ALBANIAN SAVINGS AND CREDIT UNION (ASCU)

Swiss Cooperation Office Albania
Swiss Agency for Development and Cooperation (SDC)
ALBANIAN SAVINGS AND CREDIT UNION (ASCU)
Sector
Private Sector Development
Duration of the Current Phase
01.12.2003-31.12.2006
Swiss Contribution
• Phase I: CHF 3’400’000.–
• Phase II: CHF 2’194’000.–
• Phase III: CHF 45’000.–
Partner
• Albanian Savings & Credit Union (ASCU)
• Finances for Economic and Social Development
(FIDES)
Contact
Zana Konini
Executive Director
Rruga “Ismail Qemali”, P. 32
Tirana
Tel: +355 4 251 911
Fax: +355 4 241 971
E-mail: ascunion@icc-al.org
Area of Intervention
• Rural Areas of Albania
1. Context
• The project has contributed to covering the
demand for financial services of peasant
families in order to increase their life
standards and to develop the rural areas since
1993. The credits offered by this project are
very popular: the number of the families, who
wanted to make small but important
investments, in order to improve their life
situation, was growing.
• Formerly, credits or informal loans from
relatives were necessary in order to make this
possible. The number of the customers
increased ten times within three years.
Savings are, however, only hesitatingly
entrusted to the ASCU (former Rural Finance
Fund). The reasons for this hesitation are: on
one hand there are the very bad experiences
of 1997, when almost every Albanian family
lost high sums due to the collapse of the
pyramid schemes, and on the other hand the
possibilities of the Albanian families to save
money are still small. Many families live from
the money sent by their relatives living abroad
(that implies that savings are usually
deposited abroad).
Swiss Cooperation Office
Rruga Ibrahim Rugova 3/1 Phone +355 42 240 102 www.swiss-cooperation.admin.ch
1019 Tirana, Albania Fax +355 42 234 889 tirana@eda.admin.ch

Swiss Cooperation Office Albania
Swiss Agency for Development and Cooperation (SDC)
• The high demand for credits on one
hand and the rather modest savings
deposits on the other hand, led to a
cash flow problem at the ASCU. This
problem can affect the project negatively,
because if the customers do not
receive a credit due to lack of liquidity
they surely will never deposit their
saving funds in the same bank.
2. Objectives and expected results
• The objectives of the project are to
overcome poverty and to assist entrepreneurs
in rural areas to progress and
strengthen economic activities by promoting
private sector development for
credit applicants without direct and
affordable access to credits offered by
the banking sector. The development
goal is to increase farm and off-farm
investment and saving services.
3. Activities
• The SDC supports the procurement of a
commercial credit in favour of the ASCU, in
order to overcome the cash flow problem. The
commercial credits have, however, a higher
interest rate than e.g. IDA credits; these costs
would either have been charged to the credit
applicant or have been covered by the ASCU.
Because of financial reasons both possibilities
make no sense. Therefore, the SDC will cover
the interest rate difference between the
commercial credit and an IDA credit as well as
the common application fee of 1% of the credit
amount in Albania and the risk of loss of
exchange.
• The SDC also focuses on the technical support
to the set up of the ASCU as well as
further special inputs, e.g. the financial support
of an annual audit by “Sofirom
Lausanne”, a company which is specialised in
micro credit establishments.
Swiss Cooperation Office
Rruga Ibrahim Rugova 3/1 Phone +355 42 240 102 www.swiss-cooperation.admin.ch
1019 Tirana, Albania Fax +355 42 234 889 tirana@eda.admin.ch