At a recent conference organized by the Bank of Albania, the German development bank KfW Entwicklungsbank and the microfinance investment fund European Fund for Southeast Europe (EFSE), panelists emphasized that amidst high growth rates in the region’s microfinance sector, irresponsible finance practices abound. These include non-transparent lending practices, non-transparent pricing and ambiguous advertising.
Mr Ridvan Bode, Minister of Finance of the Republic of Albania, said: “The recent turmoil in the financial markets was to a large extent caused by irresponsible lending practices and limited oversight on the part of the financial regulatory authorities… There is much we can learn from what happened in the region and beyond, and put together safeguards in place to make the lending environment as transparent, and as “failure-proof” as possible. This conference is an important step in that direction.”
By Stefanie Rubin, Research Associate
About the European Fund for Southeast Europe (EFSE):
The European Fund for Southeast Europe (EFSE) aims to foster economic development in the Southeast Europe region by providing financial services to micro and small enterprises, and to private low income households via qualified local financial institutions. EFSE was set up in 2005, with KfW, a German development bank, as the fund initiator and Oppenheim Asset Management S.à r.l. as the fund manager.
About KfW Entwicklungsbank (KfW):
KfW Entwicklungsbank is a state-owned development bank based in Germany. The main avenue used by KfW is to conduct German bilateral cooperation on behalf of the government in pursuit of three goals: to reduce poverty, to make globalization fair and to conserve natural resources.
Additional Resources:
Source Article: EFSE Press Release: “Greater Efforts Needed to Promote Responsible Finance Practices,” http://www.efse.lu/news-events/press-releases/archive/press-releases-2010-03-24.html
MicroCapital Universe: European Fund for Southeast Europe (EFSE): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29
MicroCapital Universe: KfW Entwicklungsbank (KfW): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfW+Entwicklungsbank+%28KfW%29
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