fehmi mehmeti : kosovo ’ s economy in 2021 marked a real growth rate of 10. 5 % speech by mr fehmi mehmeti, governor of the central bank of the republic of kosovo, at the european bank for reconstruction and development ( ebrd ) conference, pristina, 23 march 2022. * * * honorable mr. taylor, head of the ebrd kosovo office honorable representatives of embassies in kosovo honorable representatives of the eu office in kosovo honorable deputy minister honorable mayors distinguished representatives of local and international financial institutions dear participants, it is a special pleasure to welcome you to the central bank of the republic of kosovo and to be part of this ebrd event for the presentation of the transition report for 2021 / 2022. this event demonstrates the commitment and the important contribution that the ebrd has continuously given to support the institutions of kosovo and in general for the economic development of the country. both, around the world and in kosovo, recent years have been quite challenging and characterized by a high degree of uncertainty, for the financial system and the economy of the country. as a result of the adequate regulatory framework as well as high supervisory standards, the pandemic situation found the financial system in kosovo with high levels of capital and liquidity as well as very good quality of assets. also, prudent measures taken by the cbk in cooperation with financial institutions operating in kosovo have been shown to be very effective in maintaining financial stability and minimizing the consequences for the country ’ s economy in general. as a result of these measures, the banking sector managed to maintain a high degree of resilience to the impact of the crisis and to meet very well the challenges and implications of the pandemic, and to play a very important role in the recovery of the economy through continuous lending and providing mitigation measures for borrowers. currently, the non - performing loan rate in the banking sector stands at around 2. 3 %, while the annual loan growth rate stands at 15. 7 %, which indicates that we are talking about a sound banking sector with a very significant contribution to the financing of economic activity. our priority remains for banks to continue to maintain a high degree of stability, so credit risk continues to be the focus of the cbk in 2022, especially focusing on assessing credit risk management practices, the adequacy of provisions for credit losses and overdue credit management. kosovo ’ s economy has marked a very successful recovery

honoured, i am pleased to be here with you today to discuss and hear about a very important topic for our country's economy, and i would like to thank the american chamber of commerce for the invitation and to express my high considerations for businesses and their role in the country's economic development. i believe that the topic of this conference is very good because it comes at a time when the banking sector has made great progress in improving the conditions for sustainable financing of the economy, namely businesses. * * * kosovo's banking sector in recent years has considerably increased its role in financing the economic growth in the country, accelerating the loan growth rate, and significantly reducing loan interest rates. easing the lending standards and reducing the loan interest rates have served as important incentives for increasing loan demand, resulting in an annual loan growth of 11. 6 per cent in october this year. this indicates that access to finance, which has long been reported by businesses as one of the main barriers to their business development, is now undergoing continuous improvement. this can be noticed by the growth in lending to the sectors of the economy which in previous periods had a more limited access to banking financing. according to the latest data of october 2018, the loans granted by the banking sector to businesses are in the amount of eur 1. 7 billion which, compared with the same period of five years ago, has increased by 45 per cent. the lending structure by economic sectors has started to improve compared to the previous periods, although there is room for greater diversification of the loan portfolio in favour of the sectors that have the greatest potential to generate faqe 1 nga 5 economic growth. currently, about 50 per cent of total loans issued to enterprises are represented by loans to the trade sector. during this year, the agricultural sector and the manufacturing sector were among the sectors with the highest increase of loans received. however, the total amount of loans granted to these sectors continues to be low. the share of manufacturing sector in total loans to enterprises in october was 13 per cent, while loans to the agriculture sector accounted for about 4 per cent of total loans. since today's topic is related to the role of the banking sector in the country's economic development, i would like to emphasize the fact that the greatest support to these sectors of the economy, but also to the other sectors with the greatest potential to generate economic growth, is indispensable in order to have a more sustainable economic development. however, we are also aware