Abstract
Surveys have been conducted all over the world among small business owners to identify some of the main obstacles that impede the sustainable operation of businesses. The majority of the owners have indicated a lack of finance as the main stumbling block to doing business in a way as to assure continued growth. This is especially notable when considering the central Eastern European region with its underdeveloped capital market. Funding SMEs with microfinance loans, especially in developing areas such as Kosovo, is one of the major strategies undertaken to enhance the expansion of the existing businesses and improve their performance. Purpose: The purpose of this paper is to review the presumable impact and crucial role of microfinance institutions on the development of SMEs in Kosovo. Methodology: The methodology is based upon a descriptive approach whereby a comparison is made between different reports, papers, journals and other literature on the subject.
 Findings: According to the available statistical and financial data, the benefits of microfinance are multiple and the promotion of microfinance and the availability of microcredit or small loans to SMEs in Kosovo has been shown to succeed as a solution to meltdown problems with working capital.
Highlights
Addressing the overall value of SMEs and the challgenges associated with creating sustainable business is of great importance, especially within an emerging market, to assuring and accelerating sustainable development and economic growth
These are based on the assumption that this potential poverty-reducing tool might as well undermine the attempts to bring sustainable economic, social development and poverty reduction (Bateman&Chang, 2009), since microfinance institutions do not care to finance SMEs unless they can provide collateral to secure the loan (Ahiabor, 2013)
According to statistical and financial data, the promotion of microfinance and the offering of microcredit or small loans to SMEs in Kosovo have been shown to serve as a successful solution to working capital problems faced by SMEs
Summary
Addressing the overall value of SMEs and the challgenges associated with creating sustainable business is of great importance, especially within an emerging market, to assuring and accelerating sustainable development and economic growth. In developing countries, the majority of SMEs are unable to secure financial resources, while encountering considerable difficulties in obtaining financing from banks, capital markets and other suppliers of credit. This is very problematic in emerging countries, since such sources are highly underdeveloped according to credit sharing information (Beck, 2007, Havie, Narjoko & Oum, 2013). I find the overall analysis of Kosovo’s microfinance sector and its potential impact on the growth of SMEs important, especially since the country is comparable to other emerging markets with similar political, social and economic difficulties that have already been studied elsewhere. The paper presents conclusions that might potentially serve as an approach for further research purposes
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