The sovereign guarantee for crediting farmers was only used to the extent of 12%.

2026-02-25 07:18:57, Sociale CNA

The sovereign guarantee for crediting farmers was only used to the extent of

The Albanian government established a 3 billion lek fund in July last year to guarantee credit to farmers from the banking sector. Data from the Ministry of Finance shows that this mechanism has not been successful.

At the end of 2025, the amount used by the sovereign guarantee scheme in question was only 366 million lekë. This amount constitutes only 12% of the total amount made available for this purpose.

According to the terms of the Council of Ministers' decision, the Ministry of Finance undertook to guarantee 70% of the value of farmers' loans, for a maximum loan amount of 25 million lek.

The agreement provided that lenders would provide guaranteed loans to micro, small and medium-sized entities, as well as to farmers who are registered and equipped with a farmer's NIPT certificate, according to the type of investment in accordance with the priorities of the agriculture and rural development sector.

The interest rate on contracted and disbursed loans should not exceed 2%, while the fees applicable to borrowers for granting loans should not exceed a maximum of 0.5%. Lenders should offer loans with a grace period of no less than 12 months. The maximum term of guaranteed loans could not exceed five years.

Meanwhile, the time available for the use of this instrument was relatively short. While the decision of the Council of Ministers was approved on July 31, 2025, the final deadline for applications to borrowers was November 20, 2025.

The guarantee scheme has expired, however, during February, the Minister of Finance and Agriculture held a meeting with the heads of commercial banks in the country to receive suggestions on the possibilities of improving this scheme, which suggests that this mechanism may be repeated this year, in parallel with the cheap liquidity support program offered by the Bank of Albania.

Bank executives expressed numerous reservations about these instruments, starting especially with the restrictions placed on the interest rate. They argued that lending at a 2% interest rate to farmers and small agricultural units in general is almost impossible, due to the high costs and risks posed by this segment.

At the meeting with the ministers, the bankers also put forward several other proposals, such as extending the maximum loan term, making the grace period optional, clarifying the farmer's commercial status with the fiscal one, more coordinated and intensive marketing to make the product widely known, as well as a better definition of the investments allowed within the framework of these schemes.

The low utilization rate of this scheme confirms that the scheme was not built in a very functional way and may need to be revised to better serve farmers./ Monitor.al