Publication: Microfinance Institutions and Credit Unions in Albania : Regulatory, Supervisory and Market Development Issues
Date
2008-06-17
ISSN
Published
2008-06-17
Author(s)
World Bank
Abstract
The objective of this report is to
present an assessment of the current legal, regulatory, and
supervisory framework in Albania for microfinance, as well
as an assessment of institutions rendering microfinance
services (MFIs), including the Savings and Credit
Associations (SCAs) and credit unions (CUs), to identify
future development priorities. Economic conditions have
improved in Albania in recent years, but a significant
percentage of the population is still considered below the
poverty level. The report lists future development
priorities for the SCAs and MFIs, emphasizing poverty
reduction through microfinancing. Several MFIs, and one CU,
expressed some desire to borrow from the World Bank. The
report finds this promising, as long as it does not crowd
out commercial sources that serve to integrate MFIs, CUs,
and SCAs into the larger financial sector. The growth of
SCAs might be enhanced by further consolidation of smaller
SCAs into larger SCAs. Mergers based on joint objectives and
bounds can expand the geographical coverage and clientele
base, facilitate the increase of cash flows and access to
capital, and achieve economies of scale in view of reducing
fixed costs. Albania also wishes to obtain a banking license
and focus exclusively on the microfinance market. A tax
exemption enables CUs and SCAs to build up capital through
retained earnings. Eliminating their tax exemption would
either reduce their capital, or require that CUs replace the
taxed earnings with other means of capitalization to
maintain the same capital reserves. The report recommends
that the Bank of Albania (BoA) should continue to work with
the CUs on consolidating and strengthening the SCAs.
Citation
“World Bank. 2008. Microfinance Institutions and Credit Unions in Albania : Regulatory, Supervisory and Market Development Issues. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/bcfba802-6a21-54d6-b371-d043a5841467 License: CC BY 3.0 IGO.”