Along the Balkan Route: Financial inclusion priorities in Montenegro, Kosovo and Croatia

  • AFI delegation in Central Bank of Kosovo
    AFI delegation in Central Bank of Kosovo
Central Bank of Kosovo meets with a delegation from the Alliance for Financial Inclusion in September 2016.

Along the Balkan Route: Financial inclusion priorities in Montenegro, Kosovo and Croatia


Financial inclusion policy is a relevant and pressing issue across the Balkan’s and regulatory institutions from the region are actively engaged in projects to reduce their unbanked. Institutions across the region are also increasingly aware of the need and the value of financial inclusion knowledge exchange and peer learning both within the region and across the globe.

This month a small delegation led by AFI’s Executive Director Alfred Hannig, travelled to the Western Balkans to meet with central banks in three countries, learn about how financial inclusion policy is being approached across the region and explore possibilities of deeper engagement with AFI, including potential membership.  


The AFI delegation’s first stop was Montenegro, a nation with a small economy whose primary income comes from tourists that flock the beautiful Adriatic coast in summer - tourism brings in twice as many visitors as Montenegro’s total population every year. According to the World Bank Findex Report, 40% of Montenegro’s adult population are without access a formal account and only 5% have any kind of formal savings.  

Mr. Hannig was warmly welcomed by the Governor of the Central Bank of Montenegro (CBM), His Excellency Milojica Dakic. Mr. Dakic stressed that financial inclusion is high on the agenda of CBM and affirmed his belief that AFI membership would be beneficial for the country. Montenegro was among the first countries to fully translate the UN Sustainable Development Goals (SDGs) into the 2030 National Sustainable Development Strategy and the Governor was convinced of the strong connection between the SDGs and financial inclusion.

Governor Dakic explained that his institution had two specific priority areas which he felt would benefit from gaining AFI membership - consumer protection and AML/CFT. the Governor also highlighted the cutting edge work Montenegro has done to advance green finance and suggested that this could be an area in which CBM could take a leading role in the Alliance. Finally, CBM offered to partner with AFI in co-organizing a Regional Forum planned for June 2017 in the coastal town of Budva.


Leaving behind Montenegro, the AFI delegation travelled to Pristina, the capital of one of the world’s newest countries, Kosovo. The economy of Kosovo is largely dependent on remittances from the diaspora and international donor assistance which taken together contribute 25% of the country’s GDP. Over 50% of the population is considered unbanked and only 7% have savings in a formal account (Findex). The Central Bank of Kosovo is one of the newest additions to the family of Central Banks, established from scratch right after the independence of the country was proclaimed.

His Excellency, Bedri Hamza, the Governor of the Central Bank of Kosovo (CBK) hosted AFI’s Executive Director at the CBK in Pristina, where the possibility of AFI membership was discussed. Governor Hamza was enthusiastic about the benefits of joining the AFI to further build the capacities of the CBK staff, which he saw as essential for CBK to be able to maintain its independence. “The cost of capacity building is not an expenditure, it is an investment”, said Governor Hamza. Further discussions on CBK becoming a part of the AFI network are planned in the coming year.  


The final stop for the AFI delegation was in Croatia. Croatia has a sophisticated economy and is the most recent member of the European Union. The Croatian population has only a 14% unbanked rate, but formal savings account remains low, with only 27% indicating they have any formal savings (Findex).  

Governor Vujcic and Vice-Governor Bojan Fras of the Croatian National Bank (CNB) hosted the AFI delegation at the CNB headquarters in Zagreb. Vice-Governor Fras recognized the experience of AFI members in developing smart FI policies and expressed his desire to engage more with AFI during the course of 2017, and potentially consider AFI membership in 2018. Governor Vujcic agreed for CNB and AFI to initiate co-operation in regional knowledge sharing on harmonization issues with the countries aspiring for the EU. The CNB leaders also agreed to join AFI’s FinTech platform, make presentation on their experience during AFI’s WG and 2017 GPF, and facilitate AFI’s engagement with the ECB and other EU Central Banks.


Financial inclusion priorities in the Balkans are diverse and substantial, ranging from emerging issues in DFS regulation, including FinTech/RegTech issues, to consumer protection and financial literacy, to cross border remittances, to green finance.  Even in the more developed economies of the region, challenges remain in aligning with EU regulations and establishing a more systematic dialogue with SSBs to facilitate proportionate application of global financial standards based on unique economic conditions. 

The policy leaders in the region are committed to making financial inclusion a key pillar of their national strategies and recognize the value that being a part of the AFI network could bring to their work. With dynamic institutions and a broad range of policy interests and priorities, the countries of the Balkans could represent the next wave of AFI’s growing policy leadership network.