USAID and NOA introduce new financial product to boost growth of Albania’s footwear and apparel sector

The United States Agency for International Development (USAID) in partnership with the microfinance institution NOA is launching today the new “Footwear & Apparel Loan Project” (FALP) to boost the growth and competitiveness of Albania’s footwear and apparel sector. NOA, a financial institution licensed by the Central Bank of Albania, has been operating since 1998, providing financing solutions to small- and medium-sized enterprises (SMEs), farmers, and families whose access to finance is limited due to geographical, social or administrative barriers. The USAID CATALYZE Engines of Growth (EoG) Activity collaborated with NOA and the business services association Pro-Export Albania to design this innovative financial product to meet the needs of SMEs operating in the leather and textile industry.

This is the first dedicated loan product for the sector and aims to inject EUR 3.5 million through uncollateralized loans with values up to EUR 75.000. Companies seeking such financing will also be supported through technical guidance to ensure the greatest impact for their business.

Currently, 740 enterprises in Albania operate in the textile, clothing, leather, and footwear industry, reflecting a drop of 6% compared to 2020 due to the ongoing impacts of COVID-19 and recent price surges as a result of Russia’s war against Ukraine. According to a recent survey conducted also by the microfinance institution NOA, 66% of the surveyed companies report difficulties in meeting payments on time. The companies identified competing costs as barriers to meeting loan payments, including tax payments (51%), salaries (45%) and suppliers (27%). More than half of the companies noted plans to expand into new markets, which will create new jobs and investments. However, 72% of the companies need additional financing to fulfill their plans for growth. The new financial product is aimed to fill this gap. 

Ms. Mischere Kawas, USAID/Albania Country Director, said: “Today, as we announce the launch of the Footwear & Apparel Loan Project, I am so excited to provide small businesses in this industry with more opportunities not just to grow–but to keep growing, to invent, to flourish, to thrive and then inspire others.”

Ms. Herjola Spahiu, NOA’s Chief Executive Officer said, “The footwear and apparel industry are leading the promotion of the “Made in Albania” products across Western markets, including Italy, Spain, Canada, and the United States. Therefore, it is crucial that the industry has financial products that meet their needs so they can create new added value, increase their production and design capacities, and improve the working standards for their employees, which are primarily women. It is no coincidence that 25 years ago, USAID supported the launch of NOA precisely because of our commitment to promote financing that contributes for improvement of the life quality of Albanian people. We are very happy that this cooperation marks our 25th anniversary, again serving the most underserved, to ensure job creation and financial inclusion.”

Mr. Edvin Prence, Chairman of the Pro-Export Albania Association, said, “First, I would like to thank the management of NOA for interest in our sector "Footwear & Apparel manufacturing", the main supporters of this USAID initiative, without which this initiative could not become reality. This is the first dedicated financial product for the sector since the opening of the free economy in 1991. We are starting to write history today for a sustainable, eco-friendly economy, and increasing the “Made in Albania” exports. Today we are laying the stone of great significance for all businesses in the sector, which counts over 75,000 employees and makes up 40% of Albania’s exports.”

In February, NOA will start accepting loan applications from footwear and apparel businesses. Businesses can use NOA’s loans to fulfill their varied needs, including working capital for raw materials, assets (e.g., equipment, machinery, vehicles, facilities), and modernization of the production processes, including increase automation and energy efficiency, the increase and training of labor force; ISO certifications; access to new markets; product diversification; marketing (digital and traditional); etc. FALP aims to support the sector with dedicated financial advisory and technical assistance through specific trainings with national and international experts to increase their production standards and increase their export potential.

The two-year initiative aims to create a revolving financial instrument that can support the sector in a sustainable and long-term manner after the project ends. This project was made possible through the generous support of the American people through the U.S. Agency for International Development (USAID) under the USAID CATALYZE Engines of Growth project.