08/06/2020 | Press release | Distributed by Public on 08/06/2020 06:13
To address youth unemployment, a key economic and social challenge for the region, the European Union, through the European Investment Fund (EIF), has provided additional guarantees that will enable banks in Albania, Bosnia and Herzegovina and Kosovo[†] to offer loans on favourable terms to small and medium enterprises (SMEs). An estimated 1 200 businesses will now be able to benefit from these loans, which will allow them to create 1 300 vocational training programmes, internships and employment opportunities for young people.
The European Union is providing support as part of the EU for Youth Employment and Entrepreneurship initiative implemented under the Western Balkans Enterprise Development and Innovation Facility (WB EDIF) and its EU for Youth Employment and Entrepreneurship mechanism set up to support youth employment in the region by removing obstacles facing local SMEs when accessing financing.
Across the Western Balkans, up to 99% of all businesses are of small or medium size and provide employment to over 70% of the workforce. At the same time, unemployment rates among young people are the highest in the world. They vary from 28.3% in Albania to 55.4% in Kosovo (2018). Many young workers are engaged in temporary jobs, in the informal economy, and with a high incidence of skill mismatches.
Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement, said: 'We continue to help the SMEs as they provide many jobs in the Western Balkans. Supporting businesses that employ young people is a particular priority. Investing in youth gives momentum for a stronger, more innovative and dynamic economy in the region.'
Alessandro Tappi, Head of Equity Investments and Guarantees at the EIF, said: 'Strengthening SMEs and creating new employment opportunities for youth is a key that can unlock faster economic and social development in the Western Balkans. The European Union`s Western Balkans Enterprise Development and Innovation Facility (WB EDIF) is an important contribution to economic and social sustainability and the EIF is proud of the opportunity to act on behalf of the European Union and support the region on its growth trajectory.'
The EIF-guaranteed loans will be available to SMEs at Intesa Sanpaolo Banka Bosnia i Hercegovina, ProCredit Bank Albania, ProCredit Bank Kosovo, Raiffeisen Bank Albania and Raiffeisen Bank Kosovo and will offer favourable terms, such as reduced pricing, lower collateral, longer maturities or a combination of these.
The Western Balkans Enterprise Development and Innovation Facility (WB EDIF) is a comprehensive financing platform combining loans, equity, guarantees, incentive grants and technical assistance to support SME growth. Since 2012, the European Union has provided over €190 million through the WB EDIF, supporting 113 000 jobs and 5 400 SMEs across the Western Balkans.
The guarantee to which we refer in the press release is one of the four pillars of the Western Balkans Enterprise Development and Innovation Facility (WB EDIF). This is one of the first portfolio guarantee instruments in the Western Balkans. It is specifically designed for the local economies, preparing the financial ecosystem to implement larger EU-funded guarantee programmes supporting competitiveness and innovation, such as the programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME), EU Finance for Innovators (InnovFin), or the Employment and Social Innovation programme (EaSI).
This guarantee pillar of the WB EDIF is managed on the European Union's behalf by the EIF, part of the European Investment Bank group. EIF's central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. The European Union has funded the guarantee pillar of the WB EDIF with a total of €69.4 million. By 2019, these EU funds alone had supported over 3 000 SMEs across the Western Balkans, and mobilised a total €490 million in loans on favourable terms.
Following the success of the initial guarantee instruments, additional EU funding of €30 million was allocated in 2019, of which €20 million was provided to a national window for SMEs in Serbia. The remaining €10 million has now been disbursed to five commercial banks in Albania, Bosnia and Herzegovina and Kosovo. For more information, please refer to http://www.wbedif.eu/
About the European Investment Fund (EIF):
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment. https://www.eif.org/
Tibor Jona, [email protected], tel.: +352 691 287 052
*This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.