Banks to Extend Their Plans of Suspended Loan Payments, Whereas the Government to Help Citizens in Need

The number of people affected by the Pandemic Coronavirus (COVID-19) continues to increase hence the measures taken must be in concordance with the degree of risk and side effects. We, the singed below organizations of civil society, welcome the actions of the Government of Kosovo in preventing the spread of the virus, believing that Kosovo institutions will take all necessary preventive measures to reduce the effects of this health emergency and not only. We also welcome the efforts of the government and the other relevant institutions of the banking sector for fiscal and financial mitigation measures, in order to facilitate the confrontation of citizens with the pandemic.

Emergency situations like this affect mostly the most vulnerable strata of the population, in particular those with the worst economic situation. Since the early days of restrictions on business activities, citizens have reported dismissals, obligations to take unpaid leave or other consequences that directly affect the economic situation of Kosovo’s citizens. Even those with a more regular income have reported high spending on food and medicine. Regardless of this crisis, also during a normal crisis-free year unlike this, households in Kosovo often face difficulties to pay their debts on time. According to the Kosovo Agency of Statistics (KAS), about half of households cannot afford an unexpected spending of 500 euros. In general, a considerable part of Kosovo’s citizens are already beginning to feel the economic effects of this situation. Similar problems are expected to arise in a significant portion of the private sector, in particular small and medium-sized enterprises.

On the other side, the banking sector in Kosovo is largely stable, mostly due to the behaviours of its creditors. Despite the on-going problems with the rule of law on the one hand and the worsening economic situation on the other, Kosovo citizens continue to pay their loans regularly.

The warnings to suspend credit instalment payments based on specific requirements are a good step, but insufficient considering the situation. Of the nearly 300,000 citizens who have active loans, many are unprepared to quickly follow the relevant procedures for this suspension within such a short period of time. Moreover, due to the informal nature of the functioning of the Kosovo economy, many will find it problematic to prove financial difficulties following the decline in personal or business income.

Given the aforementioned reasons, we invite commercial banks and other financial institutions to increase their social responsibility by taking bolder action to ease the financial burden on Kosovo’s citizens in this difficult time. Specifically, we invite them to consider changing the approach by making credit payments suspended as a general rule, while paying off loans they are able to do so, as well as extending the payment suspension deadline. This in no means implies giving up the profit, but merely postponing the collection of such a profit because of the extraordinary situation and the objective impossibility of a large number of loaners. In order to implement these measures, we demand that the Government of Kosovo, in cooperation with the Central Bank of Kosovo (CBK) as a regulator, being an urgent dialogue with the banking sector in Kosovo to find acceptable solutions for all parties.

On the other hand, we invite the Government of Kosovo, within the framework of the measures taken, to give more attention to citizens in general, but in particular to the citizens in difficult economic situation, whether through food security, medicines and basic services, as well as through other financial and non-financial and financial incentives for them. The aggravating situation we are going through must not be devastating to anyone. Only in this way will Kosovo show that it is a state of everyone without exception, especially in situations of crisis.

Civil society organizations:

Democracy for Development (D4D)
Democracy Plus (D+)
Kosovar Civil Society Foundation (KCSF)
Group for Legal and Political Studies (GLPS)
Kosovo Democratic Institute (KDI)
Institute GAP
Kosovo Law Institute (KLI)
European Policy Institute of Kosovo (EPIK)
Kosovo Institute for Policy Research and Development (KIPRED)
Institute for Development Policy (INDEP)
FOL Movement
Organization for Democracy, Anti-corruption and Dignity, Çohu!