Creative Business Solutions (CBS) will implement a new project, SmartCapital, financed by USAID. The mission of SmartCapital is to boost economic growth by facilitating financing, sustainable business investments, and trade in vital sectors of Albanian economy including agriculture, tourism, and environment.
Albanian SME’s have limited access to capital. They produce 75% of country’s GDP but receive only 28% of financing. Banks and financial institutions have excess liquidity but high NPL (Non-Performing- Loans). Informal SME practices have prevented banks to inject deserved level of credit to this vital segment. In addition, the distribution of credit has been disproportionate between the urban and rural enterprises.
SmartCapital will mobilize a significant contribution of resources, through innovative and market-based solutions. SmartCapital’s interventions will be directly attributable to achieving at least $21Million of direct economic benefit for enterprises supported through the program. SmartCapital addresses a challenging economic environment in Albania particularly facing SME’s when accessing capital, dealing with new investments and growing their trades. The government has identified three sectors as priority (Agriculture, Tourism and Environment) but a moratorium on construction buildings; an informal grey economy and outdated technologies have significantly hampered growth.
SmartCapital, in alignment will USAID’s country strategic priorities will:
1. Facilitate Access to Capital for Agribusinesses
2. Develop Innovative Financial Technology and Trade Platforms to Connect Demand with Supply
3. Implement Environmental & Energy Efficiency Initiatives with Economic Benefits
4. Provide SME’s with a Comprehensive 360° Package of Services including, Accounting, Marketing, Financing and Certification
5. Deliver Consultancy and Technical Assistance to Municipalities with a Vision on Rural & Economic Development
The program, proposed to last 3 years, will provide a measurable economic impact. It will generate a direct economic benefit of $21 Million to assisted enterprises, will facilitate $15 Million in financing and create 1,070 new jobs. Activities and interventions will be countrywide with attention rural and under- developed areas. Services will be delivered through sustainable practices and beneficiaries will be responsible for part of service cost.
The program is designed to deliver growth-oriented services throughout a network of partners and beneficiaries. SmartCapital’s objectives will be achieved through an integrated approach, designed to achieve maximum impact. At the core of the program is direct facilitation of access to finance and delivery of technical and business development services to SME’s, which would then – after demonstrated success – be connected with technology platforms to accelerate trade and financing. The project pays special attention to Climate Change by facilitating various interventions in support of Environmental friendly practices. To achieve large-scale impact, targeted intervention is also strategically planned for select municipalities with spread on rural areas.
AgroCapital, a previous program of USAID Albania, implemented by CBS, has been very effective at leveraging capital for underserved beneficiaries. It has facilitated $14.8 million in financing for agri-businesses, produced more than $18 million new investments and created over a 1,000 new jobs. The project is generating 1 to 13 value for money – a dollar invested is generating $13 value of economic impact. AgroCapital achieved success by working directly with beneficiaries, upgrading their capacities while leveraging funds from banks and other institutions including EU-IPARD funds.