Financial inclusion increases, the integrity of the financial system increases, the network of financial institutions and digital services expands

The Central Bank of the Republic of Kosovo (CBK), in accordance with the fourth goal of the Strategic Plan (2024-2028) which focuses on access to finance and financial inclusion as well as best practices in the provision of services by financial institutions, has continued its commitment in accordance with its legal objectives and plans, in compliance with legislation and other regulatory acts, which have increased the integrity of the financial system and have enabled the growth and expansion of access to finance throughout the country, with special emphasis on municipalities inhabited by communities.

The offices of licensed financial institutions in the country’s financial sector in 2024 compared to 2023 have increased by 40 units as disclosed in the table.

Regarding the most important effects of the aforementioned regulation and the measures taken according to the CBK plan, from 1 January 2024 until now, about 430 thousand pieces of 500 euro banknotes have been removed from circulation, worth 215 million euros, and other activities have been undertaken that have combatted counterfeit money by enabling the supply of money to the economy, as well as other activities in implementation of the legal framework in force regarding the legal functioning of financial institutions, which have significantly strengthened the integrity of the financial sector.

Regarding access to finance in the municipalities in the north of the country, by the end of 2023, the number of financial institutions licensed to operate in the four northern municipalities of the country has almost tripled, as a result of the measures of the CBK plan to support the expansion of access to finance and joint activities with the sector. Financial education has also been the focus of these commitments with positive effects.

While until August 2023 the total number of financial institution offices in the north of the country was 17, of which 4 were bank offices (2 of which at border points), with current data, this total number has reached 46 institutions (an increase of 29 institutions), of which 12 are bank offices, tripling the banking presence in those areas of the country, including local and international banks.

From the latest data, we present the current number of bank offices, non-bank and micro-finance financial institutions, as well as insurance companies.

The continuous increase in the use of the Interbank Payment System (KIPS) reflects the advancement of infrastructure and the increase in financial circulation in the country, the inclusion of various payment instruments and actors, but also the continuous increase in trust in electronic payment systems.

In 2024, through KIPS, the number of transactions increased by 1.8 million or 9.5%, while the value of transactions increased by about 3.6 billion euros or 16.3%. In 2024, about 21 million transactions were processed with a total value of about 25.4 billion euros, which is equivalent to about 2.4 times the Gross Domestic Product.

In addition to the advancement of the use of payment services in the banking sector, there is a continuous effort to expand access to financial services in the country, where the number of ATMs and the number of POS terminals increased by 8.4% and 21.4% respectively compared to the previous year.

At the end of 2024, 2.6 million customer accounts were reported, which include current accounts, savings accounts, term deposit accounts and electronic money accounts for individuals and businesses. Compared to 2023, an increase of 61,166 accounts or 2.4% is evident. A significant increase is evident in electronic money accounts, which in 2024 reached 79,706 accounts, marking an increase of 34,049 or 74.6% compared to 2023.

In addition to the increase in financial inclusion and the use of various payment instruments, a continuous increase is also observed in the number of cards and their use, in accordance with the recommendations of the National Payments Council chaired by the CBK.

At the end of 2024, the number of customer cards reached approximately 1.7 million cards, which include debit cards, credit cards, delayed debit cards for individuals and businesses, as well as payment cards with electronic money function. Compared to the end of 2023, the total number of customer cards increased by 71,660 or 4.4%.

In 2024, compared to 2023, the number of card transactions reached around 43 million, marking an increase of 10.8 million or 33.8%.

In addition to card payments, with the growth of electronic money services and institutions, there has been a sharp increase in the number of electronic money payments. In 2024, around 2.2 million electronic money payment transactions were reported, marking an increase of 568,309 or 35% compared to 2023.

While the CBK appreciates the cooperation with state institutions in implementing its legal mandate, and appreciates the commitment of the financial sector in order to expand access to finance, it remains committed to further advancing the legal, regulatory and infrastructural (technical) framework in expanding access to finance, financial inclusion, competitiveness and consumer protection, through legal initiatives and investments in infrastructure towards reducing cash and increasing the use of electronic payment instruments.