The Ministry of State for Entrepreneurship and Business Climate has issued the draft law on “The Albanian Development Bank” for public consultation.

The draft law on “The Albanian Development Bank” aims to establish and define the rules for the organization and functioning of a development financial institution, similar to the national promotional banks or institutions operating in the European Union, with the main goal of promoting the economic and social development of the country, through facilitating access to finance for underfinanced sectors of the economy, mainly small and medium-sized enterprises, including microenterprises and start-ups, as well as supporting development projects related to the improvement and modernization of physical and digital infrastructure, with a special focus on green investments.

Promotional banks and financial institutions in the EU are defined as entities that carry out financial activities with a mandate given by a state at the central, regional, or local level to achieve development or promotional objectives.

Among other things, the development banks act as financial intermediaries for the European Investment Bank (EIB), channeling EIB credit lines or guarantee instruments to local economies.

Some of these lines and instruments are also open to Western Balkan countries and their range is further expanded as the integration process progresses.

The main economic justification for the existence of such an institution is based on the fact that operating below potential or market failures can lead to a lack of financing and investment, which, as a result, brings about slower growth than would be economically beneficial or intended. These institutions intervene in those segments that remain underfunded or underserved, aiming for a complementary approach to the financing offered by commercial financial operators. Their activity is exercised by state aid legislation and without causing undue impact on competition.