Under the scheme, published in the Official Gazette following approval by the State Aid Commission, the government will guarantee up to 70% of the principal on loans issued by participating banks.

The programme aims to support investment in production capacity, technology, digitalisation and productivity, while improving access to finance for eligible businesses and farmers.

Borrowers will be able to obtain guaranteed loans of up to 200 million lekë, with a maximum repayment period of 10 years. Interest rates will be capped at 2%, while fees charged to borrowers will be limited to 0.5% of the loan value.

The scheme is open to micro, small and medium-sized enterprises across all economic sectors, as well as registered farmers. Applicants must meet banks’ lending criteria and have no outstanding obligations to the state.

The scheme will remain in force until Dec. 20, 2027. Applications can be submitted until Nov. 20, 2027, while disbursement of guaranteed loans must be completed by Dec. 20, 2027.

The State Aid Commission said the measure met the conditions for implementation and included mechanisms to monitor, report and control the use of the state guarantee.

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“The rate of state aid to GDP increased from 0.5% in 2019 to 1.96% in 2020,” the report said.

During the pandemic situation, the Albanian government drafted two financial support packages for individuals and businesses.

Under these sovereign guarantees, have been supported 53 thousand employees and 318 businesses.

“As of December 2020, under the first sovereign guarantee, 492 guarantee agreements worth ALL 5.9 billion have been approved, signed between commercial banks and traders and companies operating in the sectors of trade, processing industry, production, services , construction, mining, tourism, education, media, etc. While under the second sovereign guarantee, 318 guarantee agreements have been approved worth ALL 8.9 billion, signed between commercial banks and traders and companies operating in the sectors of trade, tourism, production, construction, transport services, processing industry,”the report states. //a.i/

The decision of the MFE came after the request of the Albanian Association of Banks (AAB), which has deemed necessary a second extension of deadline for applications under this state-backed loan scheme.

The deadline for applications under this state-backed loan scheme has been extended to June 30, 2021. The sovereign guarantee covers 60% of the loan value.

“Postponing applications until mid-2021 will enable a large number of businesses to benefit loans whose activity has been hit by the COVID-19 pandemic,” MFE said.

By the end of December 2020, which coincides with the deadline for applications under the scheme of this guarantee, 308 businesses mainly in the sector of trade, service delivery or production have benefited loans, credit lines or overdrafts at a total value of about ALL 8.95 billion. //a.i/