Kosovo Financial Sector Development

active

The proposed US$52 million operation is in response to a request from the Ministry of Finance for financing to strengthen its financial safety net and expand financial access to support economic opportunities. Kosovo faces challenges to build a stable, inclusive and modernized financial system that can leverage opportunities for growth across the country, minimize financing gaps to underserved firms and individuals and support Kosovo’s integration into Europe. The proposed instrument is an Investment Project Financing (IPF) operation with result-based financing (Performance Based Conditions, PBCs) to contribute capital to the deposit insurance fund, partial credit guarantee fund and a proposed national development finance institution. The Deposit Insurance Fund of Kosovo (DIFK), Kosovo Credit Guarantee Fund (KCGF), Ministry of Finance, Labor and Transfers (MFLT) and Central Bank of Kosovo (CBK) are requesting investments and technical assistance to build buffers to safeguard financial stability and to improve financial inclusion to generate economic opportunities for the Kosovo population. 14. Project Components. The project has four components: (1): Strengthening Financial and Institutional Capacity of the Deposit of Insurance Fund (US$25M) (2): Financing Underserved Firms (US$21M), (3) Component 3: Catalyzing Faster Payments (US$5M), and (4) Project Management (US$1M).