The Italian - Albanian Bilateral Agreement of Cooperation provides for the use of financial and non-financial instruments through the Programme for Development of the Albanian Private Sector, aimed at supporting the development of small and medium enterprises in Albania (SMEs), through interventions aimed the creation of favorable conditions for facilitating access to banking credit, in order to improve technology and to strengthen their competitiveness on the local and international market through technological innovation and improvement of production standards.
The Programme is financed in two phases:
- First phase: "Programme for Development of the Albanian Private Sector through a credit line for Small and Medium Enterprises SMEs and relevant technical assistance (PRODAPS) - AID 7961 and
- Second phase: “Integrated Assistance Programme for the Development of Albanian SMEs (IASME) – AID 9645.
The first phase of PRODAPS programme includes two important financial facilities (components of soft loans): i) the revolving Credit Line, amounting to 25 million Euro ii) the Guarantee Fund, amounting to 2.5 million Euro; and iii) the Technical Assistance component with a 1.7 million Euro grant.
The second phase of IASME programme is a follow-up of the first phase of the programme and includes: i) Credit Line refunding with an additional fund of 11 million Euro, ii) increasing the financial capacity of the Guarantee Fund from the first phase of PRODAPS with 2.5 more million Euro and iii) a component of 1.5 million Euro to fund all the Technical Assistance activities.
Implementing body: Ministry of Finance and Economy, through the Programme Management Unit (PMU)
Start date: The first phase of PRODAPS programme started in January 2009
The second phase of IASME programme started in April 2016
Status of implementation: On-going
The main objective of the Programme is to contribute to economic growth in Albania, with a view to the gradual integration with the EU, supporting the development of local entrepreneurship and widespread while promoting the adoption of standards of environmental sustainability and the general improvement of the working conditions.
The specific objective of the Programme is to improve the relationship of trust between Albanian SMEs and the local banking system, while giving access to credit as a functional tool to facilitate the widespread growth of entrepreneurship, the creation of new businesses and to encourage innovation process and product, also aims to support the adoption of practices related to corporate social responsibility, while encouraging the functional aggregations between SMEs.
- Improving the access of SMEs to financial services, promoting greater interaction between SMEs and Private Commercial Banks (PCBs), ensuring the specialization of the PCB in loan operations in the medium term;
- Increasing the availability of capital for medium-term loans and financial resources for the diversification and strengthening of banking services;
- Increasing the number of Small and Medium Enterprises as clients of the Private Commercial Banks, by reducing the level of collateral that they must meet to access the loan;
- Initiating a process of capacity building of the sector to contribute to the creation of an enabling environment for SMEs development, and interaction between enterprises, banks, public authorities and intermediate bodies (business associations, chambers of commerce and consulting companies).
The beneficiaries from this initiative will mainly be the Albanian SMEs, taken as individual manufacturing units in line with the European Union definition which has been incorporated in the Albanian legislation.
The Credit Line will be managed through Private Commercial Banks and Non-Bank Financial Institutions, involved in the programme, which deliver loans for SMEs.