Development of Microfinance Institutions (MFIs) in Kosovo

Well functioning microfinance sector can contribute to the creation of the sustainable financial institutions of the country. An improvement in the microfinance institutions (MFIs) seems to have a positive impact in the lives of the people that able to work but is limited to banking service. The role and importance of the microfinance institutions have increased during the last decade. Large numbers of microfinance programs increased significantly in conflict affected environments, and in many cases become successful institutions. Kosovo is a good example, which indicates the role of MFIs in countries emerging from conflict. By the end of the war in Kosovo (1999) brought the emerging necessary needs for capital projects dealing with reconstruction for economic, social and political development. Therefore, financial support from large numbers of international and relief organizations was imperative for the overall situation in Kosovo. Expansion of the microfinance institutions' networks and improvement of their activities are important for the Kosovo financial system. Microfinance sector in Kosovo is well specified and regulated within their constitutional acts. The microfinance institutions’ goal as a development organization is to serve the financial needs of un-served and underserved markets as a means of meeting development objectives. Researching the current situation of MFIs in Kosovo, the aim of this paper is to describe the overall microfinance sector improvement to its establishment, thereby to provide some additional assessment for the studies in the future. It was stated that microfinance in Kosovo has found an adequate environment for development as well network expansion.