With growth in manufacturing and continued expansion of Kosovo’s exports, firms have seen an increased need to finance export contracts (i.e., to pay for the inputs, production, and shipping of exported goods before receiving payment in turn). The USAID Kosovo Compete Activity, implemented by DT Global — which promotes resilient, self-sustaining market systems and improves the private sector’s competitiveness in local, regional, and global markets — has worked to strengthen exporting businesses since launching in 2020. This includes exploring additional financing options that broaden coverage and are structured to meet exporters’ needs, such as cash flow agreements that provide bridge funding to exporters so that they have access to capital while they wait for buyers to pay invoices. 

Because traditional banks often require high collateral (not affordable for many Kosovar businesses) and apply low property valuations, up to 60 percent of Kosovar businesses in sectors such as wood processing, food processing, and information and communications technology, choose to use their own financial resources to fund their export contracts. This places constraints on exporters’ abilities to meet large orders, or to invest funds in fixed or human capital enhancements to grow their businesses. It also excludes a portion of firms from exporting if they are unable to afford self-financing their export orders.

In response, the USAID Compete Activity worked with the Kosovo Credit Guarantee Fund to develop and launch a new loan guarantee mechanism called the “Export Window.” Through the Export Window, banks can receive guarantee coverage (akin to insurance) for up to 50% of the value of loans to exporters. This reduces banks’ risks in loaning funds to exporting businesses, enabling them to relax loan conditions and associated costs. In turn, this unlocks borrowing for a larger number of micro, small, and medium enterprises — which account for around 99 percent of Kosovar businesses — to be able to finance export contracts.

The Export Window opens up a world of possibilities for Kosovar businesses to expand their production capacities and products, further increasing their competitiveness in regional and international markets. It is an important step in expanding export-oriented financing for Kosovo entrepreneurs and is projected to generate at least 6,000 new jobs for Kosovars. In its first 15 month of operation alone, the Export Window provided guarantee coverage for over €7.8 million in loans to exporting businesses in Kosovo.