IOM targets irregular migration push factors through support to private sector

In the framework of the project “Support to Micro, Small and Medium Enterprises in Kosovo” (MSME Grants), funded by the European Union Office in Kosovo* and the Ministry of Trade & Industry, IOM recently awarded nearly 3 million euros to local businesses with the purpose to improve their productivity, competitiveness, export capability, innovation and, hence, ultimately foster Kosovo’s overall economic growth.

The MSME Grants project is a response to the difficulties experienced by enterprises in Kosovo in obtaining funding for development from usual sources of finance, such as banks and microfinance organizations.  The grant scheme comprised of two separate lots: one for micro enterprises with an award ceiling up to €25,000 and another for small and medium enterprises for up to €200,000.  In both cases,
mandatory and minimum financial contribution were required of applicants in the amount of 15% and 25% respectively. 

As a result of the grant scheme, 36 enterprises were awarded through the programme following a highly competitive grant competition, during which 784 project proposals were received from interested local enterprises.

Reducing imports, promoting exports

One of the enterprises awarded, Pure Power, is now the first company in Kosovo to export air filters for various models of vehicles. 

The owner and CEO of Pure Power, Adil Bajraktari, first gained experience with filters while working in Iraq.  Upon returning to Kosovo, he realized there was a market gap he could fill.

Through the MSME Grants project, Pure Power obtained top of the line equipment to launch new production lines making three additional types of filters. Increased demand for Pure Power filters, both internally in Kosovo as well as internationally, will allow the firm to expand its workforce by 40% in the upcoming months. With expanded production, Pure Power is also now a supplier of Baldwin Filters, a global leader in the industry, which supplies to BMW among others.

Diaspora returning home 

Three years ago, Kosovo native Etida Zeka returned from the United States with her husband, Alex Butler, to open the first craft brewery and restaurant in Kosovo.  “In the United States, there is tremendous competition whereas in Kosovo we are the only people brewing,” the couple stated at their warehouse brewery in Graçanicë/Gračanica. 

With the financial support from the MSME Grants programme, Sabaja Brewery was able to significantly expand its production capacity facilitating its first exports into the Croatian market.  In the coming months, Sabaja Brewery plans to fulfil orders from distributors and restaurants in Albania, Macedonia, and Germany.  With increasing demand, the company will hire new administrative and distribution employees.

“All the opportunity was in Kosovo.  We realized there was a demand for something new, and we could introduce them to something that did not exist here, and acquaint Kosovars with a whole new category of products that never existed in Kosovo,” concluded Alex.

Improving policies to enable growth

Beyond the disbursement of funds, through the MSME Grants project, IOM has conducted an in-depth baseline study of all 36 supported enterprises to identify their additional needs and overall constraints.

“High unemployment and the lack of opportunity – particularly for young people – is the major push factor behind irregular migration throughout the Western Balkans,” stated Alessia Schiavon, programme manager for the MSME Grants at IOM Mission in Kosovo. “Small businesses are the drivers behind employment and economic growth, and we need to improve the environment for their enterprises to flourish.”

IOM will complement the information collected from the awarded enterprises with data from consultations with other relevant stakeholders, including diaspora associations, the banking sector, and partner institutions.

“The findings of this study and the experiences of the MSME Grants programme will provide useful evidence for the broad improvement of government policy and normative frameworks targeting MSME development in Kosovo,” Ms. Schiavon added.