Developing Factoring Service For Small And Medium Enterprises At Kosovo’s Pro Credit Bank

Burhan Reshat Rexhepi ,Burim Isa Berisha ,Labeat Mustafa ,Shpresim Halim Vranovci
Keywords: Economics;Statistics;Business economics ;Economy; ,


After a decade of reforming policy, building and developing the multi-sector market economy, Small and Medium Enterprises (SMEs) in Kosovo have developed strongly and contributed to creating employment, increasing GDP, and raising the nation’s volume of exports. However, SME have found difficulties on the way to development due to lack of management experience and financial resources, and due to uncertainty within the business environment. As a result, SME often faced obstacles during their operations. 


Originated from actual demands of integrating and economic development in Kosovo in general and banking system in particular, to develop new banking service is extremely crucial, especially for Join stock commercial banks that have less competitiveness than State owned commercial Banks. Moreover, factoring consider a financial tool that is met both requirement from commercial Banks and SME. This research seeks to introduce Factoring service as an effective short-term financial tool for SME as well as crucial service for commercial Banks in Kosovo. The first chapter aim at introduction of factoring services including clarifying the conditions for factors developing this service and the second Chapter has taken overview the current situation of worldwide factoring and Kosovoese factoring market to have an outlook for general conditions for developing factoring for Kosovoese factors.


Kosovo’s factoring market is at the first phase in its life cycles, there are a lot of chance for developing this service in Kosovo, especially for pioneers whom launching this services into market. However, PRO CREDIT BANK could not gain the advantage of the first entrance. Even though, PRO CREDIT BANK has advantages in external sources of stable and high growth of Kosovo economy. SME’s high growth rate at Kosovo 3,8% as well as its experience in providing financial service to SME- its targeted customers, PRO CREDIT BANK’s good cooperation with multinational and world organization to gain more capital for credit, factoring at PRO CREDIT BANK is at “zero” points. The main obstacle to limit factoring service at PRO CREDIT BANK blamed for lack of development strategy for factoring service, the human resource management matter, and lack of information about sellers and Buyers. All analysis is mention in details in the third chapter.


In the last chapter- Chapter 4, the author makes some main recommendation for developing factoring service to SMEs at PRO CREDIT BANK:

  • Creating marketing plan: defining targeted customers are SMEs and MMEs group, especially for ones that have a purchase relationship with big and high reputation corporation to limit risk of default payment from Buyers.; domestic factoring is the target products to concentrate on the first phase with their customers based in North of Kosovo; and suggested variety of marketing program to promote this service.
  • Establishing a full time of team member for PRO CREDIT BANK and developing training course about factoring
  • Increase financial capacity for PRO CREDIT BANK to support for financing in factoring service.


Besides, the Author recommend solution for SBK to improve legal framework for factoring as well as enhancing the efficiency of CIC system to supports commercial banks, including PRO CREDIT BANK in developing factoring service.