In Face of Global Pandemic, MIGA Bolsters Alpha Bank Albania’s Commitment to Supporting Local Enterprises
WASHINGTON DC, July 1, 2020 – MIGA, a member of the World Bank Group, has issued a guarantee to Alpha Bank A.E. of Greece (ABG) covering up to €47.5 million of its investment in its Albanian subsidiary, Alpha Bank Albania SHA. The MIGA guarantee will cover Alpha Bank Albania’s (ABA) mandatory reserves held with the Central Bank of Albania from the risk of expropriation of funds, and support ABA’s lending operations at a time of significant strain arising from the COVID-19 pandemic. A sizable portion of the lending supported by the MIGA guarantee will be directed at micro-, small-, and medium-sized enterprises (MSMEs), the key drivers of growth and leading sources of jobs in Albania.
The COVID-19 pandemic has affected the Albanian economy deeply, and the Government has forecast that its 2020 growth estimates for the country could be cut in half as a result. MIGA’s guarantee will enhance ABA’s capacity for lending within its risk limits and support the Bank’s ability to continue the supply of credit, thereby helping sustain economic activity, employment, and jobs in the country. An enhanced ability to lend is very important for the Albanian economy, as the country has a low private credit to GDP ratio of 36.5 percent as of December 2019.
“Micro-, small- and medium-sized enterprises (MSMEs) are a key growth enabler and the most important source of employment for Albania,” MIGA Executive Vice President Hiroshi Matano said. “MIGA’s guarantee will significantly bolster ABA’s ability to continue to provide credit to its customers—including MSMEs—at a time of increased stress and uncertainty.”
MIGA’s coverage will support ABG by freeing-up lending capacity under the Group’s risk limits at a critical time for Albania’s economy. MIGA’s capital optimization product is particularly important for enabling ABG to further increase its capital available to support Albania’s economy through continued lending, while complying with the regulations set by Central Bank of Albania.
“Small and medium-sized enterprises represent the backbone of Albania's economy base, with four-fifths of total employment,” Mr. Georgios Papanastasiou, Chief Executive Officer (CEO) of ABA said. “Through our work with MIGA, we will be able to provide financing to more businesses and entrepreneurs and secure greater prosperity for Albanians during this unprecedented pandemic.”
Alpha Bank Albania SHA was founded in 1998 as a 100 percent-owned subsidiary of Alpha Bank A.E. of Greece. In Albania, ABA is the 6th largest bank in terms of assets (€644.8 million or 5.3 percent of total system’s assets), with a network of 33 branches, almost 293,000 customers and 418 employees, as of December 2019. The subsidiary focuses on lending to corporates, MSMEs and individuals, including mortgages and consumer loans, such as car loans and credit cards. The bank is also involved in a limited amount of project finance.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over $55 billion in guarantees across 115 developing countries.
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.
In Washington: Vamsee Krishna Kanchi, (202) 458-9771, firstname.lastname@example.org
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