Topalli, Margerita, Papavangjeli, Meri and Pepkolaj, Agim (2025) Navigating climate change and financial challenges: a study of agricultural finance in Albania. CETEx Discussion Paper Series: Land and Ocean (4). Centre for Economic Transition Expertise (CETEx), London School of Economics and Political Science, London, UK. Full text not available from this repository.
This study explores the interplay between climate change perceptions and financial access in Albania’s agricultural sector, emphasising the critical challenges faced by farmers in adapting to climate variability. Agriculture is a cornerstone of Albania’s economy but faces growing climate-related risks in the form of erratic precipitation, extreme weather and soil degradation. Simultaneously, financial barriers manifesting as high borrowing costs, strict collateral requirements and limited availability of tailored financial products constrain farmers’ capacity to invest in climate-resilient practices. Using a mixed-methods approach, we examine both supply- and demand-side dynamics in agricultural finance to understand farmers’ and agribusinesses’ perspectives on climate risks and financial accessibility, and the role of financial institutions in supporting climate change mitigation and adaptation. A comparative analysis with other Western Balkan countries identifies best practice to enhance Albania’s financial inclusion and resilience. While climate risk awareness is high, financial constraints remain a significant barrier. Targeted interventions can improve access to credit, transparency and efficiency in agricultural finance. These include climate-smart financial products, green loans, expanded insurance schemes, improved land tenure, streamlined EU funding and the integration of digital financial services such as mobile banking, fintech solutions and blockchain-based land registries. Addressing the structural challenges – weak farm structures, poor land tenure and limited market access – requires strengthened infrastructure, land consolidation, financial inclusion and policy alignment with climate goals to boost sustainability and food security.
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