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| A tractor spraying a field planted with green salad in Lushnje |
During the month of October, Albanian banks extended a total of 568 million lekë in credit to local farmers. Compared to the previous year, this represents a significant increase of 365 million lekë or 17.8% in credit for the largest sector of the economy, A2 CNN reports.
However, despite the growth in financial support, agriculture accounted for only 1.85% of the total loans granted. Agim Rrapaj, the chairman of the Albanian Agribusiness Council, points out various challenges faced by the sector, stating, "The key factors include land certification issues, parcelization, high informality, lack of insurance, and the high cost of production, hindering business plans from aligning with financial institutions' requirements."
Over the span of 10 months, Albanian farmers managed to secure 2.2 billion lekë in loans from banks, a notable increase from the 1.8 billion lekë borrowed in the same period the previous year. The opening of the banking sector to agriculture is considered crucial, especially following the suspension of EU IPARD funds and the reduction of the budget available for the next year.
"This does not fill the gap created, but it eases it significantly. There needs to be an opening towards farmers even from non-banking financial institutions, such as savings and credit unions," emphasized Rrapaj.
In an effort to encourage sector financing, Socialist MP Erion Braçe has proposed the draft law "On Trade Certificates for Agricultural Products." According to the bill, trade certificates would enable producers to deliver their goods to a local bank after handing them over to a collector, allowing them to access credit.
Rrapaj expressed, "This doesn't fill the gap created, but it significantly eases it. I hope this is not the only solution, as financial institutions have promised to support the sector with sovereign guarantees."