Federal Republic of Germany via German Development Bank (KfW) and the Government of Republic of Kosovo co-finance establishment of the Deposit Insurance Fund of Kosovo
Press Release
Ministry of Finance hosted today the signing ceremony of the Financial Agreement between the Republic of Kosovo and the Federal Republic of Germany amounting to the tune of € 5 million aimed to support the Deposit Insurance Fund of Kosovo.
On behalf of the Government of the Republic of Kosovo, the agreement was signed by Deputy Minister of Finance, Mr. Ramadan Avdiu, on behalf of the Deposit Insurance Fund of Kosovo, agreement was signed by its Managing Director, Mrs. Violeta-Arif Krasniqi, and on behalf of the German Development Bank (KfW), represented by Dr. Silke Paulwitz, KfW Regional Director for Albania and Kosovo and Ms. Ute Rodrian, Director of KfW Regional Office for Albania and Kosovo.
The fund consists of a grant of € 4.5 million for co-funding of the Deposit Insurance Fund and a grant of € 0.5 million for advising services.
Apart from a grant of € 5 million provided by the German Government, the Kosovo Government will provide additional funds for capitalization of the Deposit Insurance Fund.
The Deposit Insurance Fund was established in accordance with the Law on Deposit Insurance System. The purpose of the Deposit Insurance Fund is to protect depositors in Kosovo and to strengthen the banking sector.
This marks an important step in aligning Kosovo’s financial sector with EU standards. From the Deposit Insurance Fund will particularly benefit small depositors and the economy as a whole. The initial capital provided by the German Government via KfW will be an important contribution to the establishment of the Fund.
The German Government via the German Development Bank (KfW), has supported the project since 2007 by providing expert support in drafting the necessary regulatory measures for deposit insurance and support the institutional arrangement of the Deposit Insurance Fund.
In terms of advisory services, the Deposit Insurance Fund will be offered continued support in establishing processes and procedures, training of both management and personnel ensuring the institutional and financial sustainability of the Deposit Insurance Fund.
Commitments of the Government of the Federal Republic of Germany to financial cooperation in the past 12 years exceed the amount of € 210 million and focus on supporting the energy sector, as well as water and financial sector. The financial sector, for which the overall portfolio of the German financial cooperation exceeds € 75 million, is the key area of Kosovar-German financial cooperation.
Cooperation in the financial sector focuses on providing long-term re-financing, among financial institutions, households, investment in small and medium enterprises, investment in energy efficiency, but also in support of policies aimed to prepare the ground for the establishment of the Deposit Insurance Fund of Kosovo.