High interest rates are blocking private business

Safet Gërxhaliu, Chairman of Kosovo Chamber of Commerce, said for Kosovapress that one of the challenges that local business community is facing with, particularly the private sector, without doubt remain the high interest rates of bank. According to him, high interest rates remain a problem, which every day is being alerted and which is disabling the businesses and economic development in general.

"If you analyze the reports of various international institutions, one of the challenges that the local business community is facing with, in particular the private sector are without doubt the high interest rates of bank. It is true that when negotiating with banks, they have their own reasons, in the absence of legal infrastructure, or in a dysfunction of the courts and the judiciary in general.

However, from the economic aspect it is something that really is not a function of economic development of Kosovo and it is not a function of strengthening of the private sector, in particular of manufacturer one. If you see the structure and the companies that benefit more from commercial banks currently in Kosovo, almost that dominant are those that deal with trade, "said Gërxhaliu.

Gërxhaliu further said that if we have a dual approach, where the government wants to raise the budget from the border and banks which finance and support only large companies that deal with trade, this is truly a warning signal, which directs the economic processes in Kosovo, in order that Kosovar society to become a society dependent on imports, rather than in a society which will be ready to produce and create new jobs and generate employment and economic stability.

Thus, according to Gërxhaliu, we should work more in this regard and in government levels, as the mere fact that 95 percent of private sector or private companies are in a function of banks, because they work to perform the obligations to banks, shows that this is a burden thing which is impossible to create opportunities to expand the capacity. Gërxhaliu stressed that this is indeed an unenviable position and it is the moral obligation, firstly for BQK (Central Bank of Kosovo) and institutions to do more in this regard.

While Gani Gërguri, governor of the Central Bank of Kosovo (BQK), says that interest rates remain rather high, but with a downward trend, and in this regard, according to him, there are positive movements. He also claimed that BQK would work further with the possibilities that has on improving the business environment in order to reduce further the interest rates.