Challenges of Kosovo Micro Businesses

Abstract

The challenges that micro-businesses face during the lending process are numerous. Loans are with high-interest rates. There is a lack of loans with low-interest rates that would stimulate the growth of local businesses. On the one hand, the local business faces various trade barriers such as export in the regional market and EU countries, although Kosovo is a signatory to the CEFTA agreement. On the other hand, there is a lack of institutional support, which not only does not support the stimulation of exports but also within Kosovo makes the local business non-competitive about importers of goods. Interest rates are reduced to 2-3% on an annual basis. Increase the repayment period of loans (long-term loans) for capital investments. Allow the grace period at the beginning of the investment as well as have variable payments based on business income. Reduce bureaucracies when taking loans, reduce the demand for collateral by banks when taking loans. Reduce the business tax rate. Reduce unloyal competition and the informal economy that hurts local business. To stimulate start-up businesses, to support projects especially in the field of informatics. Start-up businesses are not so much supported by banks in Kosovo. Increase women's participation in business, through support, because they make up about 13% of businesses operating in Kosovo. It is intended that the participation of women in business will reach 50%. Make greater support of micro-businesses because these businesses can grow and develop and employ a large number of employees. Microbusinesses in Kosovo make up about 98% of enterprises in Kosovo. Establish a development bank that would support local business and create better facilities and conditions for foreign investors.