KfW Case Study: Kosovo

This paper describes the progress of the Yugoslav republic of Kosovo from the time the civil war ended in 1999 to the creation of the Microenterprises Bank of Kosovo. The paper describes:

• The United Nations Interim Administration Mission's (UNMIK's) recognition for the urgent commencement of banking initiatives for the revival of the economy of Kosovo,
• The establishment of the Banking and Payments Authority of Kosovo (BPK),
• The aid enlisted from: The European Bank for Reconstruction and Development (EBRD), KfW, the International Finance Corporation (IFC), the Netherlands Development Finance Company (FMO),
• The predominance of agriculture as well as micro and small enterprises (MSEs) in post-war Kosovo,
• The lack of access to and demand for financial services from MSEs,
• The non-existence of the formal financial sector and lack of willingness of private commercial banks to open in Kosovo,
• The formation of the Microenterprise Bank of Kosovo (MEB) in 1999.

The paper concludes with a description of the following challenges that MEB faced:

• Finding enough qualified banking staff, as there were no training facilities available in Kosovo,
• Facing difficulty in expanding outreach, because of lack of physical infrastructure,
• Discovering ways to make cash handling safe and manageable.