UNMIK ON AIR

Micro –Credit Fund Institution in Peja

By Arta Pllana

 

 

 

Hello and welcome, this is UNMIK on air.

 

Micro finance institute AFK in Peja was established by NGO Mercy Corps in October 2000. At that time people in Kosovo hardly had access to banking services and the institution was very welcome for the small businesses in the region.

 

Vahdet Anadolli, General Manager of AFK, explains how the organization started.

 

- We started with small loans. Our aim was to help people with a good background and a sense for business. First we gave only small loans but gradually we moved on to bigger loans. Now we are in a phase where our clients are with us from the year 2000 and became successful enterprises.

 

AFK provides loans from 300 Euro up to 25.000, with an average of 2.000 Euro. This money has to be returned in two years. Over time the financial institution managed to build up a group of regular clients. These customers already took several loans and pay the money back in time. 

 

Lutfije Mala is AFK-client from the very beginning. She got her first loan of 7.500 Euro in 2000 and with that money restarted her Beauty Saloon. Now business is flourishing and she could go to a regular bank to borrow money. However, she still prefers to deal with AFK as she build up a good relation with them and the organization gives many benefits to long-term steady clients like Lutfije.

 

- I just found out that I have almost paid back my third loan and now I have some benefits, such as a reduction of interest rate, which will not be calculated for the last 3 months. (I can continue to be their regular client in a 4th installment.)

 

AFK is not the only micro credit institution in Kosovo - there are plenty of them. Vahdet explains that these organizations usually serve very small businesses that have difficulties accessing loans from ‘normal’ banks. He believes this kind of support to small business gives a real ‘push’ to the local economy.

 

- Every institution similar to this one, and not only here but rather throughout the world, is characterized as a non-profit institution. We manage foreign investments; in this case we manage Mercy Corps’ funds from many donors. The essence of existence of such an institutions is to stimulate the economy of a certain region, and that’s exactly what we do in Kosovo.

 

Meribane Shala, AFK’s Financial Manager, is not only optimistic about the impact of micro credit institutions on Kosovo’s economy, she sees micro financing as a profitable industry in itself.

 

- Micro financing is a new industry in Kosovo, but I see a big development and success in the past 5 years, from the time when we started with microfinance.

 

AFK is a local NGO run by some 12 local staff members. Various international investment funds and NGO’s provided the necessary funding for it’s micro credit arrangements. Behind these funds are private investors like Garrett Wyse from Ireland: mostly ordinary people who put away some small savings in a general fund. They get interest but often don’t know exactly where every cent goes.

 

 - I started to work here in Kosovo a few months ago. When I attended a conference in Geneva related to micro finance I bumped into the people that run the investment fund in Switzerland in which I had stalled some money. They told me that I have a share in an institution in Kosovo. I had not realized that at all, so I came back and I found out it was AFK based here in Peja   CUT

 

As he just finished his PHD on Microfinance Garrett was interested to visit the organization where his own money had been invested.

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So I immediately got in contact with Vahdet, the manager, and I said - I’d love to come and meet you, see the institution, see the people who benefit from the money invested … and see how it is going … the way it works

 

Garrett hopes to get people in Ireland and the rest of Europe interested in lending money to this kind of projects. It takes only a small amount to start up a micro credit institute. Once the organization is operational, it sustains itself plus the original investors keep getting an interest rates from their share.

 

 

- I am in the process of giving my share away to the people of the town where I live. So in theory and practice everyone in my hometown will have a share in these institutions. that money could be recycled again and again so the people in the developing world can actually help themselves.

 

In Kosovo micro credit institutions will remain necessary for a long time to come. AFK hopes to attract more investors and serve as much small businesses as possible. Not only the businessmen will benefit, also the investors, the organization itself and finally even the whole region, as the work of AFK will help create more job opportunities.