This chapter assesses policy performance across 13 dimensions key to SME growth and competitiveness as part of the SME Policy Index 2026 assessment cycle. For each dimension, scores are benchmarked against the 2022 assessment to track progress over time, situated within the regional distribution of results and contextualised relative to economy’s own performance profile across dimensions. Results are disaggregated by sub-dimension and thematic block, with comparisons drawn to regional averages throughout. The analytical sections identify recent achievements and persistent gaps underpinning score changes, while implementation reviews for each sub-dimension document key developments recorded during the assessment period against recommendations issued in the previous cycle. The chapter is intended as a practical reference for policymakers, offering a structured overview of areas where measurable progress has been achieved and areas where challenges remain. It is to be read in conjunction with the cluster section of the economy profile, which sets out forward-looking recommendations to support continued reform efforts.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Kosovo
Abstract
1.1.1. Overview of Kosovo’s performance on Dimension 1
Kosovo received an overall score of 3.31 for Dimension 1 (Figure 1.1), marking a marginal increase from the previous assessment cycle (3.22). This places Kosovo below the regional average of 3.72 and sixth among the Western Balkan and Türkiye (WBT) economies. Moreover, this stagnation has positioned Dimension 1 as a mid-performing area for Kosovo, underscoring the need for renewed policy and programmatic efforts to strengthen entrepreneurial skills, attitudes and knowledge in the education system and the labour market alike.
The slight improvement observed was driven entirely by improvement in the implementation of support to women entrepreneurs, as all other areas of performance either stagnated or slightly weakened. It is important to note that revisions to this cycle’s methodology place a greater weight on monitoring and evaluation, still the weakest area across both sub-dimensions in Kosovo, which means that marginal progress in other areas is less visible in the overall score.
1.1.2. Sub-dimension 1.1: Entrepreneurial learning
Performance in this sub-dimension stagnated at 3.14 in 2026, reflecting broadly unchanged performance across all three thematic blocks.
In particular, the absence of substantive reforms in planning and design since 2022 has limited Kosovo’s progress in this area. At the system level, co-ordination arrangements remain weak, with no formal multi‑stakeholder partnership in place to steer entrepreneurial learning. Consequently, collaboration between public authorities, the private sector and non-governmental actors remains largely unstructured, extending mainly to a limited number of memoranda of understanding between the Ministry of Education, Science, Technology and Innovation and the Chamber of Commerce, which focus primarily on dual vocational education and training (VET) rather than entrepreneurial learning. As institutionalised co‑operation continues to take shape, the government’s capacity to translate strategic objectives into coherent, system-wide implementation remains constrained.
Within the education system, entrepreneurship is addressed through a cross-curricular approach across pre-university education; however, this approach is not fully aligned with the European Union’s (EU) Entrepreneurship Competence Framework (EntreComp), as entrepreneurship is treated largely implicitly through broader transversal competences rather than as a distinct and clearly articulated competence. In addition, the absence of dedicated guidance and systematic teacher training on delivering entrepreneurship in a cross-curricular manner continues to leave educators insufficiently equipped to integrate entrepreneurial learning effectively in classroom practice (Table 1.1).
Implementation of entrepreneurial learning has similarly seen little progress, with the provision of practical entrepreneurial experiences still relatively uneven across all levels of education. For most students, exposure to entrepreneurship continues to rely on classroom-based activities, simulations or short-term initiatives rather than sustained engagement with real business environments. While initiatives such as “practice enterprises” provide some opportunities at upper secondary level, their reach remains limited compared to other WBT economies, where programmes such as Junior Achievement are more widely embedded across schools and student cohorts.
Conversely, there have been some advancements in expanding work-based learning through the development of dual VET. Although dual VET does not constitute entrepreneurial learning per se, it has broadened students’ exposure to real workplace settings and supported the development of practical, job-relevant skills. While dual education had not yet been implemented in the previous assessment cycle, by the 2025/2026 school year, a total of sixteen education profiles had been developed, with fourteen currently implemented across 32 vocational schools in 17 municipalities. Many of these profiles are aligned with high-demand sectors, such as renewable energy and energy efficiency, ICT and food and beverage production. Private sector engagement has also increased, both through the provision of company-based training placements and active participation in consortia supported under a dedicated innovation grant scheme to promote and implement dual education.
Monitoring and evaluation remain the weakest aspect of the sub-dimension. Graduate tracking is carried out sporadically and mainly within higher education institutions, where universities conduct independent surveys that are not harmonised or aggregated at system level. Tracking for VET students was planned through a project (funded by the EU and implemented with LuxDev) but is not yet operational. Where data are collected, they tend to be superficial, focusing only on employment status and duration without exploring key dimensions such as sector of employment, relevance of training or perceived usefulness of acquired skills.
1.1.3. Sub-dimension 1.2: Women’s entrepreneurship
Kosovo scored 3.57 in this sub-dimension, up from 3.36 in 2022. This improvement was driven primarily by the continued expansion of programme-level support, while progress was partly offset by weaker performance in planning and design following the lapse of key strategic frameworks.
In particular, the expiry of the Programme for Gender Equality 2020-2024 has left the Reform Agenda 2024-2027 as the sole policy document guiding support to women entrepreneurs. Other key strategies with potential relevance instead focus primarily on women’s labour market participation, framing the issue mainly in social or employment terms rather than positioning entrepreneurship as a driver of innovation, competitiveness and business growth. This narrower and more fragmented coverage marks a step back compared to the previous assessment cycle and weakens the overall strategic direction of policy in this area. In addition, no progress has been observed in establishing a formally structured policy partnership with a mandate to co-ordinate women’s entrepreneurship initiatives. As a result, the activities of key stakeholders – including the Ministry of Industry, Entrepreneurship and Trade; the Ministry of Education, Science, Technology and Innovation; and the Agency for Gender Equality – remain largely uncoordinated, limiting opportunities to build synergies and maximise impact.
Numerous initiatives and programmes targeting women entrepreneurs support implementation. Government support is most visible through the Kosovo Credit Guarantee Fund’s “Women in Business” Window (Box 1.1), which provides both financial and non-financial assistance. Complementing this, a variety of actors (e.g. non-governmental organisations, international partners, private sector representatives) offer non-financial support such as training, mentoring and networking, but it remains fragmented, with no centralised portal to improve knowledge and/or the visibility of such assistance. Despite these efforts, the reach and impact of support measures remain limited. Structural barriers, particularly related to access to finance, continue to constrain women entrepreneurs, who often face greater difficulties in securing bank financing due to factors such as lower rates of business registration, limited collateral and weaker financial track records.
Launched in 2023, the Kosovo Credit Guarantee’s “Women in Business” Window is a dedicated scheme designed to support women-led small and medium-sized enterprises (SMEs). By providing guarantees that reduce banks’ perceived risk, the initiative aims to improve access to finance and enable women entrepreneurs to secure the capital needed to start and grow their businesses. Under this window, guarantees cover up to 70% of the loan principal, compared to 50% under the “standard scheme”.
Although the scheme has only been operational for a few years, it has already been adapted to better meet the needs of women-led businesses. For example, the maximum loan amount increased from EUR 50 000 in 2023 to EUR 250 000 in 2024, while loan maturities were extended from 84 months to 120 months. Early results show strong uptake: between 2023 and 2024, the number of beneficiaries more than doubled (from 71 SMEs to 158), and the total loan volume rose from EUR 1.9 million to EUR 4.6 million.
A distinctive feature of this window is its combination of financial and non-financial support. In addition to the guarantee, participants benefit from capacity building (aimed at enhancing financial literacy and encouraging business formalisation) along with networking and mentoring opportunities.
This initiative illustrates how targeted financial instruments, combined with complementary non-financial support, can improve access to finance for women-led SMEs that might otherwise be excluded. Its design provides a policy-relevant model for the Western Balkans and Türkiye region, demonstrating how tailored guarantees and accompanying support can encourage entrepreneurship among women.
Note: For a broader analysis of the Kosovo Credit Guarantee Fund, please refer to Cluster 1.
Monitoring and evaluation of women’s entrepreneurship in Kosovo show some positive elements, yet the ability to assess real impact remains limited. Reporting mechanisms are in place through the mid-term and final evaluations of the Programme for Gender Equality and the annual reports of the Credit Guarantee Fund, which document activities such as training and awareness-raising, as well as the number of women entrepreneurs and women-owned/led SMEs benefiting from financial support (Kosovo Agency for Gender Equality, 2024[4]). However, these reports primarily capture outputs rather than outcomes, with limited evidence on impact indicators such as participant satisfaction, entrepreneurial performance improvements or longer term effects on business growth and sustainability.
Despite these improvements in reporting, performance in this thematic block has stagnated due to the increased weight assigned in the scoring framework to gender-disaggregated data and impact assessment. Indeed, these gaps undermine the ability to design targeted interventions and evaluate programme effectiveness. Recent efforts by the Central Bank and the Business Registration Agency, supported by the European Bank for Reconstruction and Development, to strengthen data on women-owned and co-owned businesses represent a step forward toward establishing a comprehensive gender-disaggregated dataset (World Bank, 2025[5]). However, until such a system is fully operational, the evidence base for policy evaluation and impact assessment will remain incomplete (Table 1.2).
1.2.1. Overview of Kosovo’s performance on Dimension 2
Kosovo scored 2.57 on Dimension 2 (Figure 1.2), which is an increase from 2.30 in the previous cycle. It is below the regional average of 2.97, which also dropped from an overall score of 3.03. Although Kosovo improved, as in previous cycles, this remains one of the economy’s weakest areas, underscoring the need for more targeted policy action.
Since 2022, Kosovo’s score reflects progress in strategic planning focused on improving bankruptcy procedures and post-insolvency frameworks. While design and implementation have improved on average across sub-dimensions, monitoring and evaluation remain stagnant, highlighting persistent weaknesses in policy follow-through and effectiveness assessment.
1.2.2. Sub-dimension 2.1: Preventive measures
Kosovo scored 1.94 on Sub-dimension 2.1 on preventive measures, down from 2.20 in 2022. Overall planning and design remained stable, but progress on targeted policy action is limited, and monitoring and evaluation, which were weighted more heavily in this cycle, are absent.
Kosovo’s Strategy for Industrial Development and Business Support 2030 does not include explicit objectives or measures on insolvency prevention. Preventive support is addressed only indirectly through advisory services embedded in general access-to-finance programmes delivered by institutions such as the Kosovo Investment and Enterprise Support Agency (KIESA), the Chamber of Commerce, and development partners, including the European Bank for Reconstruction and Development (EBRD)1. These services mainly focus on providing information on guarantees, grants, and general business advisory support to optimise operations, rather than structured insolvency prevention. Awareness raising and targeted outreach on preventive measures are largely absent.
Kosovo still lacks a fully digital early warning system that would enable early detection of financial distress among small and medium-sized enterprises (SMEs) and tailored support (see Table 1.3). Preventive restructuring is also not possible under the Insolvency Law, aside from the option to submit a pre-packaged reorganisation plan. However, this option is not supported by SME-specific guidance and requires debtors to secure creditor approval before initiating insolvency proceedings, making it difficult to apply in practice.
Lastly, there is no systematic data collection on the use of pre-packaged reorganisation plans. However, uptake is likely low, as this procedure lacks an automatic stay to support negotiations for debtors. This would pose an important challenge for SMEs facing constrained resources. In this way, the continued absence of monitoring and evaluation since the 2022 OECD assessment limits the ability to design needs-based bankruptcy prevention policies.
1.2.3. Sub-dimension 2.2: Survival and bankruptcy procedures
Kosovo scored 3.04 on Sub-dimension 2.2 on survival and bankruptcy procedures, up from 2.54 in 2022. The increase reflects the strengthening of the design and implementation of streamlined insolvency procedures, though systematic monitoring and evaluation remain lacking.
Kosovo’s legal framework provides an expedited insolvency procedure for SME debt reorganisation2. This makes Kosovo, along with North Macedonia, the only Western Balkan and Türkiye (WBT) economies that offer a targeted SME insolvency option. However, fully out-of-court restructuring is not foreseen by law. While the government has begun promoting such arrangements in co-operation with the International Finance Corporation (IFC, 2021[6]), the absence of a legal framework limits their enforceability and offers insufficient protection for both debtors and creditors, reducing their practical value for SMEs.
Recent reforms include the 2024 amendments to the Law on Bankruptcy, which align it more closely with the EU acquis3. A key change allows a single creditor, rather than the previously required two, to initiate involuntary proceedings for claims exceeding EUR 30 000. This is expected to increase the number of bankruptcy filings, which, in turn, could place greater pressure on the system to expedite procedures.
Efficiency gains have followed the establishment of the Commercial Court in 2022, improving the speed and predictability of insolvency proceedings. Although average case duration and time to discharge are not officially reported, statutory timelines are relatively short4. Available data suggest potential bottlenecks if procedures are not further streamlined: of 18 insolvency cases received in 2022, 7 remained unresolved by December 2025 (see Figure 1.3). For SMEs, such delays can undermine business survival prospects and increase restructuring costs.
Note: Data as of October 2025.
Source: Commercial Court of Kosovo (2025[7]).
Overall, monitoring and evaluation are still limited. The Commercial Court does not yet collect consolidated performance data on insolvency cases, preventing benchmarking against other economies. Stronger digitalisation and systematic data collection would improve information flows and support regular evaluation of procedural effectiveness (see Table 1.4).
1.2.4. Sub-dimension 2.3: Promoting second chance
Kosovo scored 1.80 on Sub-dimension 2.3 on promoting second chance for SMEs, up from 1.50 in 2022. The increase reflects the existence of qualified advisers to support the future implementation of a second-chance programme, despite continued delays in policy planning and design. No government-led monitoring or evaluation mechanisms are yet operational.
Second-chance policies remain largely absent from Kosovo’s business support framework. Existing economic and civil restrictions, intended to protect creditors, can place undue burdens on debtors, limiting opportunities for a fresh start and reinforcing cultural stigma around business failure (see Table 1.5). Key gaps include the lack of a legal distinction between fraudulent and honest bankruptcies.
Note: KIESA: Kosovo Investment and Enterprise Support Agency.
Sources: 1. (EBRD, 2022[8]); 2. (World Bank, 2024[9]).
Addressing these gaps could enable Kosovo to leverage the strengths of existing framework, such as the protection of new financing for debtors. This provision is particularly valuable for SMEs, enabling them to cover administrative costs and maintain operations during proceedings, supporting business continuity and investment rather than forcing firms to deplete internal resources merely to navigate insolvency.
Without a formal strategic framework, however, establishing systematic monitoring and evaluation will remain difficult, limiting the ability to assess SME needs, guide policy adaptation, and ensure effective design and delivery of recovery measures.
1.3.1. Overview of Kosovo’s performance on Dimension 3
Kosovo scored 3.84 on Dimension 3 (Figure 1.4), a moderate improvement over its score of 3.69 in 2022. In the context of a generalised regional decline, Kosovo has nevertheless improved its relative position and now performs above the regional average of 3.77. In addition, Dimension 3 continues to perform above the economy’s average score of 3.26 across the other policy dimensions.
Kosovo’s slightly improved performance is supported by updated legal and policy frameworks for private-sector development, a strong commitment to regulatory simplification, and a solid legal basis for evidence-based, stakeholder-inclusive policymaking. However, execution remains uneven across policy objectives and instruments, while weak monitoring and quality-control mechanisms limit accountability and contribute to persistent implementation gaps.
1.3.2. Sub-dimension 3.1: Institutional framework
Kosovo’s score of 3.70 in this sub-dimension reflects a moderate upward shift compared to 3.50 in 2022. Improvements are observed across all areas, driven primarily by the adoption of a coherent strategic framework, the consolidation of delivery structures, and increased budget for enterprise support. However, structural constraints in implementation capacity, inter-institutional co-ordination, and outcome-oriented monitoring continue to limit further performance gains and constrain advancement to the next performance level (a score of 4) in the SME Policy Index assessment.
Since the previous assessment, Kosovo has reconfigured its small and medium-sized enterprise (SME) policy architecture by adopting a new strategic framework for private-sector development. The Strategy for Industrial Development and Business Support 2030, adopted in April 2023, constitutes Kosovo’s first standalone industrial policy and establishes medium-term objectives within the overarching framework of Kosovo’s Development Strategy (Table 1.6). Although SMEs are not explicitly defined as a separate target group, the “business support” pillar is de facto SME-oriented, reflecting the economy’s structure, in which SMEs account for 99.8% of all firms. The strategy is operationalised through a first Action Plan for 2023-2025, structured around ten priority actions selected for their strategic relevance, with an independent interim evaluation scheduled for the end of 2025 to assess both progress and the continued relevance of the strategic objectives. Meanwhile, a successor Action Plan for the period 2026-2028 is currently under preparation.
Policy leadership and oversight rest with the Ministry of Industry, Entrepreneurship and Trade (MIET), while implementation is primarily channelled through the Kosovo Investment and Enterprise Support Agency (KIESA), which co-ordinates the delivery of enterprise support measures. Under the Law on Sustainable Investments, KIESA is being transformed into the Agency for Support to Enterprises and Innovation, with SME support functions separated from investment promotion activities (Official Gazette of Kosovo, 2024[10]). The latter are envisaged to be transferred to a newly established Agency for Investments and Export, whose operationalisation is experiencing delays. Despite this institutional reconfiguration, KIESA’s financial envelope has continued to expand since the adoption of the industrial policy and is projected to increase from EUR 18 million in 2025 to EUR 22 million by 2027. In 2024, the agency supported over 300 SMEs with a total allocation of EUR 7.3 million, exclusively through grant schemes, primarily to strengthen production capacity and address the trade balance deficit. However, persistent constraints in financing, administrative and implementation capacity at the ministerial level continue to limit delivery performance and higher execution rates (European Commission, 2025[11]).
Monitoring arrangements combine annual implementation reporting by MIET, in co-operation with the Strategic Planning Office, with the planned independent interim evaluation of the strategy. Current monitoring data indicate a 38% implementation rate for 2024, with 28% of planned activities not implemented and significant variation across strategic objectives (MIET, 2024[12]). While these mechanisms provide a basic framework for accountability, the system remains largely focused on activity tracking, with limited capacity for systematic outcome assessment, impact evaluation and policy learning, constraining the ability to adjust instruments and priorities on the basis of evidence.
1.3.3. Sub-dimension 3.2: Legislative simplification and regulatory impact assessment
Kosovo’s score for this sub-dimension has increased considerably from 3.50 to 3.90 over this assessment cycle, reflecting a stronger political commitment to regulatory simplification and administrative burden reduction. However, while the legal framework for regulatory impact assessment (RIA) has been updated, implementation remains uneven and of limited analytical quality.
Since the previous assessment cycle, Kosovo has significantly strengthened the policy architecture for business environment simplification through the adoption of the Administrative Burden Prevention and Reduction Programme 2022-2027 in September 2022. The programme establishes a structured and preventive approach to regulatory simplification, embedding administrative burden considerations directly into the legislative process. Within this framework, the Government’s Legal Office is mandated to review all draft legal acts prior to approval, explicitly assessing their implications for administrative burdens. This institutional anchoring is complemented by the continued use of concept documents as Kosovo’s ex ante RIA instrument, positioning early-stage policy analysis as a core mechanism for preventive simplification. The recalibration of the programme in January 2025, through the adoption of an updated programme and action plan for the 2025-2028 period, further signals policy continuity and a learning-oriented approach to regulatory reform.
Initial implementation evidence points to both progress and structural constraints. According to the first implementation report (2022-2023), approximately 57% of newly approved primary legislation introduced new administrative burdens, underscoring the importance of preventive tools such as concept documents. At the same time, the absence of disaggregated data on business-related legislation constrains the ability to assess the programme’s concrete impact on firms. The impact assessment framework itself remains formally advanced but weakly embedded in practice. The Guidelines and Manual for Drafting Concept Documents (2018) remain the core reference framework, although they are not yet aligned with the new Government Rules of Procedure (RoP) adopted in 2024 (Office of the Prime Minister, 2018[13]; Government of Kosovo, 2024[14]). Kosovo’s model, which requires ex ante analysis before drafting begins, remains unique in the region. Yet, its practical effectiveness is undermined by inconsistent application: concept documents are rarely updated to reflect changes introduced during drafting, parliamentary procedures or consultations, and only 50% of government-approved draft laws in 2023 were accompanied by a concept document.
Historically weak quality control has allowed draft laws, not preceded by concept documents, to proceed through the approval process, thereby limiting the disciplining function of the framework (OECD, 2022[15]). The adoption of the new RoP in 2024 represents an important institutional adjustment by strengthening the role of the Government Coordinating Secretariat (GCS) in central quality assurance (Table 1.7). While the GCS is now formally empowered to return proposals that do not meet assessment requirements, the extent to which this authority will be used to systematically enforce compliance, by requiring updates to concept documents at later stages of the policy cycle, remains uncertain. More broadly, the absence of outcome-oriented indicators and disaggregated monitoring data continues to limit the capacity to evaluate the effects of regulatory simplification on businesses, constraining learning and improving the system.
1.3.4. Sub-dimension 3.3: Public-private consultations
Kosovo’s score of 4.13 in this sub-dimension indicates a marginal decline from the 4.19 recorded in 2022, pointing to a period of relative performance stagnation. While the legal framework has been successfully updated, effective implementation remains constrained by limited stakeholder engagement and by enduring weaknesses in monitoring and evaluation mechanisms.
Since its adoption in 2024, the regulatory framework for public-private consultations (PPCs) in Kosovo has been governed by the new RoP, which repealed the previous regulation. Under Article 46, public consultations apply to draft concept documents, draft general legal acts and draft strategic documents, while specific exceptions remain foreseen. The RoP also set procedural standards, including minimum notice periods of 7 calendar days for public meetings and at least 15 working days for written consultations, extendable to 30 days for particularly complex or high-impact acts (Government of Kosovo, 2024[14]). While minimum deadlines and advance-notice requirements are generally respected, the quality of consultations remains uneven, and reporting obligations are not consistently met.
Implementation data for 2024 point to a high volume of consultations but limited stakeholder engagement and uneven follow-up. Between January and December 2024, government institutions published 268 documents for consultation, yet only 53 received comments directly through the online platform. Of the 251 consultations closed during the year, final consultation reports were published for 144 documents (57%), while 107 (43%) closed without a report. Notably, the share of draft laws subject to public consultation declined compared to earlier years: whereas 98% of draft laws were consulted in 2020, more than 20% were not opened to public consultation in 2024 (OECD, 2025[16]; 2022[15]).
The Office of Good Governance within the Office of the Prime Minister acts as the central co-ordinating and monitoring body for PPCs, overseeing compliance with consultation standards and preparing the annual public consultation report (Table 1.8). The dedicated e-consultation platform remains operational and serves as a single access point for consultations at the central level, supporting transparency and stakeholder participation throughout the policy and legislative cycle.
1.4.1. Overview of Kosovo’s performance on Dimension 4
Kosovo scored 3.64 on Dimension 4 (Figure 1.5), broadly confirming the solid performance level recorded in 2022 (3.68). Although the score falls slightly below the regional average of 3.75, Dimension 4 remains one of the most advanced policy areas within Kosovo’s overall assessment profile.
Kosovo’s sustained performance in this dimension reflects incremental improvements in the strategic framework and operational measures supporting the expansion of digitised government services, while data availability and performance management remain underdeveloped. Despite exhibiting one of the most advanced company registration frameworks in the region, weaknesses in monitoring systems have constrained further improvements in the rating.
1.4.2. Sub-dimension 4.1: Digital government services for SMEs
Kosovo’s score on Sub-dimension 4.1 on digital government services increased slightly from 3.26 in 2022 to 3.41 in 2026, indicating moderate progress over the assessment period. This improvement is mainly driven by the strengthening of strategic frameworks and the continued expansion of online public services through central platforms. While the range of available e-services has grown and institutional responsibilities are more clearly defined, digital government services remain only partially tailored to business needs, and mechanisms to monitor the use of services by small and medium-sized enterprises (SMEs) and to assess service quality remain underdeveloped.
Policy planning for digital government in Kosovo has strengthened considerably in recent years (Table 1.9). The Kosovo Digital Agenda 2030 represents a major step forward by introducing a dedicated objective on e‑government development and aligning government priorities with the EU Digital Compass and related EU frameworks. This is complemented by the E-government Strategy 2023-2027, which sets out core principles such as digital-by-default, the once-only principle, interoperability and a whole-of-government approach. The strategy aligns with the Public Administration Reform Strategy 2022-2027, which frames digitalisation as a means to improve efficiency and reduce administrative costs for both institutions and users. However, the strategic framework does not clearly distinguish between services for citizens and businesses, nor does it define specific objectives or performance indicators for SMEs, beyond a general indicator on cost savings for users that has yet to be operationalised. Institutional responsibility for digital government is shared between the Office of the Prime Minister, the Ministry of Economy and the Agency for Information Society, which provides a formal co-ordination structure but also requires sustained inter-institutional co-operation to ensure coherent delivery.
Implementation of digital government services is centred on the eKosova portal, the primary econonmy-wide platform for accessing public services online. Around 320 services have been digitalised through eKosova by 2025, including 87 new services added during the year, and the central government currently offers around 658 services in total, with a target of digitising 50% of services by 2027 and all key public services by 2030. In parallel, Kosovo operates separate platforms for business registration and for tax-related services, enabling firms to complete selected administrative procedures online. Nevertheless, only around 10% of public services are currently fully available online, as many institutions still lack the necessary infrastructure, interoperable systems and digital skills. Recent initiatives aim to deepen implementation. Under the EU4Innovation e-ID project, the Ministry of Economy has launched promotion and awareness campaigns targeting businesses to encourage the uptake of electronic identification and digital seals. The upcoming launch of the e-Wallet app is expected to further strengthen e-identification infrastructure, though its impact will depend on effective economy-wide rollout beyond the current pilot phase. In addition, the Digital Kosova / Digital Governance Strengthening project (approximately EUR 18.5 million) seeks to further develop the eKosova platform by introducing integrated service centres, life-event-based services and more SME-oriented digital solutions.
Monitoring and evaluation of digital government services remain underdeveloped. While strategic documents include broad objectives and targets for service digitalisation, there is little public evidence of systematic monitoring of service usage among businesses or of structured feedback mechanisms to assess SME satisfaction and reduce administrative burden. Performance indicators specific to business services are limited, and reporting focuses mainly on the number of services digitised rather than on their uptake or impact.
1.4.3. Sub-dimension 4.2: Company registration
Kosovo scored 4.35 in this sub-dimension, indicating a consistent, strong performance despite a decline from 4.80 in the previous cycle, driven primarily by persisting limited monitoring arrangements and more demanding assessment standards. In relative terms, Kosovo maintains a leading regional position in this policy area, supported by well-established planning and effective implementation.
Kosovo continues to operate a centralised digital one-stop-shop for business registration through the Kosovo Business Registration Agency (KBRA). The system supports end-to-end electronic submission of registration applications and institutional co-ordination with municipal registration officers. Since 2022, geographical coverage has been expanded through the establishment of five additional municipal registration centres (Mamusha, Junik, Zvečan, Zubin Potok and Leposaviq). Online business registration is available for all legal forms, with all registration-related fees payable electronically. KBRA targets a statutory processing time of two working days for standard registrations, although the effective time to commence operations remains much longer due to dependencies outside the registration system. Unlike most regional peers, Kosovo maintains free registration for limited liability companies and does not require minimum paid-in capital, reducing formal entry costs for new firms.
As of mid-2024, Kosovo was finalising the technical architecture for electronic identification, electronic signatures and certification services, with planned integration into the eKosova platform and future alignment with EU and regional interoperability frameworks (Table 1.10). A pilot phase for the official issuance of electronic identities, limited to public administration officials, was launched in November 2025, with economy-wide roll-out to citizens expected following its completion.
Monitoring focuses on operational performance indicators, such as processing times, error rates and helpdesk utilisation, which are periodically reviewed. While these metrics support basic accountability and service-delivery oversight, they do not yet extend to the systematic evaluation of user experience or SME-specific outcomes.
1.4.4. Sub-dimension 4.3: Business licensing
Kosovo scored 3.63 in this sub-dimension on business licensing, slightly below the 3.83 recorded in 2022, largely reflecting methodological updates. While a solid regulatory and institutional framework remains in place and business perceptions of licensing accessibility and administrative burden have even improved, progress in simplifying procedures and reducing the overall number of requirements has fallen short of expectations.
The licensing and permitting framework in Kosovo remains largely unchanged, continuing to be governed by the 2013 Law on the Permit and Licence System, although closer alignment with the 2017 Law on General Administrative Procedures would be beneficial. The launch of the Administrative Burden Prevention and Reduction Programme 2022-2027 marked a shift towards a more structured approach to administrative simplification and service delivery, including in the area of permits and licences. At the start of the programme, Kosovo recorded approximately 480 permits and licences, with an initial policy objective to simplify at least 20% of them by 2023, as first set out in the Economic Reform Programme (ERP) 2022-2024. This target was subsequently assessed by the European Commission as overly ambitious, given existing institutional capacities, and was reformulated in the ERP 2024-2026 into a more realistic objective of simplifying 60 permits by 2026. While quantitative targets continue to have not been fully achieved yet, the documented review of legislation and service-level simplifications suggests partial progress under the programme.
Despite uneven progress in reform, business perceptions of licensing procedures have improved, with Kosovo recording one of the lowest shares of firms in the region reporting that licences are an obstacle to growth. Institutionally, oversight and co-ordination of licensing processes are ensured through the Central Registry of Permits and Licences, an inter-institutional body tasked with system governance. In parallel, the Government’s Legal Office has developed a centralised e-licence portal, now operational through the eKosova platform, intended to serve as a single entry point for licences and related administrative services. Procedures are expected to become even less burdensome following the economy-wide roll-out of the electronic identification system, which is currently in the pilot phase (Table 1.10). However, the proportion of permits and licences that are fully available and accessible through the portal remains limited.
1.4.5. Sub-dimension 4.4: Tax compliance procedures for SMEs
While Kosovo maintains a relatively low statutory corporate income tax rate (10% flat rate), businesses report an overall heavy compliance burden due to administrative and procedural complexity. Limited access to formal equity markets and investor reluctance, partly due to a lack of tax incentives for equity investments, restricts SMEs’ ability to raise capital. Addressing these issues requires targeted tax policy reforms to reduce administrative burdens, improve liquidity support, and incentivise equity investment, while encouraging formalisation and fair competition.
In August 2024, Law No. 08/L-142 amended personal income tax rates with three progressive brackets: 0% on annual income up to EUR 3 000; 8% on annual income from EUR 3 000.01 to EUR 5 400; and 10% on annual income above EUR 5 400 (Assembly of Kosovo, 2023[17]). The change is beneficial to small self-employed workers who used to pay 4-8% but are now exempt, and encourages micro and small business formalisation (e.g. freelancers and small shop owners with modest turnover). Another important development is the increase in the minimum wage from EUR 170 to EUR 350 per month in 2024, and further to EUR 425 in 2025, although it remains the lowest in the region. For SMEs with low-skilled staff, this represents a sharp increase in payroll costs (and corresponding social security contributions, which remained unchanged at 5% for employees and 5% for employers).
The standard value-added tax (VAT) rate remains 18%, and the 8% reduced rate is still applicable to, among other goods and services, the supply of electricity, water, basic foods, textbooks and medical supplies. While Kosovo has not implemented the International VAT/GST Guidelines (value added tax/goods and services tax), it does levy VAT on cross-border digital services. The 2024 Law on Administration of Tax Procedures mandates that VAT refund claims be reviewed within 30 days, a procedural improvement from the average 60 days it took before the legal change (PWC, 2025[18]).
The 2024 Law on Administration of Tax Procedures also enhanced digital data sharing (including with banks) and limited cash transactions to EUR 300 per transaction to tackle informality. Kosovo has been working on further simplifying tax filing and payment procedures (Table 1.11), including the expansion of e‑filing and e-payment systems led by the Kosovo Tax Administration (TAK) and supported through the World Bank’s Enhancing the Quality and Scope of Taxpayer Registration project (World Bank, 2022[19]). In this context, since the introduction of mandatory e‑filing, e‑payment and a new taxpayer portal in 2022, the TAK has further expanded its portfolio of electronic services, now offering close to 60 e-services and introducing additional functionalities such as chatbot support, online tax account management tools and enhanced electronic notification systems.
1.5.1. Overview of Kosovo’s performance on Dimension 5a
Kosovo received an overall score of 4.07 on Dimension 5a, which remained more or less stable compared to its score of 4.06 in the 2022 assessment. Kosovo’s performance is equal to the Western Balkans and Türkiye (WBT) regional average of 4.07, positioning it among the stronger and more stable performers in this dimension (Figure 1.6). Dimension 5a remains one of Kosovo’s stronger areas, outperforming most other dimensions and reflecting sustained policy attention to business support provision.
The limited change in score since 2022 does not indicate regression, but rather incremental progress alongside persistent implementation constraints. While planning and strategic frameworks have continued to improve, implementation remains the main bottleneck across both sub-dimensions, limiting the translation of strategic objectives into fully operational business support services.
1.5.2. Sub-dimension 5a.1: Business support services provided by the government
Kosovo scored 4.07 on Sub-dimension 5a.1, relatively stable from 4.01 in 2022 (Figure 1.6). This overall stability masks diverging trends across thematic blocks, with gains in planning and design and monitoring and evaluation counterbalanced by a slight weakening in implementation, underscoring persistent challenges in translating strategic commitments into fully operational government-provided business support services (BSS).
Planning and design arrangements for government-provided BSS have increased under the Strategy for Industrial Development and Business Support 2030, which continues to serve as the central framework for small and medium-sized enterprise (SME) upgrading, competitiveness and structural transformation. The strategy is accompanied by an action plan with defined activities, timelines and budgets, offering clearer implementation pathways than in previous assessment cycles. Institutional arrangements are more coherent, with the Ministry of Industry, Entrepreneurship and Trade and the Kosovo Investment and Enterprise Support Agency (KIESA) continuing to serve as the primary actors responsible for programme design, co-financing schemes and outreach. Co-ordination remains predominantly internal to these institutions, yet implementation has expanded in scope, particularly through the scaling of grant schemes for digitalisation, product certification, machinery upgrading, creative industries and innovation. The introduction of differentiated co-financing levels, ranging from 50% to 100% across schemes, has increased accessibility for micro and small firms and reflects greater alignment between the strategic framework and operational delivery. The Industrial Policy framework allocated significant budgetary resources5 to SME-related measures, with strong demand observed for KIESA-administered grant schemes. The Machinery and Production Technology Grant Scheme provides a concrete illustration of this strategic and operational alignment (Box 1.2).
Despite these advances, progress has not been uniform. Implementation remains at an early stage, as only a limited share of planned actions are reported to be completed to date; the majority are ongoing or have yet to be initiated (Kosovo Ministry of Industry, Entrepreneurship and Trade, 2024[20]). This is partly due to the early phase of the rollout of the strategy and partly to absorption challenges among beneficiary SMEs. Kosovo has not yet institutionalised systematic training needs assessments or a regular SME demand analysis beyond stakeholder consultations, limiting the government’s ability to calibrate BSS to evolving enterprise needs. While several support measures have scaled rapidly, the absence of recurring, data-driven needs diagnostics constrains the degree to which BSS design is fully demand-responsive, in line with the implementation gaps identified under the SME Policy Index’s 2022 recommendations (Table 1.12).
Monitoring and evaluation arrangements have strengthened at the procedural level, with more regular reporting on beneficiaries, budget execution and scheme implementation. However, monitoring and evaluation arrangements remain largely activity-based. Reporting focuses on the number of businesses supported and execution of grant budgets, with limited outcome-level assessments of firm-level performance improvements. Independent evaluation mechanisms are not yet in place, and adjustments to programme design are typically incremental, based on administrative reviews rather than structured performance evidence. These gaps reflect the broader need to strengthen the results orientation of the BSS system as Kosovo advances into later stages of Industrial Policy 2030 implementation. Then the challenge will be to complement grant-based instruments with more structured, capability-building services targeting growth-oriented and export-ready firms.
Launched as a core pillar of Kosovo’s industrial support framework, the Machinery and Production Technology Grant Scheme was established to address long-standing productivity constraints among domestic manufacturers, including outdated equipment, low automation levels and limited capacity to meet export-grade production standards. Its primary objective is to enable firms to scale output, increase production efficiency and strengthen competitiveness by co-financing the purchase of advanced processing machinery (Kosovo Ministry of Industry, Entrepreneurship and Trade, 2023[21]), directly supporting the priorities of Kosovo’s Industrial Policy 2030 on capability upgrading and modernising manufacturing.
The scheme is implemented by the Kosovo Investment and Enterprise Support Agency and is the most financially substantial public support instrument currently operating in Kosovo’s small and medium-sized enterprise landscape. With a budget envelope of EUR 4.5 million, it has supported 167 micro, small and medium enterprises across priority industrial sectors, providing co-financing for the acquisition of equipment and production line development. Early indications suggest that participating firms report improvements in production volume, product standardisation and readiness to pursue certification for external markets (KIESA, 2024[22]).
Execution performance has been strong, with strong use of available funding and sustained demand across consecutive funding rounds (KIESA, 2024[22]), signaling a structural shift in investment appetite and a more capability-oriented growth model. As implementation continues, the Machinery Scheme is emerging as a scalable, results-driven mechanism for enterprise upgrading, with the potential to anchor broader industrial transformation and gradually shift Kosovo toward higher value manufacturing activity.
Sources: Kosovo Ministry of Industry, Entrepreneurship and Trade (2023[21]; 2024[20]); KIESA (2024[22]).
1.5.3. Sub-dimension 5a.2: Government initiatives to stimulate private business support services
Kosovo’s score on Sub-dimension 5a.2 stands at 4.07 in 2026, reflecting a broad stagnation compared to 4.11 in 2022 (Figure 1.6). This marginal change reflects weaker performance in implementation and monitoring and evaluation, which have offset continued strengths in planning and design. While financial incentives for private sector upgrading have expanded significantly, the structural mechanisms needed to stimulate a more competitive, diverse and quality-assured private BSS market have progressed more modestly.
Planning arrangements for stimulating private BSS provision have modestly improved, reflecting clearer recognition of private providers and co-financing instruments under the Industrial Development and Business Support Strategy 2030 and its Action Plan. The policy framework for stimulating private BSS provision remains anchored in the Strategy for Industrial Development and Business Support 2030, which foresees the use of co‑financing instruments to support SME upgrading through privately delivered services. Planning arrangements are relatively strong, with clear eligibility rules and defined support areas, including digitalisation, product certification, innovation, creative industries and machinery upgrading. While the Industrial Policy Action Plan foresees a limited voucher-type instrument for digital transformation (Kosovo Ministry of Industry, Entrepreneurship and Trade, 2023[21]), it remains narrow in scope, sector-specific and administratively driven, and does not yet constitute an economy-wide mechanism for stimulating a competitive and diversified private BSS market.
Implementation effectiveness has weakened slightly, as increased financial intensity has not been matched by progress in delivery mechanisms or market structuring. A central area of implementation activity has been the increased intensity of public cost-sharing, with support levels now reaching up to full coverage for selected privately delivered services, particularly in areas such as product certification, ICT, digitalisation, innovation, creative industries and artisan support, alongside continued co-financing for machinery upgrading. The introduction of higher support intensities, particularly the expansion to 100% co-financing for ICT and certification schemes, has reduced entry barriers for micro-enterprises and strengthened SME uptake. However, the design of these instruments continues to place the emphasis on subsidising private providers indirectly rather than creating a structured advisory market in which SMEs can independently select from accredited or quality-assured consultants. At the same time, information access has improved primarily through public directories, media outreach and institutional communication channels, yet the absence of a dedicated online platform to consolidate the list of private BSS providers limits transparency and makes it more difficult for SMEs to navigate the available services. This shortcoming mirrors one of the core recommendations from 2022 assessment, which stressed the need for a centralised portal to reduce fragmentation and improve uptake.
Monitoring and evaluation arrangements remain largely procedural and output-focused, contributing to the stagnation in the score for this thematic block. Quality assurance mechanisms for private BSS delivery remain procedural rather than systemic, governed by requirements set out in Administrative Instruction 01/2018, but without a broader certification, accreditation or quality-control framework. While certain donor-supported programmes (e.g. through Business Consultants Council Kosovo) operate their own internal accreditation systems, these are not integrated into economy-wide policy structures, and Kosovo has not moved toward establishing its own formal accreditation or competency-based evaluation mechanism, another area highlighted in the previous assessment (Table 1.13). As a result, quality control focuses primarily on compliance checks, documentation review and annual audits rather than on assessing service outcomes or performance improvements at firm level. Monitoring relies on grant-specific committees, audits and administrative reporting, with limited use of systematic SME feedback, satisfaction surveys or outcome-level performance indicators. Persistent demand‑side constraints, particularly SMEs’ limited documentation and application readiness, continue to affect access to co-financed services, despite generous support intensities.
Note: KIESA: Kosovo Investment and Enterprise Support Agency.
1.6.1. Overview of Kosovo’s performance on Dimension 5b
Kosovo scored 4.16 on Dimension 5b (Figure 1.7), an improvement over its score of 3.86 in the previous cycle. This places Kosovo above the Western Balkans and Türkiye (WBT) average of 4.05 and among the top three performers in the region for this dimension. As a result, Dimension 5b has become one of Kosovo’s higher-scoring policy areas relative to other dimensions, reflecting tangible advances in the functioning and oversight of the public procurement system.
The improvement since 2022 is driven primarily by strong gains in implementation, alongside moderate progress in monitoring and evaluation, while performance in planning and design has weakened slightly over the same period. The evolution of scoring indicates that, following a decline in the previous reporting period, Kosovo has recorded clear gains in the current assessment cycle, enabling it to converge toward and slightly exceed the regional average. While part of the variation in scoring outcomes can be attributed to methodological revisions, the overall upward trend mainly reflects concrete improvements in implementation practices and institutional oversight.
1.6.2. Developments since 2022
The public procurement market in Kosovo has grown steadily, reaching 9.31% of gross domestic product in 2024, up from 6.50% in 2022. The share of negotiated procedures without prior publication decreased significantly to 5.71% by value in 2024, excluding follow-on contracts and contract extensions without a new tender, from 14.05% in 2022, indicating progress toward more transparent procurement. The share of contracts awarded based on the best price-quality ratio has increased significantly, reaching 13.10% by value in 2024, up from 5.66% in 2022. However, competition appears to be declining. The average number of bids per tender was 3.5 in 2024, down from 4.08 in 2022 (Public Procurement Regulatory Commission, 2022-2024[23]). In 25.1% of cases in 2023, only one bid was received for tenders above EUR 10 000 (OECD, 2025[24]). Small and medium-sized enterprises (SMEs) continue to be strongly represented, securing 95% of contracts by number and 90% by value in 2024, the same as in 2022 (Public Procurement Regulatory Commission, 2025[25]).
Kosovo’s performance in planning and design recorded a slight deterioration, declining from 3.94 in 2022 to 3.81 in 2026, reflecting a broadly stable strategic and legal framework alongside persistent gaps in policy design, including delays in adopting key legislative instruments. The Public Finance Management Strategy of Kosovo 2022-2026 (“PFM Strategy 2022-2026”) does not define specific goals and measures to support SME participation in public procurement (Ministry of Finance, 2022[26]). The Public Procurement Law (PPL) is broadly aligned with the 2014 EU Directives; however, several essential instruments and tools are still lacking. Certain provisions that remain non-aligned with the EU acquis, such as restrictions on the share of subcontracting or lack of self-declaration, are of particular relevance to SMEs. Although its adoption is envisaged in the strategic framework, the new PPL has been postponed on numerous occasions (Table 1.14).
As the core instrument of transparency and e-procurement, the Portal of Public Procurement continues to play a vital role in the procurement process. The portal remains the central point of transparency of procedures and implementation of electronic procurement (Public Procurement Regulatory Commission, 2026[27]). Legal protection for economic operators is provided by the Procurement Review Body, in accordance with the PPL. However, no information is available on the average or median decision-making times, and the agency remains constrained by understaffing. Furthermore, concerns remain regarding the independence, effectiveness and competence of the review system (OECD, 2025[24]).
Kosovo’s performance in implementation substantially improved, increasing from 4.00 in 2022 to 4.63 in 2026, reflecting strengthened support mechanisms and more effective application of procurement tools, despite remaining gaps in the structure and regularity of training for economic operators and SMEs. The Public Procurement Regulatory Commission (PPRC) has continued to support contracting authorities and economic operators, including SMEs, with an emphasis on practical implementation tools and tailored training programmes. Considerable efforts have been made to promote the use of non-price award criteria, including the publication of the Handbook on Using the MEAT (economically most advantageous tender) Award Criterion in 2023, which is reflected in an increased share of its application. Training activities are available for economic operators, but they are not provided in a structured or regular manner. There is also a need to better tailor training to the specific needs of SMEs within procurement processes. The private sector actively participates in broad consultations on the development of strategic and legal frameworks. Nevertheless, further improvement is needed in stakeholder engagement during the development of more targeted policy instruments, such as training curricula and implementation guidelines.
Kosovo’s performance in monitoring and evaluation has seen a modest improvement, from 3.40 in 2022 to 3.56 in 2026, reflecting strengthened control and analytical functions. Data on public procurement procedures are regularly collected and analysed. However, data on the share of SMEs, the use of sustainable criteria, and the proportion of public contracts paid on time are not available in the annual statistical reports. Significant efforts have also been made to strengthen the monitoring, control and analytical functions of the procurement system, thereby enhancing oversight and promoting data-driven improvements (Box 1.3). While the PPRC collects general data on obstacles faced by economic operators across various activities, it provides no analytical overview specifically addressing the challenges SMEs encounter in accessing public procurement procedures.
Monitoring, control and analytical activities serve as key mechanisms for ensuring transparency, efficiency and fair competition in public procurement systems. These functions are particularly important for supporting the participation of economic operators, especially SMEs, by identifying barriers, evaluating compliance and promoting evidence-based policy adjustments.
In Kosovo, the PFM Strategy 2022-2026 includes Activity 4: Introduction of risk-based monitoring. In line with this objective, the PPRC has made significant efforts to strengthen contract management and monitoring mechanisms, and a new risk-based monitoring methodology was launched in January 2024. This methodology aims to increase the effectiveness of monitoring by going beyond mere compliance checks and placing greater emphasis on systemic risks and performance outcomes. To support these efforts, the Division of Analysis and Statistics became operational in 2023, marking a key institutional development. Key performance indicators for the system were defined, and data analysis began accordingly. The insights derived from this analysis have been presented in published analytical reports, contributing to improved evidence-based decision making and policy refinement. It is expected that these activities will contribute to greater regularity in procurement procedures.
Sources: OECD (2025[24]) and Public Procurement Regulatory Commission (2026[28]).
1.7.1. Overview of Kosovo’s performance on Dimension 6
Kosovo scored 3.00 on Dimension 66 (Figure 1.9), a performance broadly stable with the previous cycle (3.06),7 and only slightly below the regional average of 3.21. Overall, Dimension 6 represents a moderate performance area for the economy, suggesting scope to further strengthen small and medium-sized enterprises’ (SMEs) access to finance.
Kosovo’s stable score since 2022 largely reflects the limited development of non-bank finance avenues, such as capital markets, private equity and crowdfunding, alongside a weak strategic framework for financial literacy. While performance in access to bank finance is Kosovo’s strongest area, substantially supported by the Kosovo Credit Guarantee Fund (KCGF), shortcomings in asset registration and collateralisation are still evident, and credit information continues to affect SMEs’ lending conditions.
1.7.2. Sub-dimension 6.1: Bank finance
Kosovo scored 3.64 on Sub-dimension 6.1, slightly down from 3.788 in the 2022 assessment cycle. Despite the emergence of policies facilitating access to credit for SMEs, this marginal decline originates from gaps in creditor rights, asset registration and collateralisation, and the credit information framework, alongside a greater emphasis on monitoring and evaluation in the scoring calculation.
A key strength of Kosovo in facilitating SMEs’ access to bank finance lies in the credit guarantee schemes provided by the KCGF. Launched in 2016, the KCGF’s portfolio has steadily increased to reach a substantial size, supporting EUR 173 million in loans in 2024 (Kosovo Credit Guarantee Fund, 2025[3]) (1.7% of gross domestic product [GDP]), nearly twice the level in 2022 (EUR 97.5 million) (Kosovo Credit Guarantee Fund, 2023[29]). The KCGF’s portfolio has experienced substantial expansion since 2022, with the creation of the Green Recovery and Opportunity Window and the Export Window in 2022, the Women in Business Window and the Startup Window in 2023, alongside the Diaspora Investment Window in 2024. However, the bulk of the KCGF’s activity remains concentrated on its Standard Window, standing for 76.3% of the total loans supported. In terms of effectiveness, internal assessments estimate that the KCGF supported access to bank finance to 2 571 businesses, resulting in the creation of 4 801 jobs in 2024 (Kosovo Credit Guarantee Fund, 2025[3]). However, these results are based on internal monitoring and have not yet been assessed through an independent external evaluation of the KCGF’s additionality and impact. Positively, it should be noted that the KCGF’s donor dependency has declined since 2022: the Government of Kosovo provided 64% of the total capital in 2024 (Kosovo Credit Guarantee Fund, 2025[3]), compared with 45% in 2022 (Kosovo Credit Guarantee Fund, 2023[29]), reflecting the tool’s increasing financial sustainability (Table 1.15).
Creditor rights in Kosovo have experienced little change since 2022. A key remaining caveat of the secured-transactions framework is that, during reorganisation, existing owners and directors generally remain in control of the firm’s assets and operations rather than being automatically replaced by an insolvency administrator, thereby reducing creditors’ leverage over assets while the procedure is ongoing.
Kosovo’s asset registration and collateralisation system remains constrained by limited registry coverage, the absence of collateral valuation information and a lack of independent quality assessment. Regarding land assets, the cadastre is available through the Kosovo Cadastral Information System on the digitised eKosova platform and covers the entire economy. Nevertheless, despite efforts to reconstruct cadastral information through the implementation of the World Bank-supported Real Estate and Geospatial Infrastructure Project, historic ownership regularisation gaps remain and continue to affect the reliability and bankability of collateral (World Bank, 2025[30]) (Table 1.15). For movable assets, the online Pledge Registry captures identification characteristics (e.g. serial numbers and categories), but it does not include collateral values, which limits their use for consistent collateral valuation and monitoring. In addition, all electronic search requests in the Pledge Registry made by registered users, such as commercial banks, are subject to fees,9 which increases the transaction costs associated with using movable assets as collateral.
Regarding intangible assets, registered industrial property rights (patents, trademarks and industrial designs) are recorded in the Industrial Property Agency’s registers and can be pledged. However, while Kosovo’s Registration of a Pledge in the Registry of Movable Property and Administrative Direction No. 16/2016 allows banks to take security over intangible assets in principle, it does not specify which types of intangibles (such as patents, trademarks, brands, copyrights or licences) can be used as collateral, leaving a regulatory gap that hinders access to credit for the most innovative SMEs. Finally, no external assessment of the core asset registration systems is conducted in Kosovo, leaving the overall data accuracy unverified.
Regarding credit information bureaux, the public credit register is the Credit Registry of Kosovo, maintained by the Central Bank of Kosovo (CBK). All licensed banks, microfinance institutions, non-bank financial institutions and insurance companies are required to report loans and guarantees to it. However, Kosovo does not have a separate private credit bureau, and the registry’s data sources are limited to regulated credit providers, with no clear evidence that alternative data, such as utilities or telecoms records, are used in practice.
1.7.3. Sub-dimension 6.2: Non-bank finance
Kosovo scored 2.16 on Sub-dimension 6.2, a performance broadly stable compared to the 2022 assessment (2.12).10 Overall, Kosovo’s score largely reflects the continued absence of a dedicated legal framework for non-bank financing channels, such as capital markets, private equity, venture capital and crowdfunding.
Established SMEs in Kosovo currently have no access to capital-market financing, as the economy lacks a stock exchange and a dedicated legal framework for issuing and trading corporate securities. To address this gap, the government adopted in 2024 the Concept Document for the Development of the Regulatory Framework for Capital Markets, developed with support from the Investment Promotion and Access to Finance project funded by the US Agency for International Development. The concept document launched preparations for a package of primary legislation (notably a Law on Capital Markets and a Law on Publicly Offered Investment Funds), alongside amendments to related rules on securities, payments and financial-market infrastructure. However, progress has stalled, and no adoption timeline has been communicated to date (Ministry of Finance, Labour and Transfers, 2024[31]).
Early-stage businesses in Kosovo also face very limited alternatives to bank finance for funding their investments. Private equity and venture capital operate only sparingly in Kosovo, constraining high-potential SMEs from scaling up due to a lack of funding for their investments. The absence of domestic private equity activity in Kosovo is largely attributable to the lack of a dedicated legal framework for alternative investment funds. This gap is expected to be addressed through the Concept Document for the Development of the Regulatory Framework for Capital Markets, which foresees the preparation of a new Law on Alternative Investment Funds. However, no timeline for adoption has been communicated yet. Other underdeveloped avenues for accessing finance include crowdfunding and business angel investment. Crowdfunding remains constrained by the absence of a dedicated legal framework and, at the time of writing, no plans for its future adoption have been reported. Business angels could also play a more important role, especially for start-ups, but in Kosovo this segment remains largely informal and diaspora-driven.
Despite the absence of related data, available evidence suggests that factoring is an underdeveloped avenue for finance in Kosovo (Agence Française de Développement, 2022[32]). While the legal framework for factoring is available, regulatory gaps in the assignment of receivables and the registration of assignments increase the risk of double assignment and disputes with other creditors. Moreover, no active policies support the development of factoring, such as tax incentives, assistance or training for SMEs, further limiting its development.
Among alternative financing instruments in Kosovo, leasing finance is the most widely used option. Leasing volumes have increased significantly, reaching 1.0% of GDP in 2023 (EUR 103.1 million) (Central Bank of Kosovo, 2025[33]), up from 0.75% in 2019 (EUR 52.7 million), though this level remains below the EU average of 2.05% in 2023 (Leaseurope, 2024[34]). Available data indicate that the main driver of leasing growth is businesses, which accounted for 73.1% of total leasing in 2023, compared with only 54.8% in 2020 (Central Bank of Kosovo, 2025[6]), a trend the Central Bank of Kosovo attributes to their growing use by domestic SMEs. Unlike most alternative financing avenues, Kosovo has a core legal and supervisory framework for financial leasing and at least one well-established leasing provider. However, Kosovo has not implemented specific policies to develop this market, such as tax incentives to promote its use, which may limit its overall uptake.
1.7.4. Sub-dimension 6.3: Financial inclusion
Kosovo’s score on Sub-dimension 6.3 stands at 3.10, slightly down from 3.3111 in 2022. Overall, financial inclusion benefits from a relatively developed microfinance sector, but the policy framework for financial literacy remains nascent.
Kosovo’s strategic framework for financial literacy is absent, and policies are still at an early stage and delivered through a fragmented set of initiatives (Table 1.16). Financial literacy is mainly operationalised through CBK’s initiatives rather than structured in a strategic and policy framework. In practice, the CBK rolls out a range of awareness-raising and information tools,12 such as a dedicated financial education platform, a financial products comparison tool and targeted outreach activities, including the last Global Money Week 2025. These efforts are complemented by initiatives from the Kosovo Banking Association, which has also played a proactive role in promoting financial education and inclusion in cooperation with the Central Bank and other stakeholders. However, these initiatives continue to be not targeted at entrepreneurs’ specific needs.
Kosovo’s microfinance sector is relatively well developed and is experiencing robust growth. Nine microfinance institutions operate in Kosovo, supported by a relatively robust legal framework. The microfinance sector experienced a 24.6% increase in lending in 2024, with total loans reaching EUR 449.4 million (Central Bank of Kosovo, 2025[33]). Growth was observed in both household and business loans, confirming the growing uptake of SME loans. In 2024, loans to non-financial corporations grew by 31.7% to EUR 184.6 million (Central Bank of Kosovo, 2025[33]), and loans to households increased by 20.1% to EUR 264.7 million. However, one limitation in the future growth of the microfinance sector remains the high interest rates: in December 2024, the average interest rate on loans from microfinance institutions was 18.7%, while 5.9% for average interest rate of loans (Central Bank of Kosovo, 2025[33]), suggesting that proactive policies such as interest caps could stimulate future growth.
1.7.5. Overview of Kosovo’s performance on Dimension 7
Kosovo recorded an overall score of 3.83 on Dimension 7 (Figure 1.10), broadly in line with its score in 2022 of 3.77, placing it slightly below the Western Balkans and Türkiye (WBT) regional average of 3.97. Dimension 7, therefore, remains one of Kosovo’s high-performing policy areas, reflecting a quality infrastructure (QI) system that has continued to evolve and deliver results, even as challenges persist in maintaining coherence and strategic direction.
The assessment points to a QI framework characterised by uneven progress, where targeted advances have not yet fully offset pressures related to co-ordination and delivery capacity. As a result, the overall stability of the score masks diverging developments across the three sub‑dimensions. Small and medium-sized enterprises’ (SMEs) access to standardisation (Sub‑dimension 7.3) has remained broadly stable, while harmonisation with the European Union (EU) acquis (Sub-dimension 7.2) has improved modestly. By contrast, co-ordination and general measures (Sub-dimension 7.1) are weaker than in previous assessment cycle.
1.7.6. Sub-dimension 7.1: Overall co-ordination and general measures
Kosovo’s performance on Sub-dimension 7.1 has remained the same as in 2022, scoring 4 in 2026, above the WBT regional average of 3.97. This stability reflects persistent gaps in strategic co‑ordination and general support measures, despite some institutional developments in inter-ministerial co‑ordination.
Kosovo has made some progress in strengthening the overall co-ordination of its alignment with the acquis and advancing general measures to transform its QI system. However, no strategy or action plan for the adoption or implementation of EU legislation on industrial products has yet been published, which continues to limit the strategic articulation of these efforts. At the institutional level, an inter-ministerial working group co-ordinated by the Ministry of Industry, Entrepreneurship and Trade (MIET) has been established and is responsible for overall policy co-ordination related to the removal of trade barriers and the improvement of the QI system. While this is a step towards improved governance, the absence of consolidated information channels for firms remains a constraint. A Point of Single Contact has been established under the Ministry of Industry, Entrepreneurship and Trade and hosted through the eKosova portal, but the platform remains in development and is not yet fully operational for export purposes, with its current scope focused on service activities and business establishment rather than on export procedures and EU market access requirements for goods. This information gap is particularly relevant given the importance of the European Union as an export destination: 30.7% of Kosovo’s exports between August 2024 and August 2025 were directed to EU countries, according to the Kosovo Agency of Statistics (2025[35]).
1.7.7. Sub-dimension 7.2: Harmonisation with the EU acquis
Kosovo’s performance on Sub-dimension 7.2 has remained broadly stable across assessment cycles, increasing marginally from 3.76 in 2022 to 3.84 in 2026, less than the WBT regional average of 4.02. This stability reflects contrasting developments across components of the QI system. While some progress has been made in accreditation and market surveillance, persistent weaknesses in other QI sectors, especially conformity assessment, continue to limit further strengthening. As a result, gaps in digital capacity and co-ordinated institutional follow-up remain, constraining the extent to which alignment with the acquis translates into practical and predictable benefits for SMEs, despite continued legal alignment efforts (Table 1.17).
Kosovo’s performance on technical regulations has improved, reflecting continued legislative alignment with the acquis and gradual strengthening of the regulatory framework. Several new and amended acts have been adopted, including Regulation (MIET) 02/2022 on Equipment and Protective Systems for Use in Potentially Explosive Atmospheres, Law No. 08/L-172 on General Product Safety in 2023, and Administrative Instruction No. 10/2023 on Prefabricated Concrete Products, reinforcing alignment in key regulated sectors. These measures provide a stronger legal basis for product safety and market access and contribute to greater regulatory clarity for firms. Training activities supporting implementation have continued to expand, supporting awareness among economic operators, including SMEs. However, an overarching strategy guiding transposition of technical regulations has yet to be fully developed, and digitalisation among monitoring institutions remains low. Furthermore, the Law on General Product Safety does not transpose new the most recent EU acquis established by the Regulation (EU) 2023/988 on general product safety.
Kosovo’s performance in standardisation has declined slightly in the current assessment cycle, largely reflecting continued constraints in the implementation and enforcement of standards. The Kosovo Standardization Agency (KSA) operates with limited institutional capacity, with six staff members and restricted resources, which affects the pace and reach of standardisation activities. To date, around 40% of European standards have been adopted as standards, and the Standardization Strategy provides an overarching framework that also recognises the role of SMEs. However, the absence of international membership and the slow operationalisation of adopted standards continue to limit SMEs from participating, while also increasing the cost and complexity of accessing standards.
Accreditation performance in Kosovo has improved markedly since the previous assessment, reflecting strengthened institutional capacity within the Directorate of Accreditation of Kosovo, which retains affiliate membership in the European co-operation for Accreditation (EA) and observer status in the International Accreditation Forum, supporting alignment with international accreditation practices. Institutional governance has also been reinforced through the establishment of a new Accreditation Council in 2024, while the planned digitalisation of accreditation applications in 2025-2026 is expected to further enhance administrative efficiency. However, in the absence of EA Multilateral Agreement signatory status, accreditation certificates issued domestically are not fully recognised in the European Union, which continues to increase compliance costs for SMEs engaged in export activities.
Conformity assessment remains an area affected by shortcomings, marked by structural gaps in support, oversight and implementation. The absence of targeted financial and regulatory measures continues to leave SMEs dependent on foreign certification bodies, resulting in higher costs and longer time frames for market entry. Institutional processes remain largely non-digitalised, and there is no system for regular evaluation of conformity-assessment needs or performance, limiting the ability to identify gaps or adapt support measures. Despite the Administrative Instruction (GRK 05/2025) on the designation of conformity-assessment bodies being adopted in 2025 and the Quality Infrastructure Division formally monitoring their activities, these steps have not yet translated into practical improvements for SMEs or reduced reliance on foreign certification services.
Metrology performance has declined slightly since the previous assessment, reflecting delays in translating planned reforms into operational improvements. While a concept document for a new Law on Metrology has been approved in 2024, providing for clearer delineation of institutional responsibilities and the digitalisation of services, it is currently pending adoption. At the institutional level, the Metrology Agency is recognised by WELMEC and EURAMET and continues to engage in regional co-operation with TÜBİTAK UME and DPM Albania. These partnerships support the technical credibility and traceability of measurement results. However, limited staffing levels and the still low degree of service digitalisation continue to affect delivery capacity. As a result, despite solid institutional recognition and ongoing co-operation, access to calibration and measurement services for SMEs is constrained, contributing to the observed decline in performance.
Kosovo’s performance in market surveillance has improved in the current assessment cycle, reflecting the modernisation of surveillance practices and stronger institutional co-ordination. The Division for Quality Infrastructure is currently drafting a new Law on Inspection of Product Compliance to transpose EU Regulations 2019/1020 and 2019/515, with finalisation planned for Q4 2026. Co-ordination under the Office of the Inspector General has strengthened through the use of joint inspections, helping to streamline controls and reduce administrative burdens on firms. At the operational level, the Blej Sigurt (“Buy Safe”) mobile application has enhanced transparency by enabling the reporting of unsafe products. However, inspection activity remains uneven and digital tools are still fragmented, which continues to limit predictability and consistency for SMEs despite the overall improvement in performance.
1.7.8. Sub-dimension 7.3: SMEs’ access to standardisation
Kosovo’s performance on Sub-dimension 7.3 has remained broadly stable between assessment cycles, increasing marginally from 3.57 in 2022 to 3.59 in 2026, placing the economy slightly below the WBT regional average of 3.86. This stagnation indicates that, although there are some awareness-raising and limited support mechanisms in place, no structural shift has occurred in improving SME access to standardisation, particularly in terms of systematic participation, institutional co-ordination and targeted financial support.
Awareness-raising activities are implemented on an ad hoc basis, mainly through the Kosovo Investment and Enterprise Support Agency (KIESA), which has organised several promotional campaigns and product certification grant schemes. These initiatives have supported outreach efforts, but they remain largely donor-driven and are not embedded within a co-ordinated approach involving KIESA, the KSA and business associations. As a result, information provision to SMEs remains fragmented, as there is no central platform that consolidates up-to-date guidance on applicable standards and certification requirements. This continues to limit the consistency and reach of awareness-raising efforts across the SME population (Table 1.18).
Kosovo has improved its performance in SME participation in developing standards under the KSA, thanks to the institutionalisation of 20 technical committees, each meeting at least twice a year. These committees allow SMEs to contribute directly to discussions on standards and to raise sector-specific needs during the development and revision process. Additionally, SMEs can provide written feedback during a 60-day public discussion phase, enabling broader participation beyond committee membership. While SME involvement through technical committees and public consultations is facilitated, participation is not yet systematically monitored or evaluated and SMEs still face constraints in engaging in standard-setting activities and adopting standards in practice.
Financial support for standardisation and certification in Kosovo has slightly declined, reflecting a largely static support framework and limited evidence of results. Although grant schemes administered by KIESA remain available, their scope has not evolved in recent years, with public calls continuing to focus on product certification and coverage of participation costs in technical committee meetings. While a monitoring committee reviews the support on an annual basis, the absence of systematic tracking of outcomes such as certifications obtained or standards implemented continues to constrain the effectiveness and adaptability of the financial support framework.
1.8.1. Overview of Kosovo’s performance on Dimension 8a
Kosovo received an overall score of 3.05 on Dimension 8a (Figure 1.11), marking a notable decline from the 3.44 recorded in the previous assessment. As a result, Kosovo now falls below the Western Balkans and Türkiye (WBT) regional average of 3.44 and ranks as the second-weakest performer. This decline has shifted Dimension 8a from its previously stronger position to a mid-scoring area of performance, pointing to renewed scope for improvement.
The decline in Kosovo’s overall score since 2022 reflects the absence of progress across all three thematic blocks. Kosovo has continued to rely on skills intelligence tools designed and implemented by international partners in the previous cycle, which had underpinned the improvements observed at that time. As these tools have not been updated, expanded or leveraged as a foundation for further development, they have become obsolete, resulting in gaps at the planning and design and implementation stages. In addition, the revised methodology for this assessment cycle places a greater emphasis on monitoring and evaluation, which is a relatively weaker area of performance for Kosovo.
1.8.2. Developments since 2022
The decline in the planning and design score reflects the still limited integration of skills intelligence across the wider strategic policy framework. Although Kosovo’s Development Strategy 2030 and the Employment Strategy 2024-2028 include references to skills intelligence, several other key strategies that would normally provide natural entry points for embedding enterprise skills, such as a Smart Specialisation Strategy and the Innovation Strategy 2030+, remain under development. As a result, cross-cutting linkages are weak, and opportunities to systematically integrate skills intelligence into broader economic, innovation and enterprise policies have yet to materialise.
Moreover, most existing skills intelligence tools are now outdated: in the previous assessment cycle, the development of statistical barometers (e.g. Labour Market Barometer, VET Barometer, Skills Barometer) marked significant progress. However, the lack of regular updates since 2022 has reduced their analytical value and relevance for current policy design (Table 1.19). In addition, other existing skills assessment and anticipation tools do not sufficiently address emerging areas (the green and digital transitions, artificial intelligence, etc.), constraining forward-looking planning for future skills needs.
Performance in implementation has also weakened, despite the continued availability of a relatively broad range of small and medium-sized enterprise (SME) training offers. Provision remains a clear strength: institutions such as the Kosovo Investment and Enterprise Support Agency and the Innovation and Training Park Prizren deliver programmes targeting emerging skills needs, notably in digital and ICT fields, including specialised artificial intelligence-related skills, alongside selected initiatives linked to the green transition. However, availability alone has not translated into effective uptake. While participation among employed individuals exceeds the regional average (Figure 1.12), overall participation rates decline sharply when the wider population is considered, pointing to persistent barriers for unemployed individuals. This limits both labour market reintegration and SMEs’ ability to address skills shortages. These challenges are reinforced by structural constraints: no dedicated financial support mechanisms are in place to subsidise participation in training, and shorter, more flexible learning formats such as micro-credentials remain insufficiently regulated, constraining their recognition and scale. As a result, although training provision exists, gaps in incentives, accessibility and regulatory frameworks continue to limit the effectiveness and scalability of SME skills development in Kosovo.
Implementation challenges are also evident in the area of social entrepreneurship. Although the Law on Social Enterprises provides a strong legal foundation, offering a broad definition that is not restrictive in terms of legal form or activity and introducing attractive fiscal incentives, the lack of targeted training, mentoring and capacity building has limited its translation into effective support for social entrepreneurs and enterprises.
Note: The WBT average includes Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia.
Source: Adapted from ETF (2025[36]).
Monitoring and evaluation mechanisms remain underdeveloped and have seen little change since 2022. Namely, there is limited evidence of government-led monitoring or evaluation of publicly financed training or SME support programmes, with available assessments primarily stemming from donor-funded initiatives. The absence of a systematic approach to data collection and evaluation limits the government’s capacity to adapt programme design, focus and delivery to better address SMEs’ needs (Table 1.19). Similarly, while a register of social enterprises was introduced in late 2023, it has not yet been made publicly available, restricting the ability to track sector developments and assess policy impact. Moreover, due to the aforementioned lack of bylaws, no specific indicators or criteria have been established to measure the outcomes or social impact of social economy activities, further hindering evidence-based policymaking.
1.9.1. Overview of Kosovo’s performance on Dimension 8b
Kosovo received an overall score of 2.62 on Dimension 8b, which is a slight increase since 2022 (2.47) (Figure 1.13). Kosovo lags behind in the Western Balkans and Türkiye (WBT) region, largely below the regional average of 3.27. Dimension 8b is one of its comparatively lower scoring areas, highlighting room for further progress in strengthening small and medium-sized enterprise (SME) innovation policy.
The slight increase in Kosovo’s score is a result of stronger direct grant support and progress in the accelerator and technology extension services (TES) infrastructure for established SMEs, which have been offset by a weaker strategic framework for SME innovation, the lack of indirect support instruments (e.g. fiscal incentives for business expenditure on research and development [BERD] and innovation vouchers), and persistent gaps in intellectual property rights (IPR) enforcement.
1.9.2. Sub-dimension 8b.1: Policy framework for innovation
Performance in the policy framework for innovation has slightly declined, from 2.72 to 2.54, reflecting the absence of a dedicated strategic framework for innovation policy, alongside a fragmented implementation set‑up and very limited formal co-ordination mechanisms.
Kosovo lacks a dedicated and comprehensive strategic approach to SME innovation. The Innovation and Entrepreneurship Strategy (2019-2023) has expired, and authorities report that Kosovo’s Strategy for Innovation 2030+ is under development, but there is no timeline for its adoption. Kosovo still lacks an operational smart specialisation strategy: while the draft prepared in 2023 is ready, formal adoption remains pending. At the time of writing, SME-relevant innovation objectives are anchored in the Strategy for Industrial Development and Business Support (2023-2030), which promotes SME digital innovation and general product innovation, notably through the sub-objectives “Accelerate Digitalisation in Manufacturing” and “Improve Product Innovation Towards Higher Value‑Added Products”. The strategy also sets out implementation and evaluation arrangements, including annual public progress reporting and independent interim and final evaluations, scheduled for 2026 and 2030, respectively. While this strategy includes implementation and evaluation arrangements, including annual public progress reports and independent evaluations planned for 2026 and 2030, effective monitoring is likely to remain constrained by major statistical gaps in core innovation indicators, such as gross domestic expenditure on research and development. As a result, the 2022 recommendation to strengthen Kosovo’s innovation measurement and strategic policy framework remains essentially unaddressed (Table 1.20).
The implementation of Kosovo’s SME innovation policy is distributed across ministries and delivery bodies rather than channelled through a dedicated SME innovation agency. In practice, policy design and oversight are shared across line ministries (notably the Ministry of Industry, Entrepreneurship and Trade [MIET] and the Ministry of Education, Science and Technology) and implementing structures such as the Kosovo Investment and Enterprise Support Agency (KIESA). While Kosovo’s Government Programme (2021-2025) envisaged the establishment of a fund for research and innovation, progress has so far remained limited. Nevertheless, the draft Law on Innovation and Entrepreneurship, expected to be adopted in May 2026, provides for the creation of an Innovation Fund within the Agency for Innovation and Support to Enterprises in Kosovo.
Co-ordination of innovation policy in Kosovo remains dispersed across several bodies and relies primarily on informal mechanisms, such as working groups, rather than on a single formal inter-ministerial body. In practice, these informal co-ordination channels have included working groups to prepare the Strategy for Innovation 2030+, as well as the inter-institutional set-up supporting the smart specialisation strategy drafting process, typically bringing together relevant ministries, implementing agencies, and, in many cases, private sector stakeholders.
1.9.3. Sub-dimension 8b.2: Government institutional support services for innovative SMEs
Kosovo achieved a score of 2.70 on Sub-dimension 8b.2, substantially up from 2.19 in 2022. This increase in score was driven by developments in the accelerator and TES infrastructure, while the support services ecosystem remains centred mainly on incubation.
The incubator and accelerator infrastructure is uneven across the economy. In 2025, there were 14 business incubators operating in Kosovo,13 reflecting a modest expansion since 2022, following the establishment of an incubator at the Haxhi Zeka University in Peja. The Innovation Centre Kosovo remains the economy’s core incubator and continues to serve as the main entry point for early-stage innovation, with a strong focus on digital innovation. Despite being nascent, the accelerator infrastructure in Kosovo began to expand during the last assessment cycle: since 2023, more structured acceleration-type support has emerged, notably through TechPark Pristina, established through a partnership between the Government of Kosovo and STIKK and described as the first accelerator centre for ICT-focused start-ups in Kosovo. Start-ups hosted at the TechPark have also benefited from support under the EU-funded STAR UP project,14 including mentorship, training, grants, networking, export support, and access to local and international platforms.
Technology extension services in Kosovo are at an early stage and primarily focus on digital technologies. Available support is mainly channelled through the Innovation and Training Park (ITP) Prizren, including the Digital Transformation Centre, which functions as a one-stop shop for digital ecosystem development, and DIG-4K (Digital Innovation Gateway for Kosovo), launched in April 2025, Kosovo’s first European Digital Innovation Hub.15 Overall, despite these developments, the TES’s outreach to established SMEs remains limited, especially for firms operating outside the ICT sector.
1.9.4. Sub-dimension 8b.3: Government financial support for innovative SMEs
Kosovo scored 2.85 on Sub-dimension 8b.3, more than in the previous assessment when it scored 2.44, reflecting developments of direct grant-based support for innovative SMEs and increased monitoring. There are, however, no fiscal incentives for business R&D.
Kosovo has expanded direct financial support for innovative SMEs since the last assessment cycle, with a particular focus on the digital transformation, while a substantial part of this funding remains donor-funded. Within the remit of the MIET and KIESA, the flagship Innovation Grant Scheme was launched in 2024, with two windows – one for established SMEs and one for start-ups – co-financed by the government and the Luxembourg Agency for Development Cooperation for a total of EUR 1.9 million (Table 1.21). Since 2025, this has been complemented by an ICT Grant Scheme for SMEs, with a budget of EUR 1 million, which supports innovation projects in the ICT sector and serves as a dedicated instrument for digital upgrading among established firms. While there is no domestic instrument specifically targeting SME green innovation in Kosovo, this gap is partly addressed by the LuxAid Challenge Fund. Launched in 2024, the fund has a budget of over EUR 1.5 million and provides grants to start-ups implementing innovation projects aligned with the Sustainable Development Goals. Within the same financial envelope, the Demonstration Fund supports established SMEs to scale commercially viable innovations, with a particular focus on circular economy projects. Finally, it should be mentioned that Kosovo has recently conducted a performance audit on the MIET’s and KIESA’s grants supporting SMEs for the period 2019-2022, showing that beneficiary selection and programme design were not consistently underpinned by needs analysis and pointing to gaps in beneficiaries’ performance tracking (Kosovo's Audit Office, 2023[37]).
Kosovo does not currently have indirect financial support for business R&D, there is no dedicated set of fiscal measures (e.g. an R&D tax credit) to stimulate business R&D or other innovation-related expenditure.
1.9.5. Sub-dimension 8b.4: SME and research institution collaboration and technology transfer
Kosovo scored 2.46 on Sub-dimension 8b.4, a modest improvement compared to the 2022 assessment (2.30). This stagnation reflects incremental developments in the infrastructure for business-academia co‑operation, but the absence of a domestic innovation voucher scheme, coupled with gaps in IPR enforcement, continues to hinder SME innovation.
Kosovo’s institutional infrastructure for business-academia co-operation remains at an early stage of development. First, Kosovo reports no operational innovation voucher scheme and no co-operative grants, meaning that structured business-academia co-operation is not driven through dedicated calls. Kosovo’s business-academia co-operation is mainly supported by a patchwork of actors, with linkages largely organised on an ad hoc project basis rather than through institutionalised collaboration programmes. Within this set-up, some universities have established technology transfer and commercialisation functions, such as the University of Business and Technology of Pristina’s Technology Transfer Centre. Complementing these, Kosovo has also developed platforms that provide shared infrastructure and services, the most notable of which is the ITP Prizren and DIG-4K, Kosovo’s first European Digital Innovation Hub. Third, the ecosystem is substantially backed by donor-led projects involving SMEs through joint trainings, mentorship and advisory support, access to shared facilities, and networking platforms, such as the ITP Prizren’s Digital Transformation Centre.
Finally, Kosovo has strengthened and further aligned its IPR legislative framework with EU standards. A new Law on Copyright and Related Rights16 entered into force in October 2023, the Industrial Property Programme 2025-2027 and its accompanying Action Plan have been adopted to strengthen Kosovo’s industrial property system. However, the framework for IPR generated through publicly funded research remains incomplete: ownership, allocation and royalty-sharing arrangements rely mainly on general patent law provisions rather than a comprehensive regime. On IPR promotion, the Industrial Property Agency reports plans to introduce a tailored, free-of-charge IP “scanning” service to help SMEs identify IP assets and shape IP strategies. Finally, IPR enforcement remains constrained by the Industrial Property Agency’s capacity gaps and the absence of a dedicated IP court body and a designated out-of-court mechanism for IP disputes, which can make dispute resolution cumbersome for SMEs.
1.10.1. Overview of Kosovo’s performance on Dimension 9
Kosovo scored 2.29 on Dimension 9 (Figure 1.14), increasing from 2.05 in the previous cycle. However, it continues to lag the regional average of 3.16. Overall, this improvement reflects stronger strategic prioritisation of greening policies focused on small and medium-sized enterprises (SMEs). Dimension 9 remains Kosovo’s lowest-performing policy area.
Since 2022, Kosovo’s score reflects improvements in strategic planning and some evidence of implementation. Planning and design have strengthened in Sub-dimension 9.1, while implementation evidence has boosted the score in Sub-dimension 9.2. However, the absence of robust monitoring and evaluation within the SME greening policy framework and incentive structures weakens the overall effectiveness of the policy cycle, which carried greater weight in this assessment cycle (see Annex).
1.10.2. Sub-dimension 9.1: Framework for greening policies targeting SMEs
Performance in this sub-dimension has remained stable, from 2.40 in 2022 to 2.39 in 2026. Progress was observed in planning and design, but implementation, and monitoring and evaluation still lag.
Kosovo has several strategies with SME-targeted greening measures. The key document is the Strategy for Industrial Development and Business 2030 (“Industrial Policy”), adopted in 2023, which includes a strategic objective to facilitate circular and green industry in the SME sector in line with the Reform and Growth Facility. Sectoral strategies, such as the Energy Strategy 2022-2031 and its Implementation Programme, provide targeted SME support for energy efficiency and renewable energy uptake. Kosovo’s draft Energy and Climate Plan aligns with these strategies. However, it has not yet been adopted to guide industry-wide decarbonisation in line with EU Green Deal provisions, including the Carbon Border Adjustment Mechanism (CBAM).
Implementation shows room for further improvement. Several key actions, including the establishment of a circular-economy funding window within the Innovation Fund, have not advanced (see Table 1.22). Consolidated insights on budget use across strategies are lacking, making it difficult to assess whether strategic objectives are translating into impactful policy actions. Moderate progress was achieved in raising awareness among SMEs about environmentally friendly practices, driven through donor projects (see Table 1.22).
Persistent gaps in monitoring and evaluation hinder the assessment of SME greening policies. Tracking progress is constrained by missing data on core industrial policy indicators, such as reductions in energy intensity, the market share of environmentally friendly products17, and value added from circular-economy activities. Baselines for several indicators are absent, preventing meaningful assessment. Without systematic data collection, evidence-based policy adjustments remain difficult.
1.10.3. Sub-dimension 9.2: Incentives and instruments for SME sustainability
Kosovo scored 2.21 on Sub-dimension 9.2 on incentives and instruments for SME sustainability, up from 1.77 in 2022. The progress reflects strengthened implementation and a slight improvement in monitoring and evaluation systems.
Kosovo’s Industrial Policy explicitly foresees the use of regulatory and financial instruments to support SMEs in the green transition. Key measures include the development of green industrial parks,18 improvements in government procurement legislation to incentivise green products, and proposed tax incentives for investment in innovation to encourage higher value-added products that would also benefit eco-innovation.
However, since 2022, no regulatory instruments, such as minimum sustainability requirements or performance standards, have been applied, nor have there been targeted efforts to reduce administrative or regulatory burdens for SMEs in this area. For example, planned tax incentives for manufacturing firms, which could have promoted eco-innovation, have not been implemented due to delays in amending the Corporate Income Tax Law.
Training for contracting authorities on green public procurement has not been conducted, and guidance materials for SMEs to participate in related tenders are still needed. Positively, with support from the US Agency for International Development, the Ministry of Economy (2024[38]) published a Guide for Renewable Energy Investment in Kosovo in late 2024, aimed at simplifying the permitting process for companies and investors in line with the Energy Strategy (2022-2031).
Regarding financial instruments, the Kosovo Credit Guarantee Fund’s green window and government grant schemes have, to some extent, driven progress (Box 1.4). Support for existing business incubators to promote green and circular innovation and startups, along with the creation of a dedicated green technology window within the planned Innovation Fund, targeting at least 40 companies within 2026, is also envisaged under the third pillar of Kosovo’s Reform Agenda. However, progress depends on the adoption of the Law on Innovation and Entrepreneurship. Still, moderate advancement in green finance for SMEs has been noted (Table 1.23).
Policy context
The Kosovo Credit Guarantee Fund piloted the GROW (Green Recovery and Opportunities Window) in 2022 and officially launched it in 2023, against the backdrop of Kosovo having the lowest energy productivity among the Western Balkan 6 (WB6) economies and levels more than twice below the EU average between 2020 and 2023 (OECD, 2025[39]). The window provides guarantees for investments in renewable energy and energy efficiency, with the aim of supporting SMEs in improving sustainability.
Operational aspects
GROW provides guarantees of up to 70% of the loan principal for investments in renewable energy and energy efficiency, delivered through six commercial banks. Supported investments include building envelopes, energy-efficient equipment, production lines and small-scale renewable energy up to 400 kilowatts.
Policy impact
In its first year, the window supported seven SMEs with loans totalling EUR 3.9 million, followed by another seven businesses receiving EUR 1.9 million in 2024.
Source: Kosovo Credit Guarantee Fund (2024[2])
Overall, however, evidence of SME greening incentives beyond these programmes is limited. Without systematic monitoring and evaluation, there is no basis to assess the effectiveness of these instruments, constraining the ability to measure impact and improve the business environment for SMEs in the emerging green economy.
1.11.1. Overview of Kosovo’s performance on Dimension 10
Kosovo received an overall score of 3.70 on Dimension 10, marking a moderate decline from 3.85 in 2022 (Figure 1.15). Despite this decrease, Kosovo continues to perform close to the Western Balkans and Türkiye (WBT) regional average of 3.76. Internationalisation continues to be a mid- to upper performing dimension compared to several other dimensions.
Scores have fallen across all three sub-dimensions, reflecting persistent implementation weaknesses, fragmented institutional responsibilities and limited monitoring systems, which have constrained the effectiveness of internationalisation support. While the policy framework has been strengthened through the Industrial Policy 2030, the Law on Sustainable Investment and its accompanying Action Plan, these reforms have yet to translate into measurable improvements in programme uptake and firm-level upgrading, particularly in a context of low export intensity and limited diversification.
1.11.2. Sub-dimension 10.1: Export promotion
Kosovo’s score on export promotion has more or less stagnated, decreasing marginally from 3.89 in 2022 to 3.81 in 2026. The strategic framework for export support has improved, but this has not yet translated into stronger performance in implementation and monitoring (Figure 1.15).
Export promotion is now anchored in the Strategy for Industrial Development and Business Support 2030 and its Industrial Policy action plan 2023-2025, which establishes export competitiveness as a core objective and identifies priority sectors such as manufacturing, ICT, tourism, wood processing and agro-industry. The Law on Sustainable Investment strengthens this framework by defining priority sectors, incentivising export-oriented investment, and promoting circular economy and green practices that enhance international competitiveness. The Action Plan sets out these objectives through concrete measures: expansion of the Kosovo Credit Guarantee Fund (KCGF) export window, establishment of an Export Market Information Centre (EMIC), delivery of sales missions, business to business forums, training and the development of a Kosovo exporter catalogue.
Implementation intensity has increased since 2022. The Kosovo Investment and Enterprise Support Agency (KIESA) reports supporting over 1 170 SMEs between 2022 and 2024 through grant schemes, fairs and business linkages. In 2024 alone, Kosovo organised 17 international fairs, supporting around 180 businesses, and facilitated business to business events connecting 165 enterprises with foreign buyers (KIESA, 2025[40]) (Box 1.5). These efforts are complemented by financial instruments, including investment-loan subsidies under the Economic Revival Package and the export-oriented credit guarantee window. However, participation remains dominated by export-ready firms, with fewer first-time exporters benefiting from support. Export growth in Kosovo continues to be driven primarily by services, particularly diaspora driven tourism (travels), ICT and professional services, while goods exports remain limited in scale and value added, underscoring structural constraints in manufacturing-based internationalisation. This limits the extent to which export promotion measures translate into broader SME upgrading and diversification of the export base. Digitalisation of export promotion has advanced only to a limited extent. KIESA’s enhanced its online presence through online promotion channels, including exporter catalogues and directories used for visibility and matchmaking, as well as web-based outreach and social media promotion (KIESA, 2025[40]). However, these tools remain largely informational, with no integrated application systems, interactive services or data‑driven functionalities. Although EMIC intends to consolidate export-related market intelligence into a single platform, it is yet to be operationalised. As a result, the digital offer remains fragmented and insufficient to significantly improve the accessibility or efficiency of export‑promotion services (Table 1.24). More broadly, implementation of the wider export‑promotion reform agenda has been slowed by legislative bottlenecks which have delayed the adoption and operationalisation of major reforms, including the Law on Sustainable Investment and the establishment of new export‑support institutions.
Monitoring and evaluation performance have deteriorated since the last assessment. While Industrial Policy 2030 progress reports and post-event assessments are produced, monitoring arrangements remain fragmented and predominantly output-focused, with limited use for policy learning or adjustment. Systems do not track how SMEs transition from support to sustained export growth, nor the distribution of benefits by firm size, sector or region (KIESA, 2025[40]). A more sophisticated monitoring and evaluation framework is needed to guide targeting and improve programme effectiveness (European Commission, 2024[41]).
Kosovo has established a consistent and results‑oriented approach to SME internationalisation through KIESA’s annual programme supporting participation in international fairs and business missions. In 2024, this programme enabled SMEs to showcase over 1,000 Kosovo products to regional and EU buyers and expand their visibility in foreign markets. This structured support directly addresses a long‑standing barrier for Kosovo SMEs: limited access to foreign market exposure and networking opportunities (KIESA, 2025[40]).
The fair‑support programme operates as a core, institutionalised export‑promotion function, embedded within Kosovo’s broader reform agenda for competitiveness and aligned with Economic Reform Programme (ERP) 2025-2027 priorities on expanding export capacity, strengthening SME readiness and diversifying export destinations. By systematically enabling SMEs to enter new markets, connect with buyers and test demand, the programme lowers entry costs for first‑time exporters and reinforces links between firms and international value chains (Ministry of Industry, Entrepreneurship and Trade, 2024[42]).
While the programme alone cannot overcome broader structural constraints on goods exports, it demonstrates an effective model of targeted support within the wider export‑promotion system. As Kosovo advances complementary reforms – including upgraded conformity assessment infrastructure and expanded SME export‑readiness support under the Reform Agenda – the programme provides a strong operational foundation for deepening export performance and widening market access for domestic enterprises (Kosovo Government, 2024[43])
1.11.3. Sub-dimension 10.2: Integration of SMEs into global value chains
Kosovo’s score for integration into global value chains (GVCs) has slightly declined, from 3.75 in 2022 to 3.61 in 2026 (Figure 1.15). This reflects limited progress in implementation, as declines in planning and design and implementation were only partly offset by improvements in monitoring and evaluation, pointing to challenges in operationalising existing strategic commitments rather than a weakening of the policy framework.
The policy framework for GVC integration is well-articulated. The Industrial Policy 2030 and Law on Sustainable Investment place a strong emphasis on increasing local value added, strengthening supplier capabilities and linking SMEs to foreign investors, particularly in manufacturing, ICT, agriculture and green industries. These frameworks create an enabling environment for supplier upgrading but require operationalisation through concrete programmes, diagnostics, and targeted financial and advisory support.
Implementation remains largely project-based. KIESA’s grant schemes prioritise investment that increases production and export capacity, including environmentally sustainable upgrading and standards adoption. The Kosovo Credit Guarantee Fund (KCGF) export window, innovation grants and donor-led value-chain projects (in agro-processing, ICT, tourism and manufacturing) have contributed to incremental firm-level upgrading, primarily through investment support and capacity building (European Commission, 2024[41]). However, Kosovo lacks an economy-level Supplier Development Program comparable to those of its regional peers, and has no systematic process for identifying supplier gaps, offering tailored upgrading support or matching SMEs with multinational enterprises (MNEs).
Monitoring and evaluation are driven by more regular Industrial Policy 2030 progress reporting and improved use (mainly for implementation and accountability reporting) of administrative data by KIESA and the KCGF. However, systems remain fragmented and partial. Kosovo still does not collect systematic data on SMEs’ participation in GVCs, such as the number of SMEs integrated into multinational enterprises (MNE) supply chains, contract volumes, sectoral distribution or capability upgrading over time. Existing data are fragmented across KIESA, the KCGF, donor programmes and business associations. The Industrial Policy 2030 progress reports monitor export-related actions but do not yet include detailed indicators on GVC integration (Table 30). As a result, despite improved reporting practices, monitoring provides limited support for evidence-based targeting and policy learning, and key barriers such as certification costs, quality infrastructure gaps and logistics constraints remain insufficiently tracked.
1.11.4. Sub-dimension 10.3: Promoting the use of e-commerce
Kosovo’s score on this sub-dimension has declined from 3.97 in 2022 to 3.62 in 2026, reflecting weaker performance across all three assessment blocks (Figure 1.15). This decline suggests that progress in strengthening the legal and strategic foundations for digitalisation has not yet translated into a coherent, SME-focused framework supporting e-commerce.
The legal and strategic basis for e-commerce is relatively well-developed. The Digital Agenda for Kosovo 2030 embeds the digital transformation of business as a strategic objective and recognises the need to develop an e-business and e-commerce ecosystem. Alignment with the European Union’s (EU) eIDAS framework through the Law on Electronic Identification and Trust Services, together with the Law on Information Society Services, the Law on Consumer Protection, and the Law on Personal Data Protection, provides a solid legal basis for online transactions (Kosovo Government, 2023[44]). Recent regulatory progress in payment services, notably the Central Bank’s Instruction on QR Code Standards, which enhances interoperability and supports the expansion of digital payments, has further strengthened the framework for electronic transactions. However, important gaps remain. The draft Law on Electronic Commerce, which would deepen the regulatory and consumer protection framework specifically for online transactions, has not yet been adopted. Beyond this legislative gap, weaknesses in consumer protection enforcement and dispute resolution mechanisms for online commerce persist. As a result, while the legal environment enables e-commerce in principle, it does not yet actively facilitate its uptake among SMEs.
Fragmentation in implementation further weakens policy effectiveness. Responsibilities for e-commerce are dispersed across the Ministry of Industry, Entrepreneurship and Trade; the Ministry of Economy; and the Central Bank of Kosovo, with no single authority responsible for co-ordinating SME-focused e‑commerce policy design, delivery and monitoring (Kosovo Government, 2023[45]). This has contributed to the absence of a coherent, integrated government programme addressing key barriers to SME participation in online markets, such as logistics, platform integration, cross-border compliance and advanced digital marketing. Some targeted support is available through the Grant Scheme on Digitalisation, which offers small grants of up to EUR 3 500 for e-commerce platforms, digital marketing and automation solutions, and through donor-backed initiatives such as the GIZ-supported digitalisation project, the Enterprise Europe Network Kosovo Innovation Consortium, The European Digital Innovation Hub in Prizren, co-funded by Digital Europe Programme, and the European Bank for Reconstruction and Development’s Go Digital programme. The FEGO project has also provided targeted support to Kosovo's apparel sector, assisting around ten businesses with online store development and digital payment integration. However, these initiatives remain fragmented and are not embedded in a unified e-commerce strategy. Kosovo also lacks a dedicated, government-managed SME e-commerce portal offering consolidated and regularly updated guidance on online selling, platform use, logistics and cross-border requirements (Table 1.26). Instead, SMEs rely largely on project-based resources, such as the CEFTA-linked Ecommerce4all-KS platform.
Monitoring and evaluation remain underdeveloped. Kosovo does not collect systematic, economy-wide data on SME e-commerce uptake or barriers, relying instead on donor-funded studies and occasional surveys. This limits visibility on adoption trends and constrains evidence-based policymaking. Taken together, persistent gaps in policy design, institutional co-ordination, implementation and monitoring help explain the decline observed across all three thematic blocks.
1.12.1. Overview of Kosovo’s performance on Dimension 11
Kosovo achieved an overall score of 2.91 on the new Dimension 11 (Figure 1.16), placing it just below the Western Balkans and Türkiye’s regional average of 3.00 and indicating moderate efforts in SME digital transformation.
Performance across the three sub-dimensions varies: results are the strongest in Sub-dimension 11.1 on digital policy foundations, reflecting the adoption of comprehensive strategic frameworks such as the Digital Agenda 2030 and growing policy attention to SME digitalisation. Sub-dimension 11.2 on digital safety shows intermediate development, with a legal framework that is increasingly aligned with European Union (EU) standards for data protection and cybersecurity but limited SME-oriented implementation and support. Sub-dimension 11.3 on the use of advanced technologies records the weakest performance, as strategic recognition of emerging and green digital technologies has not yet translated into coherent, SME-focused instruments or large-scale delivery mechanisms. Overall, Dimension 11 ranks in the middle of Kosovo’s policy performance for the current assessment, suggesting that while foundational elements are in place, the digital transformation of SMEs remains less advanced than several other areas of SME policy.
1.12.2. Sub-dimension 11.1: Digital policy foundations
Kosovo has achieved a score of 3.22 on Sub-dimension 11.1, indicating a solid strategic orientation toward SME digital transformation, but which is challenged by gaps in operationalisation, scale, and monitoring. The largely coherent policy architecture has yet to be translated into concrete delivery instruments and is not systematically supported by robust monitoring and evaluation mechanisms that would allow results to inform subsequent policy cycles and strengthen impact.
Policy planning and design for SME digital transformation are anchored in several high-level strategic frameworks. Digitalisation is embedded most prominently in the Digital Agenda for Kosovo 2030, which functions as a horizontal policy guidance framework placing SMEs at the centre of business digital transformation. The strategic objective on digital transformation of business earmarks an estimated EUR 31.6 million for 2022-2030 and sets out measures to strengthen SME digital capabilities, expand e-commerce and promote digital investment. These priorities are reinforced by Kosovo’s Development Strategy 2030, which includes a specific objective on accelerating digital transformation and innovation in SMEs and start-ups, and by the Industrial Policy and its Action Plan, which frames digitalisation as a cross-cutting driver of competitiveness, particularly in manufacturing. While the policy architecture is relatively coherent on paper, the Smart Specialisation Strategy has not been approved, limiting its role as a strategic reference for SME digital and innovation support. Overall, Kosovo’s framework provides a solid strategic foundation but relies on a combination of horizontal guidance and sectoral strategies, and does not define specific targets or benchmarks to track improvements in SME productivity linked to digital transformation.
On the implementation side, institutional coordination is shared across multiple actors, reflecting the horizontal nature of digital transformation but also increasing complexity. In practice, responsibility is shared between the Ministry of Economy and the Digital Transformation Unit within the Office of the Prime Minister, with coordination also involving the Ministry of Industry, Entrepreneurship and Trade and its implementing agency, the Kosovo Investment and Enterprise Support Agency (KIESA), which delivers SME-focused support instruments. The Agency for Information Society also plays a technical role by providing digital public services that affect SMEs’ interactions with the government. Financial support has expanded modestly through instruments such as the KIESA Public Call for Support of MSMEs for Digitalisation Services 2025 and the Digital Empowerment Initiative, implemented in partnership with ECIKS and funded by the Austrian Development Agency and KIESA, which together provided around EUR 150 000 to 42 firms (MINT, 2024[46]; KIESA, 2025[47]). Beyond grants, the Kosovo Credit Guarantee Fund Start-Up Window also supports digitally oriented firms by guaranteeing loans of EUR 3 000 to EUR 100 000, with guarantees covering up to EUR 80 000, helping young and innovative SMEs access bank financing for digital investments (KCGF, 2025[48]). . While these instruments broaden access to entry-level digital investments, they are insufficient for more advanced digital tool uptake. Consequently, donor-funded programmes play a dominant role, notably the EBRD-EU Go Digital programme, which pairs financial support with technical assistance and advisory services for SMEs adopting digital tools, EU-funded GIZ initiatives, capability-building projects such as ACCESS/ENInGEP and Digital4Business, and the Enterprise Europe Network (EEN KosInn), which provides tailored advisory services on digitalisation, innovation and EU market access through a consortium including Prishtina REA, STIKK and the Kosovo Chamber of Commerce (EBRD, 2025[49]; GIZ, 2024[50]; ADA, 2022[51]; ITP, 2023[52]). Reliance on externally financed, project-based support limits predictability, scale and long-term continuity, and risks excluding smaller or less connected SMEs.
Monitoring and evaluation of SME digital transformation policies remain underdeveloped despite the strengthened strategic framework. While the Digital Agenda defines SME-focused objectives and foresees instruments such as digital support portals, digital innovation centres and financing schemes, implementation has been limited, and no public reporting is available on progress or budget execution. Existing monitoring focuses mainly on programme outputs rather than enterprise-level outcomes, and Kosovo does not yet operate a systematic framework to track SME digital maturity, technology uptake or the impact of support schemes over time. Data collection relies largely on administrative reporting and ad hoc donor evaluations, with few mechanisms to integrate regular SME feedback into policy design. The absence of harmonised indicators, baselines and outcome-oriented evaluation constrains the authorities’ ability to assess effectiveness, identify structural gaps and recalibrate policies accordingly.
1.12.3. Sub-dimension 11.2.: Digital safety
Kosovo has achieved a score of 2.91 on Sub-dimension 11.2, reflecting a relatively solid regulatory foundation for digital safety. However, this legal alignment with EU standards has yet to be matched by operational instruments tailored to SMEs and targeted support measures.
Policy planning and design for digital safety are anchored in a maturing legal and strategic framework. In the area of data protection, Kosovo benefits from a largely EU-aligned regime based on the Law on Protection of Personal Data (2019), which is mostly aligned with the General Data Protection Regulation, and applies to both public and private controllers, safeguards data-subject rights, and establishes transparency and accountability obligations. Oversight is entrusted to the independent Information and Privacy Agency (AIP), which is mandated to monitor compliance, conduct inspections and impose administrative measures. In cybersecurity, the adoption of the Cyber Security Strategy 2023-2027 and the Law on Cyber Security (2023) marked important steps toward modernising the regulatory environment, clarifying institutional responsibilities and strengthening alignment with EU and Council of Europe standards, including ongoing approximation to the updated Network and Information Security Directive. Together, these instruments signal growing recognition that digital trust, data protection and cybersecurity are essential enablers of digital transformation. However, while the legal architecture is comparatively advanced, policy design remains only partially SME-sensitive, and formal obligations are not yet matched by proportionate guidance, capacity-building tools or incentives adapted to the realities of micro and small enterprises.
On the implementation side, practical support for SMEs is emerging but remains fragmented. The AIP has developed guidance materials, compliance checklists, and public recommendations, and in early 2025 launched a digital platform for reporting personal data breaches. Nevertheless, no large-scale SME-targeted schemes exist to support compliance through subsidised audits, sector-specific training or voucher-based assistance, leaving many firms dependent on generic information or costly external consultants. Cybersecurity implementation faces even more pronounced gaps. While Kosovo operates structures such as KOS-CERT, which issues alerts and technical guidance, and benefits from donor-supported initiatives and awareness campaigns, these efforts remain largely project-based and weakly embedded in SME support policies. As a result, SMEs continue to face elevated cyber risks with limited access to affordable, practical and continuous assistance.
Monitoring and evaluation mechanisms for SME digital safety are less developed. AIP monitors implementation of the Law on Protection of Personal Data across the public and private sectors and publishes annual activity reports, but monitoring focuses on general compliance and enforcement rather than on SME-specific preparedness or outcomes. Implementation of the Cybersecurity Strategy is overseen through administrative reporting by the responsible authorities, but evaluation remains largely descriptive and does not assess business-level resilience or SMES’ uptake of the support measures. Kosovo does not yet operate a dedicated framework to track SME data-protection compliance, cybersecurity readiness or incident-reporting capacity. Feedback from SMEs is gathered only sporadically through surveys or donor projects, limiting the authorities’ ability to identify structural weaknesses and recalibrate interventions.
1.12.4. Sub-dimension 11.3: Use of advanced technologies
Kosovo has achieved a score of 2.16 on Sub-dimension 11.3, indicating an early stage of policy development to support SME uptake of emerging and sustainably used digital technologies. While strategic recognition of advanced technologies is increasing, this has yet to translate into operational, SME-oriented instruments at scale.
Policy planning and design increasingly acknowledge the role of emerging technologies, but remain largely high-level and only indirectly relevant for SMEs. The Digital Agenda 2030 identifies advanced digital technologies as enablers of economic transformation and mandates an Artificial Intelligence Strategy, alongside higher-education measures such as a dedicated MSc programme and university courses on artificial intelligence (AI) fundamentals. It also recognises the role of digital technologies in formalising economic activity and supporting integration into regional and EU value chains. However, these commitments remain largely aspirational for SMEs, as they are not translated into targeted support measures and continue to be constrained by structural factors, including uneven digital skills and limited absorption capacity. Kosovo’s Development Strategy and Plan 2030 reinforces this direction by positioning innovation and digital transformation as drivers of competitiveness but remains indirect in guiding SME technology adoption. In parallel, the Development Strategy frames a “digital, circular and competitive economy” as a priority, and the Digital Agenda aligns with the EU Green Deal through references to sustainable digital technologies and energy-efficient ICT infrastructure. Kosovo’s Energy and Climate Plan 2025-2030 signals convergence between digitalisation, circular-economy objectives and SME upgrading, but has not yet been approved by the Energy Community and remains under revision, limiting its role as an operational anchor for green-digital SME support.
On the implementation side, support for SME adoption of emerging and sustainable digital technologies remains fragmented and ecosystem-driven, with delivery concentrated in innovation hubs and donor-backed initiatives rather than in a coordinated, government-led programme. The Innovation and Training Park Prizren provides digital transformation assessments, access to prototyping and testing facilities, and advisory services related to AI, automation and cybersecurity through its digital innovation hubs and digital transformation centres (ITP, 2025[53]). Programmes such as BOOST x Kosovo (Box 1.6) also introduce SMEs to energy-management practices, green business models and digital tools that enhance resource efficiency (UNDP, 2025[54]). The Innovation Centre Kosovo, alongside other hubs such as STIKK Tech Park Prishtina, UBT Innovation Hub and Venture Up, complements these efforts by providing training and incubation in emerging technology fields, mainly reaching start-ups and digitally advanced SMEs (ICK, 2025[55]). EU-supported mechanisms such as the Enterprise Europe Network Kosovo Innovation Consortium (EEN KosInn) further offer brokerage and technology-transfer services linking SMEs with European partners (EEN, 2025[56]). Financial support for sustainable digitalisation remains limited and dispersed, with no dedicated instrument integrating digital and environmental objectives for SMEs. Instead, support relies on a mix of general digitalisation schemes and green grant or credit lines, including the Clean Energy Grants Scheme implemented by KIESA with the Luxembourg Development Agency and donor-backed facilities such as the European Bank for Reconstruction and Development’s Go Digital and SME Go Green programmes (KIESA, 2025[57]); (EBRD, 2025[49]; 2024[58]). Delivery remains largely project-based, constraining SMEs’ progression toward deeper, productivity-enhancing and energy-efficient adoption of advanced technologies.
BOOST x Kosovo, implemented by UNDP Kosovo in partnership with the Innovation and Training Park Prizren, helps small and medium enterprises (SMEs)integrate sustainability and digitalisation into their business models. Launched as part of United Nation Development Programme’s global BOOST platform, the Kosovo edition focuses specifically on strengthening SMEs’ resilience, green innovation capacity, and ability to adopt technology-driven solutions that support environmental performance.
The programme combines training, mentoring, and financial support to help SMEs translate green and digital ambitions into concrete business improvements. In its first edition, 50 SMEs were selected to participate in an intensive acceleration cycle covering 4 core modules: 1) green transformation, 2) tech and digital transformation impact measurement & management, and entrepreneurship & business acceleration. These modules provide firms with practical guidance on energy management, resource efficiency, circular business models, and the integration of sustainable technologies into day-to-day operations.
Following the training phase, 15 SMEs were awarded grants of around EUR 20 000 each to scale the most promising green or digitally enabled solutions. Supported projects ranged from introducing renewable-energy systems and energy-efficient equipment to developing digital tools that reduce resource consumption or improve environmental monitoring. However, the complete impact of the initiative on SMEs and their uptake of more sustainable digital practices is yet to be seen.
Source: UNDP (2025[54])
Monitoring and evaluation of SME uptake of advanced and sustainably used digital technologies are, on the other hand, not yet developed. The absence of an approved and operational Energy and Climate Plan further limits the ability to track outcomes related to energy use, resource efficiency and environmental impacts of digital investments. Kosovo does not yet operate a dedicated SME-level framework to monitor the depth of advanced-technology adoption, sectoral and regional diffusion, participation in support schemes or the environmental footprint of digital technologies, thereby restricting evidence-based adjustment of policy instruments.
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← 1. This includes the EBRD’s Sustainable Reboot SME Programme, aiming to help Kosovo’s SMEs recover from recent macroeconomic challenges. In 2024, the Bank extended a EUR 5 million loan to Raiffeisen Leasing Kosovo, as well as EUR 8 million to ProCredit Bank Kosovo for on-lending to SMEs (EBRD, 2024[59]).
← 2. Applicable to firms with a turnover below EUR 1 million or fewer than 25 employees.
← 3. One key provision of the amendments is the introduction of stronger supervision and control mechanisms for bankruptcy practitioners, including steps toward establishing a Chamber of Bankruptcy Administrators under the oversight of the Ministry of Justice. This brings the profession in line with other regulated legal fields, strengthening accountability, professional standards, and consistency in case handling, which would also benefit SMEs through faster, more transparent procedures. Reforms also modernise the asset-sale system, enabling sales through public auctions to maximise value, an important factor for creditor confidence.
← 4. Pre-packaged reorganisation is designed to be swift, with an automatic stay extendable for up to one year beyond the initial six-month negotiation period. The simplified SME reorganisation procedure is expected to take just 90 days.
← 5. The Action Plan for the Strategy for Industrial Development and Business Support 2030 foresees total budget allocations of approximately EUR 29.45 million in 2024 and EUR 19.47 million in 2025 across measures related to SME upgrading, innovation, certification, digitalisation and industrial competitiveness (Kosovo Ministry of Industry, Entrepreneurship and Trade, 2023[21]). In addition, KIESA reports supporting 308 enterprises in 2024 through grant schemes, for a total committed value of EUR 7.3 million, covering machinery upgrading, innovation, certification, ICT and related support instruments (KIESA, 2024[22]).
← 6. Dimension 6 has undergone significant structural and methodological changes to reflect the emergence of new policy instruments supporting access to bank finance, the diversification of financing instruments available to firms, and the increasing policy emphasis on monitoring, evaluation and effective implementation. These changes were also introduced to ensure closer alignment with the latest OECD and EU standards and good practices in assessing access to finance policies.
As a result of these changes, scores from the 2022 and 2026 assessment cycles are not directly comparable. However, to preserve the benchmarking nature of the exercise and ensure analytical continuity, the 2022 scores for Dimension 6 and its sub-dimensions were recalculated using the 2026 assessment framework and structure. This enables an illustrative assessment of score evolution between the two cycles and allows the 2026 scores to be used as benchmarks, subject to the limitations arising from the revised structure and methodology of the dimension.
← 7. The original 2022 Dimension 6 score calculated using the previous methodology was 3.37.
← 8. The original 2022 bank finance score calculated using the previous methodology and comprising 2022 bank finance thematic blocks was 3.12.
← 9. In Kosovo, searches in the electronic Pledge Registry System must be made from a user account with sufficient prepaid balance, as set out in Administrative Direction No. 16/2016. Article 19 fixes the Pledge Registry fees at EUR 0.50 for a search by identifier, EUR 0.20 for a search by document number and EUR 0.30 for a systematic “tree” search. Each Pledge Registry Certificate (confirmation of registration or search result) costs EUR 0.40, and there is no monthly fee for maintaining a user account. Under Article 18, user account owners who provide Public Search Services may charge clients a public search service fee of up to ten times the underlying search fee plus EUR 0.10 per printed page.
← 10. The original 2022 non-bank finance score, calculated using the previous methodology and comprising the 2022 non-bank finance thematic blocks, was 2.98.
← 11. The thematic blocks “Financial literacy” and “Microfinance institutions” were part of different sub-dimensions in 2022. Their underlying scores remained unchanged; they were simply recalculated using the methodology of the 2026 edition.
← 12. See (Central Bank of Kosovo, 2025[33]) for more details.
← 13. Based on the information received from the government of Kosovo, the list of active incubators is: the Innovation Centre Kosovo operating in Prishtina; the STIKK operating in TechPark Prishtina; the MakerSpace operating in ITP Prizren; the Kosova Innovation Hub operating in Vitomiric; Venture Up operating in the University of Prishtina; regional innovation and entrepreneurship centres in Prishtina, Mitrovica, Ferizaj and Shtime; the University of Business and Technology Prishtina Innovation Hub operating in ITP Prizren; the House of Innovation operating in Istog; the Regional Incubator for Social Entrepreneurs operating in Pristina; the Social Business Incubator Foundation incubator operating in Mitrovica; and the incubator at the Haxhi Zeka University in Peja.
← 14. See WeBalkans.eu (2025[60]) for more details.
← 15. See European Commission (2025[61]) for more details.
← 16. See AIPPI (2024[62]) for more details.
← 17. Although set as key indicators within the Industrial Development and Business Support Strategy, these are not explicitly defined.
← 18. In November 2024, the constructions for a green industrial park in Drenas started with an investment of EUR 7.7 million (Ministry of Industry, Entrepreneurship and Trade, 2024[42]). Spanning 36.5 hectares and expected to host around 50 manufacturing and processing firms, the park is designed to enable industrial symbiosis for green innovation through renewable energy access, modern waste-management facilities, and other sustainable infrastructure. The park is expected to be operational in late 2027.