Micro, small, and medium enterprises(MSMEs) in Albania are significant contributors to theeconomy. In 2018, according to the Albanian Institute ofStatistics (INSTAT), 99.8 percent of active enterprises wereMSMEs, employing 79.8 percent of the workforce and realizingaround 69 percent of value added. At the same time, the MSMEsector is generally characterized by high informality(especially in agriculture), limited availability ofcollateral, and low levels of financial capability. Limitedaccess to finance, particularly bank credit, poses achallenge for MSMEs in Albania. MSMEs can only reach theirfull potential if they obtain the finance necessary tostart, sustain, and grow their business. Albania’s financialsector ranks at 102nd place out of 141 countries in theWorld Economic Forum 2019 Global Competitiveness Report.Credit to the domestic private sector represents only 33percent of gross domestic product (GDP) compared to above 50percent in regional peers, reflecting very low levels offinancial intermediation. MSMEs – the backbone of theAlbanian economy – face significant constraints in accessingfinance, with 16 percent of small and 34 percent ofmedium-sized enterprises reporting access to finance as amajor constraint in Albania. The overall MSME finance gap inAlbania is estimated at 9 percent of GDP. The Albanianbanking sector is extremely liquid and prevailing interestrates are low; however, Albanian banks are reluctant to lendto MSMEs as they perceive the sector as risky and there is alimited secondary market for movable and immovablecollateral. Improving access to finance for MSMEs in thecountry must be tackled in a holistic and strategic manner,addressing supply, demand, and enabling environment aspects.