MICROCAPITAL BRIEF: Microfinance Institution Kreditimi Rural i Kosoves (KRK) Borrows $2.3m from EBRD for Green Housing Loans

Kreditimi Rural i Kosoves (KRK), a microfinance firm in Kosovo, recently accepted an unsecured loan of up to EUR 2 million (USD 2.3 million) from the UK-based European Bank for Reconstruction and Development’s (EBRD’s) Western Balkans Green Economy Financing Facility II (WB GEFF II). KRK plans to on-lend the funds for “investments in high-performance green technologies, materials and solutions undertaken in privately-owned residential dwellings….” In particular, this is to include thermal and photovoltaic solar panels, solar lighting, and energy-efficient appliances. The funding package for KRK is divided into two tranches, with the initial commitment from EBRD limited to 75 percent of the total. The loan has a tenor of 3 years, including a 1-year grace period before repayments are to begin.

Founded in 2000, KRK is a microfinance institution based in the city of Pristina that offers loan products designed for farmers, traders, and small and medium-sized enterprises (SMEs). It was founded as the Rural Finance Project of Kosovo to assist farmers and other rural microentrepreneurs in restoring agricultural production capacity lost during the Kosovo war of 1998 and 1999. KRK has a network of 26 branches and an active loan portfolio of EUR 42.3 million (USD 49.6 million) as of 2021. The institution has served approximately 137,000 clients since its inception. It does not accept deposits.

WB GEFF II is the second set of credit lines EBRD has committed to the Western Balkans under the Green Economy Financing Facility project. This commitment, which is in the amount of EUR 50 million (USD 58.6 million), follows the initial WB GEFF package, which totaled EUR 80 million (USD 93.7 million).

Founded in 1991, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of microenterprise and SMEs. With a focus on “the promotion of private and entrepreneurial initiative,” the bank disbursed approximately EUR 11 billion (USD 13.3 billion) to 411 projects during 2020. EBRD’s shareholders comprise 69 countries plus the EU.

By Arin Atluri, Research Associate

Sources and Additional Resources

EBRD project summary
https://www.ebrd.com/work-with-us/projects/psd/52968.html

KRK homepage
http://krk-ks.com

EBRD WB GEFF II project summary
https://www.ebrd.com/work-with-us/projects/psd/51362.html

EBRD Green Economy Transition description
https://www.ebrd.com/what-we-do/get.html

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.