From Isolation to Innovation
Expanding Albania's Credit and Productive Sectors
TIRANA--Establishing a robust private sector is one of the keys to developing Albania’s economy and placing it on a path toward sustainable growth. Toward this end, in 2002 the United States Agency for International Development (USAID) launched the Small Business Credit Assistance (SBCA) project, to increase the competitiveness and productivity of Albania’s private sector.
The SBCA project ended in February 2007, but assistance to small and medium enterprises continues as part of USAID’s overall assistance program that encourages economic growth, strengthens democracy and governance, and supports investments in the people of Albania.
Through the SBCA project, thousands of small and medium enterprises across Albania, particularly those in the agricultural and productive sectors, gained much-needed access to credit and received expert advice from marketing and management specialists to increase the growth and strength of their businesses.
The project was designed in two phases. For the first two years, SBCA business development specialists and their local development partners covered the country—helping businesses apply for loans and providing the training and technical assistance they needed to best use their new credit. In Phase I of the project, more than 4,000 businesses received assistance.
Through its partnerships with Albania’s National Commercial Bank (BKT), and Albanian Partners in Microcredit (PSHM), a local microcredit organization, USAID injected more than $3 million into Albania’s financial system during SBCA’s five-year tenure. Moreover, approximately 99 percent of SBCA-financed loans have been repaid, enabling the initial lending capital to be recycled more than five times to new borrowers, thereby maximizing its impact.
SBCA business development specialists worked with several companies to improve the management and marketing skills of enterprise operators and analyze the costs and benefits of introducing the latest technologies to their operations.
Through this support, Albanian businesses increased their sales by nearly $33 million and created almost 1,200 new jobs over the course of the project.
The introduction of innovations and quality standards has produced some impressive results. Ten new domestically produced cheeses with consumer-friendly labels and eye-catching branding were, for the first time, introduced into local market; an Albanian olive oil producer was recognized in Italy as producing the best extra virgin olive oil in the Mediterranean; and producers and manufacturers of everything from watermelons to metalworking achieved international standards of quality and safety.
The success of USAID’s financial institution partners — BKT has risen to become the second largest Albanian financial institution and PSHM is converting into a bank—and the competitiveness of clients assisted speak optimistically to the future of Albania’s emerging economy.
