Prishtina, 24th January 2010 ( Kosovapress ) 11:15 AM

FINCA Kosovo is a microfinance institution that operates in the financial sector in Kosovo. FINCA has not only achieved its goals, but has served with dedication and precision its mission to serve lowest income entrepreneurs with various financial products so they can build assets and improve their standard of living, said in an interview for Kosovapress, FINCA’s director, Ella Beavers.

Kosovapress: FINCA’s activity, which has been operating in Kosovo for a long time. How much did it achieve its objectives to dominate the market as a microfinance institution?

Beavers: FINCA Kosovo is a microfinance institution that operates in the financial sector of Kosovo. I say it with pride that FINCA has not only achieved its goals, but has served with dedication and precision its mission for which FINCA has started work in Kosovo, it has been a mission and continues to be a simple mission, but very meaningful, and this mission is to serve small entrepreneurs with lower incomes, with various financial products and to help them, in a way so they could collect, create assets, and improve their family lives. FINCA has served and continues to serve its mission, and has almost fully accomplished its mission and its goals and fully commiserates its mission.

It is understandable that in every market there is competition and as they say it, it is good to be the first, and we are colleagues with different financial institutions no matter what they say, we always try to be first, to achieve success, which places FINCA in the ranks as the most advanced financial institution.

Kosovapress: What is the difference between FINCA’s services to other microfinance institutions present in Kosovo?

Beavers: Financial products are limited, because that’s the way financial markets are, as long as you will have creativity and create new products; these products are always limited and are almost similar. That which differentiates or as they say displays FINCA from other financial institutions, and the services that we provide and the form of services, the purpose of these services, the way how we offer these services, the way how we face the clients, and how we select clients for taking them, all these serve or determines some kind of difference between FINCA with other financial institutions.

We always try to find clients who have successful businesses.
FINCA’s mission is more social than private mission or to meet as they say pockets of different shareholders, FINCA had and has social shareholders and social investors, who see that performance indicators indicate on the performance of social aspect. You can ask of these social indicators, even a small child’s smile of our clients who come to FINCA offices, we give a balloon with FINCA`s mark in it and simply their smile has a value for us and we keep a note and market it as a result of FINCA and as an indicator of our success.

Kosovapress: As you mentioned loans, we know that there are many businesses, who complain about the high interest rates of loans of commercial banks in Kosovo, do you think that maybe this makes them come to FINCA for a loan?

Beavers: Each bank or financial institution has its politics on establishing prices of products, politics which is mainly depending on the costs of these institutions. The costs of institutions depend on two factors; the main factors are the incomes or funds, which we take from other investors, funds that are taken from free markets. Our investors are investors who operate in free market, this means that we do not give loans with concessional interest. So when we take these loans and other financial institutions which finance its operations, they must pay to these investors a cost of this loan for which they receive. The second factor that affects the costs of microfinance institutions is the method of distributing these credits.

Banks usually aim or perhaps their business model is expected to wait for the clients to come to them, while FINCA`s mission is to go to the client, to sending our products to clients, to not wait for the client to come to us, then this increases the cost of providing loans. We have credit officer`s who travel in rural areas with the institution vehicles. All these operational costs should be recovered from loan interest that we give, so these two factors affect the interest of the loan. From what I’ve noticed in Kosovo and in many places where I have worked with FINCA and with other microfinance institutions, monthly and annual interest of loans in Kosovo is one of the lowest rates compared to the rest of the region. This means that Kosovo and Kosovo`s financial institutions offer interest rates that are even lower than the average not only inside Balkan countries, but also in other countries in which I have worked in. For example in Azerbaijan, Armenia or Georgia, the average interest rate was 3 to 3.5 percent, while here the average is about 2 percent monthly. I do not consider this as an interest with a high interest rate when considering the rates of investors which are approximately with this rate, so I can say this much confidence that our incomes from operations are not very profitable or what has always been in the media has been as eco, that microfinance or even banks offer very high interest rates, perhaps they are high compared with countries such as America or in Western countries, but we should keep in mind that Kosovo and many other Balkan and Eastern European countries have not yet reached their level of development, as in Western countries.

Kosovapress: How appropriate is FINCA for Kosovo to invest and extend here?

Beavers: As I said our mission is primarily to improve the quality of life and living standards of the population of Kosovo, but at the same time to increase economic welfare of all state, the whole country as an independent country and to understand that one of the key indicators for economic growth is the amount of foreign investment or domestic, during the year.

I think that Kosovo is still as they say, a place not forgotten by investors and I hope that the number and the amount of investments not only internal, but mainly foreign will increase in year 2010 and further in coming years, because I see this myself, I do not need more, but to just get outside of Prishtina, and see the speed of the economic development of Kosovo. This is shown in the number of small and medium businesses that are constantly growing, it is seen in the number and the fast development of construction. All these are indicators that Kosovo is ready to welcome investors, but needs to create legal and special regulatory environment, in order to welcome these investments and foreign investors, they are more likely to invest in places that have legal structure and who allow investment as well protects investors. This is essential, not only to invest, but also as an investor to protect their investment, and I see and what I saw with recent developments that Kosovo is preparing itself to be ready to invite investors not only the legal side, but also economic side.

Kosovapress: FINCA’s activity are also extended in the Serbian community, or is it only for Kosovar`s?

Beavers: FINCA does not discriminate, nor race, nor of origin, nor by gender, nor by age, what FINCA assesses is innovation, work and creativity, if a client or an individual has a good idea, an idea which offers success in the future, FINCA is ready to finance. FINCA has activities throughout Kosovo, it has activities in areas that are predominant with Serb residents, but not only Serbs, we provide our financial services to other non-Albanian communities, Turkish, Rom’s, and Bosnians. Our credit officers are not differentiated on the basis of citizenship or trust. What we value is work, an individual worker benefits from FINCA’s services.

Kosovapress: Let`s talk about loans again. Which level of population gets more loans from FINCA, have you ever encountered major problems for returning these loans, and what measures have you taken in case of delinquencies or not returning loans?

Beavers: It is understood that a credit operation, the goal is to ensure that the loans that are given are to be returned to the institution and it also brings what is called education of clients and education market in Kosovo with the idea and the notion that the loan is a loan and is a responsibility, and is responsible for returning it, because it is not simply a grant or a gift from the institution. This education is a major key to our institution and all other institutions, client’s education to understand that the loan should be returned. We have different ways, not only to educate the client and for example we draft and sign the contract with client we educate the client, but also by our staff we train them on how they must offer products of our institution, how to provide those products, in a way that those products should be returned in the future. We do analysis for all the loans that we offer; we analyze the business and the power of reversion or repayment as we call it in the financial terms of that business.

As far as we have seen to answer the first part of your question, clients come to FINCA with small or medium sized businesses, and this is mainly our intentional market. We go after that market. We know that unemployment in Kosovo is a little high. I would like to emphasize that if we use a metaphor, for example to compare our clients to that of other banks clients, I would say that as a metaphor we are preparatory or a primary school for our clients and we prepare these clients to go to high school. Our goal is to help those businesses however small they are, to grow or make them ready to go, knocking on the doors of banks, because here is a difference between banks and micro-finance, banks have other requirements perhaps a little more rigorous in terms of business or level of sales, or the level of collateral that these businesses offer.

Micro-finance tries not to have rigorous requirements and this brings in the clients, because there are clients who do not have that amount of collateral or that growth of business, or the financial condition. We do this and then prepare them to go to the bank, so I think that there is room for both of them, there is room for banks, there is room for micro-finance. / Interviewed: Albënora Bekteshi/

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