47938 - KRK AGRI MSE 2

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Summary of Investment Information

Project Number

47938

Company Name

KREDITIMI RURAL I KOSOVES LLC

Date SPI Disclosed

Apr 5, 2023

Country

Kosovo

Region

Europe

Projected Board Date

May 19, 2023

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jun 28, 2023

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jun 6, 2023
Signed : Jun 20, 2023
Invested : Jun 23, 2023

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is an IFC senior debt investment of up to EUR8 million to Kreditimi Rural i Kosoves LLC (KRK or the “Company”), a leading microfinance institution in Kosovo. The investment will be shared equally between IFC’s own account and concessional financing provided by the Global Agriculture & Food Security Program (“GAFSP”). The proceeds from the proposed investment will be used for on-lending to individual entrepreneurs and micro-businesses in Kosovo, including smallholder farmers, microenterprises, women-owned small businesses and entrepreneurs operating in the agriculture sector and underserved rural areas. The project fits IFC’s and GAFSP’s strategy by directly supporting investment in micro and small enterprises and agribusiness in Kosovo.

Associated Advisory Engagement

The project will build on the work by IFC’s advisory services to (i) facilitate access to agriculture finance aiming at building agriculture lending capacity of financial institutions; (ii) support financial institutions to improve agriculture lending procedures by designing and integrating digital data-based decision support systems and non-financial services (weather, prices, et) for agri-MSMEs to better manage their agriculture businesses; and (iii) developing Climate Smart Agriculture Finance to expand bank lending while creating resiliency and sustainability of Kosovo agriculture to mitigate and adapt to climate change (project #606029) and to develop a legislative framework for microfinance in the country.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management	0.19
Guarantee
Loan	4.27
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance
Straight Senior Loan	Loans to Microfinance
Straight Senior Loan	Loans to Microfinance
Straight Senior Loan	Loans to Microfinance
Straight Senior Loan	Loans to Microfinance
Straight Senior Loan	Loans to Microfinance
Client Risk Management	Loans to Microfinance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The project is expected to provide increased access to finance for underserved microenterprises and individual entrepreneurs in Kosovo, including smallholder farmers, women-owned small-businesses, and entrepreneurs operating in the agriculture sector and underserved rural areas. The MSME finance gap is estimated at US$342.3 million representing roughly 5.4 percent of GDP, of which the microfinance gap is US$4.3 million. In addition, approximately 28.4 percent of microenterprises are either fully or partially constrained and female micro-borrowers are more constrained. The Project is expected to support the growth of the Company’s loan portfolio, thereby boosting economic activity in the microfinance sector including Agri-MSMEs and those led by women.

E&S Category Rationale / Risks and Mitigation

The project has been provisionally classified as category FI-3 according to the IFC's Sustainability Policy. The environmental and social risks of the MFI's overall portfolio are considered to be low and carry minimal or no adverse environmental and social impacts. The Project will not support activities on IFC Exclusion List, coal-related activities, or higher risk business activities that may include: a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant occupational health and safety risks. IFC's applicable E&S requirements are the IFC Exclusion List and the applicable environmental and social host country laws and regulations. In addition, KRK will be in line with the life and fire safety requirements, and requirements of IFC's PS2 on Labor and Working conditions. As part of the existing IFC Project, KRK has an appointed E&S officer and an existing Environmental and Social Management System (ESMS) established in 2019 and updated in 2021. The ESMS requires all loans to be screened against the IFC Exclusion List and applicable national laws in Kosovo, and includes an E&S policy, roles and responsibilities, and categorization guidance. KRK will be required to maintain adequate ESMS capacity and implementation, and proper labor practices in line with IFC's applicable E&S requirements.

Contacts

For Inquiries About the Project, Contact

Kreditimi Rural I Kosoves, LLC
Lulzim Sadrija
CEO
+381 38 222 345
lulzim.sadrija@krk-ks.com
Str. Behije Dashi. 20, Pristina 10000
http://krk-ks.com/

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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