The government has established the Albanian Development Bank, which will manage funds coming from abroad and support underfunded sectors of the economy such as agriculture and small enterprises with loans. Kapitali has learned that the bank, whose shares are fully owned by the Ministry of Finance, was registered this Wednesday at the National Business Center.
"The Albanian Development Bank JSC has as its main objective the promotion of the economic, social and environmental development of the country, in full compliance with the requirements of the legislation on state aid. In this context, the Albanian Development Bank JSC aims to facilitate access to finance, mainly through financing and support for enterprises in underfinanced sectors of the economy, as well as the inclusion in the financial system of individuals who are not offered full services by the banking system," the Bank's statute states.
Establishment of the Albanian Development Bank
The Albanian Development Bank will be led by the former CEO of Intesa San Paolo Bank Albania, Silvio Pedrazzi. The Italian banker led Intesa San Paolo in Albania for 8 years, from 2013 to 2021, when he decided to step down to retire.
However, after 4 years, Pedrazzi has decided to return to the financial world, this time at the head of a state-owned bank. Meanwhile, the Supervisory Board of the Development Bank will include Arben Shkodra, Eris Hysi, Irida Huta, Artur Asllani and Daniel Marc Demeulenaere.
Without licensing from the BoA
The Albanian Development Bank was established by a separate law, without licensing from the Bank of Albania. This has also created considerable concern for the International Monetary Fund. In a recent statement in Tirana, the IMF mission stated that the establishment of the Albanian Development Bank will add further complexity to the financial sector in the country.
According to the IMF, the activities of this bank should be limited in time and target market failures to avoid stifling private investment.
Albania has a bitter experience with state financing schemes, starting with the famous Japanese tractor scheme in the 1990s, where money was taken in the form of loans from the state and the vast majority of it was never paid back.
But how will the Development Bank be financed?
According to the scope of activity submitted to the NDB, the Development Bank will also act as an agent for the administration of national grants in accordance with the decisions of the Council of Ministers and for any other grant scheme.
But in addition to administering national grants and those coming from the European Union, the Development Bank can raise money by issuing bonds, accept short- and medium-term deposits from commercial banks and other domestic and international financial institutions, and can accept repayable funds from the public, especially from individuals who are not fully served by the banking system, in the form of savings products, through a special entity of the Albanian Post j.a.
The Albanian Development Bank will have as its main objective the promotion of economic, social and environmental development, mainly through financing and supporting enterprises in underfinanced sectors of the economy, as well as the inclusion in the financial system of the public, which is not fully served by the banking system.
It will have the right to exercise financing activities of a promotional nature, such as lending to small and medium-sized enterprises, as well as domestic startups, to promote growth, productivity, competitiveness and expansion in international markets.
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