PRESS RELEASE
Governor Sejko attends the activity on: “Lending to and funding the Albanian agriculture sector”

On 26 January 2022, the Governor of the Bank of Albania, Mr Gent Sejko, attended the activity organised the Ministry of Agriculture and Rural development on: “Lending to and funding the Albanian agriculture sector”.

The activity was opened with the welcome and opening speeches by: the Minister of Agriculture and Rural Development, Ms Frida Krifca; the Minister of Finance and Economy, Ms Delina Ibrahimaj; the Head of Albania for the European Bank for Reconstruction and Development (EBRD), Ms Ekaterina Solovova; the Chairman of AAB’s Supervisory Board, Mr Bledar Shella; the Governor of the Bank of Albania, Mr Gent Sejko; and the Prime Minister of the Republic of Albania, H.E.Mr. Edi Rama.

This meeting focused on encouraging discussions about lending to agriculture sector in Albania and launching the initiative on the Albania Agribusiness and Tourism Support Facility.

In his address, Governor Sejko pointed out that despite the considerable progress in the last years, the Albanian agriculture sector, overall, and branches related with it- agritourism and agribusiness - are still far from the full utilisation of both resources and potentials they have.

The Governor emphasised that notwithstanding developments in agricultural sector which may be complex, the support with funds and loans to the agricultural sector, deserves to have a higher attention from banking sector.

“In concrete terms, agricultural sector benefits only 1.7% of the funding that banks provide to private business. This ratio has not change over the last decade, despite the novelties that banking system has offered to lending market, while it remains far from the real needs of this sector” - Mr Sejko said.

The low lending rate is related to the high risk - both real and perceived - that investment in agriculture bears, though this risk is being reduced. On the other hand, promoting agritourism and supporting agribusiness, grow the value added chain and profitability of investment in agriculture.

Next, Governor Sejko greeted the Albania Agribusiness and Tourism Support Facility (AATSF), which includes the joint contribution of the Albanian Government and the European Bank for Reconstruction and Development (EBRD). He added that this facility provides a significant contribution, around EUR 150 million, in both forms: direct loans and supportive guarantee for lending.

In this light, the Bank of Albania deems that it is time for banking sector to pay a higher attention to agriculture sector.  Albania owns around 24% of its territory as agriculture land, and offers still fully unexploited possibilities in the fields of agritourism and agribusiness. This potential should be considered a joint growth possibility to both agriculture and banking industry, as well as a possibility to diversify credit risk sources in your balance sheets.

At the end of his address, the Governor highlighted that without affecting its soundness’ indicators, the banking system will know to position itself as a supporting-development agent. This sector ought to increase its attention and the financing, analysing and advisory capacities, by fulfilling its mission for the sustained growth of the country.