A report by Riinvest titled “Banking Sector: Facilitator or Barrier?”, funded by the Kosovo Foundation for an Open Society – KFOS (an affiliation of Open Society Institute – OSI), was prepared by Fadil Aliu (project manager), Alban Hashani (senior researcher), Lumir Abdixhiku (senior researcher), Diellza Gashi (researcher), Ilire Mehmeti (researcher), and Shkëlqim Cani (international consultant from the University of Tirana – former Governor of the Central Bank of Albania). The report was published in Fall 2014. The main findings of the report in question, are: i) foreign capital is dominant in 6 out of 8 commercial banks operating in Kosovo, or 89.2% of total assets in this sector are managed by foreign banks; ii) all banks have enhanced their activity, increased deposits, assets, and lending; iii) the coverage of the loans by collateral, as of 2011, was 236.1%, the highest in the region (Southeast Europe – SEE), thus the loans in Kosovo, in general, were paid back more than in any country in the region; iv) the banking sector in Kosovo is mainly concentrated in three banks that own 74% of assets, 74% of deposits, and 71.7%
of loans. Riinvest identifies this as a very high concentration in the banking sector; v) highest
interest rates in SEE (14.1% for individual loans, and 16.65% to business entities – SMEs); vi) the
lowest SME to GDP ratio (28.3%), indicating a very low credit intermediation and weak access to
bank loans by SMEs; vii) highest profit ratio: Return on Equity (ROE) 14.5% versus the average
by 4% in SEE, and Return on Assets (ROA) 1.4% versus 0.3%