Building a Microfinance Network in Albania: Challenges and Opportunities

This paper analyzes the microfinance sector in Albania. It also explores the possibility of establishing a national microfinance association (MFA) in the country.

The paper gives an overview of the macroeconomic environment and microfinance sector in Albania. It states that the growth of microfinance in the country requires new policies and measures related to regulation of the sector, supervision of MFIs, training, relations with donors and future prospects for the sector. The paper profiles the microfinance networks in Albania, namely, Rural Finance Fund and SCA-Jehona.

The paper proposes the creation of a national microfinance network or association serving the entire industry. It identifies opportunities and challenges for development of a national network, and presents a future outlook for the Albanian microfinance sector. Recommendations include:

• Stakeholders should organize a strategy workshop to clarify potential role and objectives of the MFA;
• Functions of the MFA could include awareness building, information dissemination, capacity building, political lobbying, regulation, supervision and refinancing;
• Rules of cooperation should be laid down to foster mutual understanding in defined areas among members of the MFA;
• MFA needs to be formalized to encourage funding and ensure permanent representation.