Mehmeti: Banking sector is contributor to the country’s economic growth

The Governor of the Central Bank of the Republic of Kosovo, Fehmi Mehmeti, at the Annual Banking Conference of Kosovo, emphasized that Kosovo's banking sector in recent years has considerably increased its role in financing the country’s’ economic growth and this positive trend of development has led to continuous improvements in access to finance, which for a long time has been reported by businesses as one of the main barriers to their business development. 

“The easing of credit standards, followed by a reduction of credit interest rates, served as important incentives for increasing credit demand, thus resulting with an annual credit increase of 11.6 percent in October this year.  In October 2018, the average credit interest rate was 6.6%, which represents a significant improvement compared to a period not so long ago, whereas the rate of non-performing loans was 2.8%, which reflects a very good situation in terms of the quality of loan portfolio.  These indicators show that loan offers have improved considerably. I would like to attach particular importance to the good quality of the loan portfolio, which shows the bank’s good credit risk management, and could just as well serve as an important indicator of the favorable economic environment for banks operation in Kosovo, stated Governor Mehmeti.   

In his speech to the attendees, Governor Mehmeti said that significant development in the banking sector is also the improvement in access to finance, especially in the agricultural sector and the manufacturing sector, which in the last year were among sectors with highest increase of received loans.  

Governor Mehmeti stated that the Central Bank of the Republic of Kosovo, with all of its capacities, is in the function of supporting sustainable development of the financial system.   

“We are providing the banking sector with utmost modern standards of financial regulation and supervision, thus making banks and other financial institutions in Kosovo operate pursuant to rules that are applicable in all developed countries. In addition, the CBK provides the banking sector with a modern financial infrastructure. The interbank payment system, a modern, efficient and secure system, and the credit registry, which offer banks the most modern services in this field, are good examples to illustrate the financial infrastructure development in Kosovo”.    

In recent years, the CBK has increased its engagement in the function of protecting the rights of financial service consumers, thus directly serving to the protection of public interest.   

“The CBK, since the beginning of its function, has and still fully supports the development of the financial system; however I would like to emphasize that we are committed to ensuring that the financial institutions’ development takes place in full compliance with the principles of consumer rights protection. In this regard, we are determined to further increase our commitment for protecting the rights of financial services users and requests from banks to carefully consider their legal requirements and policies in order to avoid any unreasonable obstacle that would impede normal interaction between citizens and the banking sector. We are committed and expect that the continuous development of the banking sector will create conditions for easier access and more favorable conditions for citizens and businesses in the banking services. This is in line with the Sustainable Development Objectives, prepared by the United Nations, whereby under the objective of economic growth at global level, the requirement of improving access to financial services for ensuring sustainable and inclusive economic growth is clearly emphasized.     

Also, financial education activities represent a very important part of this commitment, aiming at clearly informing the public on the opportunities that the financial system provides, but also on their rights as financial services users", said CBK Governor Fehmi Mehmeti at the end, and emphasized that the CBK will continue to support all aspects of banking sector development by providing the necessary  financial and regulatory infrastructure.       

In the Panel Discussion  “Financing Growth: Banks for a sustainable economic development of Kosovo”, the CBK Deputy Governor, Sokol Havolli discussed about the possibilities of interconnecting the banking sector with the economy in order to strengthen economic growth.