IFAD in Albania

IFAD has financed five projects in Albania since 1993, investing a total of US$51.9 million in rural development, irrigation rehabilitation and agriculture in the poorest mountainous areas of the country. IFAD's most recent investment of US$9.2 million in The Mountain to Markets Programme is a package of poverty-reduction measures based on participatory and systematic identification of investment opportunities in poor mountain areas. The goal is to increase the incomes of poor rural people in the northern part of Albania, the most disadvantaged part of the country.

The Programme for Sustainable Development in Rural Mountain Areas supports initiatives to increase household income among rural poor people in mountainous areas. One of the programme's objectives is to support the privatisation of the First Albanian Financial Development Company, a micro finance institution providing credit to smallholders and small and medium enterprises in the rural mountain areas.

IFAD's strategy in Albania

In Albania IFAD invests in programmes and projects that help poor people undertake economically viable activities that will generate the income they need to improve their standard of living.

Although IFAD-funded programmes continue to focus on farming and agri-businesses in Albania, the agricultural sector alone cannot represent the only means of economic advancement for poor people in mountain areas. Substantial levels of public and private investment are required to develop businesses, improve the business investment climate and provide the infrastructure needed to revitalize local economies.
Through its recent investments in the country, particularly in improved access to rural financial services and funding sources, IFAD is working to broaden opportunities for economic growth and increased employment for rural poor people. Experience in project implementation in mountain areas has shown the economic potential in livestock, medical herbs, horticulture, agro-processing and such non-agricultural activities as agro-tourism, wood processing and stone carving. IFAD's on-going direct support for business and small and medium-size enterprises is evolving to promote expanded opportunities.

Progress in the transition process is opening up new avenues for support for commercial and economic development, even in mountain areas. IFAD is exploring those avenues in the interests of rural poor people. IFAD's operations help consolidate the programmatic approach initiated under the Mountain Areas Development Programme, in which the Mountain Areas Development Agency and the First Albanian Financial Development Company (FAF-DC) have major roles.

Innovations to be explored within a private sector framework, and particularly with FAF-DC, include development of new financial instruments such as equity financing, insurance and alternative collateral, and of ways to adjust loan repayment terms and conditions to suit the requirements of poor people in rural areas. The progressive restructuring of FAF-DC into a shareholder company providing a full range of rural financial services is an innovative development that will support economic diversification and growth in mountain areas.

IFAD Country Strategic Opportunities Paper (2005)


Source: IFAD