The impact of microfinance institutions in Kosovo society

• Author: Blerta Aliu
• Pages: 7-13

7

Vol. 5 No.1

May, 2019

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

The impact of microfi nance institutions in Kosovo society

Blerta Aliu

Abstract

Microfi nance is increasingly being considered as one of the most e ective tools of reducing

poverty. It has a signifi cant role in bridging the gap between the formal fi nancial institutions

and the rural poor. Historically, microfi nance institutions have played the role of catalyst for

certain categories of population that have been excluded from the fi nancial support of other

institutions.

The economy of Kosovo is a transitional economy. The primary sector is based on small to

medium-sized family-owned dispersed units. Bearing in mind that in Kosovo, the population

still faces a relatively high level of unemployment (around 30.7% based on KAS -Kosovo

Agency of Statistics, Labor Force Survey Q3 2018) it is worth noting that the importance of

these institutions can be signifi cant. Through fi nancial assistance from these institutions,

people can build assets, create new jobs and increase their livelihoods. As these institutions

in our country are regulated by CBK and their main goal is to provide access to fi nancial

services in the social aspect, I found it reasonable that through this research to highlight their

impact in our society. Within the framework of the research, will be addressed the impact of

the microfi nance institutions operating in Kosovo.

In the fi rst part of this paper is described what microfi nance is, which are benefi ts of it and

the development of microfi nance sector in Kosovo. Meanwhile, the second part belongs to the

empirical analysis carried out to fulfi ll the purpose of this paper.

Through descriptive and comparative statistics, this research emphasizes the impact of these

institutions to the fi nancial support provided to this category of population and their impact

on Kosovo society.

Keywords: impact, microfi nance, Kosovo, society, loan, employment.

Introduction

Microfi nance, also called microcredit , is a type of banking service that is provided

to unemployed or low-income individuals or groups who otherwise would have

no other access to fi nancial services. Ultimately, the goal of microfi nance is to give

impoverished people an opportunity to become self-su cient. 1

Microfi nance institutions or MFIs, come in all shapes and sizes. They can di er in

scale, experience, legal statute, strategy and budget.2

Additionally, the goals for microfi nance institutions, and hence the function of

microfi nance is to:

• Be a viable fi nancial institution developing sustainable communities.

• Mobilize resources to provide fi nancial and support services to the poor,

particularly women, for viable productive income generation enterprises enabling

1 https:// www.investopedia.com/terms/m/microfi nance.asp

2

https:// www.microworld.org/en/news-from-the-fi eld/article/what-microfi nance-institution