The government has agreed with all eleven local banks to ease access of small and medium enterprises (SMEs) to Euro 250 million (Dollar 292.65 million) in loans, backed by Euro 30 million in government guarantees, Prime Minister Edi Rama said on Wednesday.

The credit line will offer interest rates between 2% and 3%, supported by sovereign guarantees ranging from 30% to 70% of the loan amounts, depending on risk levels. It targets agriculture, digitalization, production capacity upgrades, and energy efficiency improvements, Rama said during a press conference.

The Prime Minister informed that he had requested the President of the European Investment Bank, Nadia Calvino, to expand the agreement signed on Tuesday with Intesa Sanpaolo Bank for a credit line to SMEs to other second-tier banks.

Rama assessed that this is an agreement that goes directly to financing SMEs, which are the engine of our economy and which today have an extraordinary potential within their bosom.

The Prime Minister emphasized that the project has become a very serious government support program for all SMEs.

The PM assured that within a very short time after the signing, the program will be implemented. Rama emphasized that the projects financed by this sector should be projects that naturally have a lower risk and that are related to agribusiness, agro-tourism, innovation, and new technologies.

“I strongly believe that a grant fund that will be made available to draft business plans, that is, to help small and medium-sized enterprises to make their applications, will come as an added value in facilitating the relationship between entities and banks,” Rama added.

The head of government made his statement while attending the signing of the new partnership between the state, the banking system, and Albanian entrepreneurship for the national program for financing small and medium-sized enterprises, “Double your Entrepreneurship”.

SMEs represent the backbone of the Albanian economy; they account for around 99% of enterprises, about 75% of investments, 78% of value added, and 82% of employment, a higher share than in the EU, Finance Minister Petrit Malaj said, also present at the event.

The Minister emphasized that, through the “Double Your Entrepreneurship” initiative, the government aims to increase access to finance for SMEs in underfunded sectors by supporting them in increasing technological capacities, in digitalization, or in the area of??energy efficiency.

According to Malaj, this support aims to increase the competitiveness of SMEs and increase their productivity, which will consequently bring about acceleration of economic growth and faster approximation to European Union standards.

The Albanian banking system comprises 11 banks, of which Banka Kombetare Tregtare, owned by Turkish diversified group Calik Holding, held the largest share of assets as of the end of the first quarter, according to central bank data published by the Albanian Banking Association.