IFC Investment to Boost Access to Climate Finance in Kosovo, Support Women Entrepreneurs

Vienna, Austria, October 4, 2023—Micro, small, and medium enterprises (MSMEs) and individuals in Kosovo, especially women-owned firms, will have increased access to finance, with IFC announcing a loan of up to €5 million to Raiffeisen Leasing Kosovo L.L.C. The aim is to boost competitiveness in the MSME finance market and create jobs, while also supporting the country's green transition.

The loan to Raiffeisen Leasing Kosovo—IFC`s first engagement with this largest leasing company in Kosovo, will allow the company to diversify its funding and increase lending to key segments, expanding climate and gender lending in the country. IFC's engagement will also highlight the viability of lending to underserved MSMEs, helping the company raise additional financing.

"We at Raiffeisen Leasing Kosovo are delighted to sign the first funding contract with IFC. With this funding we look forward to adding value to our leasing clients who seek financing for their business needs. We are positive that this experience with IFC will pave the road for further and bigger cooperation in the future," said Gjon Gjonlleshaj, Raiffeisen Leasing Kosovo`s Executive Director.

Fifty percent of the loan will be from IFC's own account and 50 percent from the International Development Association's Private Sector Window Blended Finance Facility. Proceeds of the loan will be used for on-lending as leases to MSMEs and individuals in Kosovo, with the women-owned MSMEs being supported by Women Entrepreneurs Finance Initiative (We-Fi) and Women Entrepreneurs Opportunity Facility (WEOF). In partnership with Goldman Sachs 10,000 Women initiative, WEOF is a first-of-its-kind facility dedicated to expanding access to capital for women entrepreneurs globally.

While MSMEs account for 99 percent of businesses in Kosovo, the financing gap is significant at around 10 percent of GDP. Women who own small businesses are even more credit constrained than their male counterparts. The employment rate for women stands at just 14 percent of the total employment it the country, while female entrepreneurs constitute only 7 percent of SMEs.

In addition, already vulnerable to the impacts of climate change, many cities in Kosovo suffer from poor air quality, with the transport sector being one of the major sources of pollutants. In response, 75 percent of the funding is earmarked for climate related projects and 25 percent for women owned MSMEs, a portion of which will be used to finance green projects. This will help increase the availability of climate finance for replacing outdated cars with hybrid and electric vehicles, and spur adoption of resource-efficient equipment and small photovoltaic installations to reduce energy consumption by individuals and MSMEs in Kosovo. It is IFC`s first loan with demonstrated green-gender use of proceeds.

"As we celebrate the 15th anniversary of Goldman Sachs' 10,000 Women initiative, we remain dedicated to empowering female entrepreneurs to accelerate growth through access to capital," said Charlotte Keenan, Global Director of Goldman Sachs 10,000 Women. "We are pleased to support Raiffeisen Leasing as it expands lending to women-owned businesses in Kosovo."

"One of IFC's key priorities in Kosovo is to improve access to credit for small businesses, especially women‐owned firms, while reducing emissions," said Rana Karadsheh, IFC`s Regional Director for Europe. "IFC's investment in a top leasing company will help provide a flexible financing option for underserved MSMEs, spurring competition through product diversification and supporting Kosovo's green transition for sustainable growth."

IFC will also support Raiffeisen Leasing to improve its environmental, social, and financial risk management practices along with sharing knowledge and best practices in gender and climate lending.