Studies | 15 February 2012

Indebtedness of micro and small enterprise clients in Kosovo

Following the research on the levels of indebtedness of microcredit clients (with loans of to EUR 10,000) conducted in Kosovo in 2011, the Development Facility of the European Fund for Southeast Europe commissioned a second study to assess the incidence of over-indebtedness of MSE clients (with loans between EUR 10,000 and EUR 50,000) in Kosovo.

The objectives of the study were:

  • to gain an understanding of the level of indebtedness and underlying borrowing patterns of SME clients,
  • to provide recommendations on how to address and prevent over-indebtedness in the country.

The study was conducted between April and October 2012 and comprised the compilation and statistical analysis of credit registry and MIS data from financial institutions. The analysis is based on a sample of 2,200 loan customers of nine financial institutions (five banks and four microfinance institutions), reflecting each institution’s share of the credit market in the two segments. Clients of participating institutions were randomly selected to assure the validity and representativeness of the data. Given the scale of outreach of the participating institutions the results stand for about 82% of the credit market in terms of the number of borrowers, based on credit registry figures. In contrast to the first study, the client samples were selected from the total population of credit users in the respective segments and not only from amongst clients with business loans.

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