Pristina, Kosovo, December 15, 2021—In a bid to improve local bankruptcy procedures and boost the efficiency of the debt resolution system in Kosovo, IFC and the Ministry of Justice of the Republic of Kosovo are joining forces to bolster the insolvency framework and practices. This will help strengthen the avenue for resolving nonperforming loans, increasing returns to creditors and preserving viable businesses.
As part of the joint effort, IFC will advise the government of Kosovo as it updates its insolvency laws and regulations. The new rules will aim to help troubled businesses revitalize and failed businesses wrap up efficiently, releasing valuable capital back into the economy. The initiative, known as the Debt Resolution Project, is expected to create a safety net for businesses and investors, improving access to credit, especially for small and medium enterprises.
"As a state institution, we play a crucial role in creating a business environment that is able to retain current investments and attract new ones," said Nita Shala, Kosovo's Deputy Minister of Justice. "We will work with IFC to develop a clear, predictable, stable and fair legal framework, and ensure investor protection through strict law enforcement and a reliable justice system for a more transparent and conducive investment climate."
The project will be implemented in partnership with the government of Switzerland, represented by the Swiss State Secretariat for Economic Affairs SECO.
"At the end of this program, we expect to have an improved business environment, better legal and regulatory insolvency frameworks, and stronger financial and private sectors," said Katrin Ochsenbein, Regional Advisor and Head of Domain Economy and Employment, Embassy of Switzerland/Swiss Cooperation Office Kosovo.
While Kosovo has made significant progress towards changing its market economy, the enabling environment that supports the cycle of business growth and renewal is still challenging due to a large regulatory gap. Improvements in bankruptcy and insolvency procedures is critical to jump-starting investments and making capital available for businesses—both small and large—along with capacity building and public awareness campaigns.
"Given that effective insolvency regimes are key features of a modern market economy, our goal is to foster insolvency mechanisms in Kosovo, while promoting out-of-court settlements and expedited restructuring procedures," said Ary Naïm, IFC's Regional Manager for Central and Southeast Europe. "This will help spur private sector development in Kosovo, an important source of jobs and innovation, stimulating economic growth across the country."
Kosovo became a member and shareholder of IFC in 2009. IFC's advisory services in Kosovo aim to improve the investment climate and insolvency practice, support private sector companies, and attract private sector participation in the development of infrastructure projects.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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About SECO
The State Secretariat for Economic Affairs (SECO) is the Swiss Confederation's competence center for all issues related to economic policy, including economic development and cooperation. SECO has supported and funded economic development programs and projects in Kosovo since 1998. For more information, please visit: https://www.fdfa.admin.ch/countries/kosovo/en/home.html
For information about SECO in Kosovo, visit: https://www.fdfa.admin.ch/countries/kosovo/en/home.html
For information about the Kosovo Ministry of Justice, visit: https://md.rks-gov.net/
For information about the Swiss Embassy in Kosovo, visit: https://www.eda.admin.ch/pristina
