Financial Crisis and its Reflection in Business Financing: Evidence from Kosovo

Abstract

The global financial crisis has a negative impact and it’s reflected with a decline of economic development in the world. Its effects were also reflected in the countries of euro zone and economy of Kosovo, in spite of allegations that its effects may only be sporadic. Bank system in Kosovo, which provide only standardized products, has avoided the effect of crisis. This was done based on conservatory policy leaded by commercial banks operating in the country. Such policy caused the restriction of loans for Small and Medium Enterprises (SMEs), those which have more difficulties to receive the loans. So, this causes the declining of investment, turnover, profits and reinvestment. Thus, a general finding is that the financial crisis after all had a negative impact on the real sector of Kosovo economy and its effects will be present also in the future, especially in terms of financing the SMEs.
Keywords: Financial Crisis, Kosovo, SMEs, World Output.