informed about the credit possibilities supported by guarantees, what also results in the low quality of the applications. Additionally, the availability of the credit information on clients is perceived as one of the major problems in Albania, says a survey carried out in late 2014 with banks operating in the country.
Credit guarantees have been introduced in Albania only recently with the majority of 67 percent banks having started to use guarantee schemes in the recent 5 years. In comparison, on average 56 percent of agents in the whole Central, Eastern and South-Eastern Europe (CESEE) region have been using credit guarantees for more than five years.
Two multinational guarantee providers, the European Investment Fund (EIF) and the USAID Development Credit Authority (DCA) are active on the Albanian market.
The EIF, which is the key multinational provider of credit guarantees in the CESEE region, has made available only 20 million euros to Albania, at almost the same level compared to other EU aspirant countries in the region.
Credit guarantee schemes provide guarantees on loans to borrowers by covering a share of the default risk of the loan. In case of default by the borrower, the lender recovers the value of the guarantee.
