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Rebuilding Kosovo through microfinance
The Rural Credit of Kosovo (Kreditimi Rural i Kosovës, or KRK) is a microfinance institution supported by SIDI (International Solidarity for Development and Investment) to help small farmers and local entrepreneurs access credit. In 2009, former BNP Paribas employee Patrick du Saint chose to volunteer his time to become one of KRK’s administrators.
You are now retired after working for BNP Paribas. Why did you take on this volunteer mission in microfinance?
It’s true that BNP Paribas was my primary employer as I worked there from 1983 to 2009. During my 27-year career, I held several different management positions and I spent 20 years working abroad including in Spain, Portugal, Hong Kong and Switzerland.
My commitment to microfinance grew out of a combination of factors. In 2000, the Head of Territory in Portugal, Benoit Monsaingeon, was founding “Microfinance Without Borders” (Microfinance Sans Frontières – MFSF). We stayed in touch during this time, and he explained BNP Paribas’s microfinance mission to me during the launch of the MFSF program in 2006. When I retired in 2009, he convinced me to join him in this volunteer activity that by that time was already well developed.
And now you have served as the administrator of KRK in Kosovo for the past three years.
Yes, after retiring from a fulfilling career, I wanted to use my skills and time to benefit others. Microfinance made that possible, and at the same time it corresponded to the values that are important to me.
In addition, as you can tell from my career path, I’ve always been an avid traveller. The position as administrator of KRK in Kosovo offered me the chance to discover a new country while exercising a lighter professional role, even though it’s a long-term commitment at a company. I devote about one month a year to the mission.
What concrete actions do you take to support micro-entrepreneurs in Kosovo?
KRK began as an extension of the agricultural program launched by the United Nations in 2000 and ADIE (Association for the Right to Economic Initiative, a French association that helps disadvantaged people with access to bank loans). This program in favour of agriculture worked so well, it was afterwards transformed into a microfinance bank. SIDI, an investor that supports entrepreneurs’ initiatives through solidarity finance, then purchased a stake in KRK. Thanks to this partnership, KRK has now become one of the four leading microfinance players in Kosovo.
KRK offers small loans to local entrepreneurs. To give you an idea, the average loan amount is around 2,000 euros. A loan for 10,000 euros is treated as a “large account”. These are loans that traditional banks are not ready to issue because they are not profitable enough or are considered too risky. The loans may finance agricultural equipment, seeds and other materials for small farmers in the region. Today, KRK’s activity has expanded and the bank also finances small shop owners, hair stylists, etc. Agriculture now accounts for only 50% of KRK’s activity.
How has KRK’s activity performed?
The situation has improved dramatically since the microfinance crisis in 2009-2010. With 20 branches, including one recently opened in the capital (Pristina), the bank is well anchored in the country and has gained a deep knowledge of its economic fabric. Today, KRK has shown excellent financial results and strong risk management. The default rate on its loans is under 1%.
But microfinance is about more than just financial ratios. The important thing is to work constantly to maintain a balance between economic and ethical considerations. It is particularly important to limit interest rates and respect the CSR commitments of shareholders, especially the SIDI, but also BNP Paribas.
What is your connection to Kosovo?
I’ve always had a taste for international work. And that hasn’t changed. I travel four times a year to Kosovo to assist KRK’s executive board. I always stay for a few days longer to tour the country, which I only knew from media images of the war that we all remember. Kosovo is not your typical tourist destination: it’s one of Europe’s poorest countries. Its international recognition as a country is not fully established, and it still feels fragile, divided and tense. We even had to temporarily close a branch in the north of the country because there was still so much tension. But in spite of that, it is a charming country. I’m even going back this week.
Why do you think microfinance is necessary?
Microfinance seems more essential than ever. Traditional banking is not enough in fragile countries in Kosovo. Banks are not interested in these targets, since they are less profitable and carry more risk. However, in an economy that is still 50% rural, small loans are often the only solution for financing a commercial activity. In KRK’s model, microfinance offers a solution that seems both economically efficient and socially responsible.
Any advice for someone planning to volunteer in microfinance?
Above all, it’s important to know your personal expectations for your volunteer commitment. For me, this responsibility perfectly matched what I wanted for my retirement: a chance to travel, continue discovering new cultures, to maintain a professional activity and to use my skills to benefit an ethical cause.
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