Credins Invest for the third year in a row is part of the #YouareCredins program, organized by Credins Bank, providing product training and employment opportunities for the most talented students. The program is a recruitment and training program for recent graduate students in economics, law, information technology and economics. This program, which is designed to last 3 months, is a combination of theoretical and practical training respectively divided into 2 phases. The first phase focuses mainly on theoretical training, while in the second phase the candidates will put into practice the knowledge acquired in the first phase. The recruited students will be surrounded not only by the best experts and mentors of Credins Bank and Credins Invest, but also by international trainers who are certified in the field of skills development.
The candidate selection process goes through these stages:
– Online application
– Test development
– Group assessments
– Individual interviews
A success story for the recruitments in Credins Bank, where during the first program #YouAreCredins, 42 students were selected, out of which 36 of them successfully completed this program and today are part of the Credins Bank team. Credins Invest is constantly engaged in programs to help young people by educating, training and recruiting them to start a successful career.
Dear Investors,
Referring to the difficult situation created by Coronavirus in the territory of the Republic of Albania, and in implementation of the measures taken by the Government to prevent the spread of Covid-19, Credins Invest has created the necessary conditions for employee safety and continuity of work related to customer requirements and needs.
We would like to inform you that the activity is being carried out with reduced staff, for the safety of the health of our employees and clients. If you have any questions or information you need, please contact us in advance at: contact@credinsinvest.com.
Browse here the yellow protocol for hygiene measures Covid-19 for Banks and Financial Institutions.
Thank you for your cooperation.
Credins Invest staff!
August 10, 2020
In an interview for the weekly magazine with economic profile “Monitor”, Mrs. Estela Koçi, General Director of Credins Invest answered a series of questions related to the investment market in Albania.
Read the interview below:
Voluntary pension funds have seen, year after year, an increase in the interest of individuals, reflected in the increase in the value of assets, but of course, they remain modest in the overall financial markets. Estela Koçi, the general director of Credins Invest, says that, although the third column is a supplement to a somewhat more dignified pension, but it is not a substitute for the first two columns, it can be stimulated through various fiscal incentives, increasing the interest of individuals to become part of these funds.
1. How has the performance of private pensions been in 2018? How is the trend in 2019?
The voluntary pension market has followed an upward trend for 2018. For several years, this market has been growing by over 30% in asset value and over 20% in number of contributors. This is a very positive indicator. As of December 31, 2018, the market numbers 25,298 contributors and a total asset value of approximately ALL 2.9 billion. The Credins Pension Fund has grown steadily over the years, both in number and in asset value.
At the end of 2018, this fund reached 15,320 contributors or 60% of the market in number, as well as a continuous increase of market share in assets value. When it comes to performance, it is worth noting that individuals are more aware of contributing to a voluntary pension fund, with the aim of maintaining quality of life even at retirement age. The same growth trend has shown the first quarter of 2019, according to the latest market data, published by the Financial Supervision Authority. Regarding the Credins Pension Fund, the increase in the number and value of assets has continued. At the end of the first 6 months, approximately 16,300 members are counted. The net rate of return of the Credins Pension Fund, in the last 12 months, has been around 5%.
2. What factors limit the growth of this market in the country?
Voluntary saving in a private pension fund is the only alternative that every Albanian currently has to add an additional income to the state pension, in conditions when the latter allows only 35-40% replacement rate and when the optimal ratio should be 75%. So the monthly income upon retirement should not be reduced by more than 30%. This method of saving and investing for the retirement age consists of the voluntary payment of contributions, individually or through a professional pension scheme, created by the employer for the employees and their investment by the management companies to increase its value over a long period of time up to at retirement age. The individual who has contributed to a voluntary pension fund is entitled to benefit at the legal retirement age or even 5 years before the legal retirement age, the accumulated amount (contributions + interest from the investment) in immediate form or as a periodic pension.
Although the pension system in Albania lacks the main column, the mandatory private one, and although the individual is left with the burden of filling a gap of 30-40% of the income he must have at retirement age, the number of members in voluntary pension funds is very low, against the potential of about 690,000 individuals declared employed in Taxation. Total fund assets are only 0.11% of GDP according to the latest data published by the OECD, very low compared to other countries (Chart 1).
Although the funds have been operating for about 8 years, according to law 10197 “On voluntary pension funds”, they are very little known and the level of people’s trust is still low. Fiscal incentives are among the most significant and measurable facilities to show that this form of investment is more profitable than any other traditional form of savings. Specifically, according to Article 88 of Law no. 10197, the contribution made by each member to the voluntary pension fund is deducted for personal income tax effect.
Due to non-harmonization with the law “On income tax”, the application of Article 88 of Law 10197, was inapplicable until January 1, 2015, the date when it was reflected in the law “On income tax”, as well as in the Instruction no. 23, dated 9.12.2014, pages 24 and 28 “On the collection of compulsory social and health insurance contributions”, which details how to complete the online payroll. Although after January 1, 2015, the shortcomings of the legal framework for the implementation of the 2009 law were systematized, the implementation challenge remained. Many individuals were penalized, being double taxed, both during the periodic payment of contributions and at the time of withdrawal at the end.
Theoretically, the individual who contributes individually, should submit to the institution where he is employed, the contract of membership in the voluntary pension fund he has chosen, where the contribution is specified, which must be declared as deductible for the employee, before the personal income tax is applied.
But, in practice, the individual faces the institution’s refusal to implement the fiscal deduction of the contribution, which comes as a result of the inability to absorb the entire legal framework, to the point of irresponsibility to implement it. This is another burden left to the individual, who at the end of the day no longer finds it convenient to proceed with the contributions, and the result is that members who regularly make contributions are 50%, while 80% of fund withdrawals are premature. At this point the mission of the voluntary pension fund and the whole model on which it is built falls down.
Whereas, if each employee were part of a professional scheme with contributions from the employer, the infrastructure to enable voluntary contributions and to automate the periodic payment of contributions, would be a considerable and quite tangible facility for the individual. The number of employers who have currently created professional plans is low. Companies consider a burden on their budget an increased expense for employees, in addition to compulsory state insurance. In conditions where membership is voluntary, they simply do not take it as an initiative. The ratio of members-individuals to members from the professional scheme is 70:30. In fact, it should have been the opposite.
A major problem remains the reconciliation of new legal practices with the existing framework. In the new electronic format of the social security declaration for the General Government Units, the fiscal deduction for voluntary pension contributions has been “forgotten” (cited above according to the Instruction no. 23 in force). This created a new stagnation and ease of giving up the application of the fiscal contribution deduction in March 2017.
3. How can you stimulate this market that has more Albanians who are also privately secured?
The spirit of the law on voluntary pensions goes towards incentives for individuals for pension courses, in a different and very flexible way, which today is not possible for Albanian individuals. The third column is destined to remain at these levels, and you cannot claim to solve the pension problem for Albanians. This column, as it is also in place of development, complements the two main columns. Anyway, to push it further, the lower limit for fiscal effect needs to be raised.
The current law has set limits as follows:
The above are limits set 10 years ago, since the law on voluntary pensions was adopted on 10.12.2009. The market, through fund management companies, has been demanding an increase in these limits for years, but to date there has been no change in the law. Also, a strong fiscal incentive would be the exemption of voluntary pension tax at the time of benefit, taxing only the return (interest) from the investment, and not the contributions made over the years.
4. The Parliament has instructed the FSA in the resolution of this institution to make an analysis on the second column. How do you see this initiative and what effects can the second column bring to the pension scheme? How does this column work?
This initiative has been long awaited for years now. It is a fact that the first column or mandatory state scheme in Albania is not self-financing, currently there are more beneficiaries than contributors (employees who pay social security contributions) and the ratio is projected to increase from 103% to 140% in 2040, according to demographic forecasts. The reform of the current scheme to date has been parametric. The conditions of benefit and the formula for calculating the pension have been changed and it has remained 100% based on the solidarity of the generations and the financing from the state budget. It is necessary to have a long-term and sustainable solution to the problems of the pension system in Albania. The second column of the pension system refers to the mandatory private scheme, which has been implemented for years in developed countries, and which in our region is missing only in Serbia and Bosnia. This scheme channels mandatory contributions to private pension funds, where contributions are administered and invested according to a certain investment policy and where the individual benefits from their contributions, plus the return on their investment as an organic supplement to the first column.
While analyzing this initiative of complete reform of the pension system, a concrete and very good news in this regard has to do with the adoption of law no. 29/2019, dated 23.05.2019 “On the supplementary financial treatment of employees who have worked in underground mines, employees of the oil and gas industry and employees who have worked in metallurgy”. The law was approved by the Albanian Parliament, was published in the Official Gazette no. 88, dated 20.06.2019 and is expected to be supplemented with bylaws for its implementation until the beginning of September 2019. According to this law, for employees of 3 categories of difficult professions, miners, metallurgists and oil workers, who belong to the age of under 48, additional contributions of 5% will be paid to private pension schemes, divided between the employer and the employee.
This will enable these categories to benefit from a more complete financial treatment, an additional pension in addition to the state pension. Also, the law aims to cover with benefits before the time of reaching the retirement age, as well as additional benefits over those granted by law no. 7703, dated 11.5.1993, “On Social Insurance in the Republic of Albania”, as amended. This initiative, already concretized, can be considered as the beginning of the second column of pensions, as it will constitute a mandatory joint contribution between the employer and the employee in the private pension scheme for a certain category of professions, where the contributions will be invested according to certain investment policies and thus, their value will increase over the years.
Dear Investors,
In fulfillment of the legal obligations deriving from the law “On Collective Investment Undertakings” and bylaws issued in its implementation, the management company, Credins Invest, has updated the Prospectus of the Investment Fund “Credins Premium”, approved by Financial Supervision Authority, decision no. 91, on 29.06.2020. We would like to inform you that some definitions regarding the terminology used have been added to the Prospectus and it has been reflected the historical performance of the fund.
In the composition of the governing bodies there is a change of one of the members, and the declaration regarding the conflict of interest has been added in the section “Information for investors”. The Risk Considerations detail some of the risks of the fund, and in the Fiscal Treatment section, the tax is determined according to the tax legislation in force. The data sheet of the external auditor has been updated in the prospectus, and in the section “Transfer of individual account” has been added some information. In point ç of the section “Commissions and expenses”, are included the commissions for the transactions performed with the brokers, and the first sentence is added in the last paragraph of the section.
We also want to inform you that the new Law on “Collective Investment Undertakings” and the Law on “Capital Markets” have been adopted, which will create new investment opportunities and pave the way for the development of the Stock Exchange. Under current policy, Credins Premium fund assets can be invested up to a maximum of 10% of total assets, even in corporate bonds or local government units (municipalities). We have not explored this possibility to date due to the lack of trading of these securities in a regulated market such as the Stock Exchange. With the new developments expected to take place soon, the Credins Premium Fund can also invest in corporate securities within the 10% limit, according to the Prospectus investment policy.
The full prospectus can be read electronically on our official website: www.credinsinvest.com
Thank you for your cooperation,
Credins Invest
July 30, 2020
Albanian Securities Exchange, ALSE has launched an online platform for the daily data publication of voluntary pension funds and investment funds. Credins Invest sh.a. and other fund management companies will publish the on a single platform, providing more transparency to the clients. The daily data of the funds managed by Credins Invest can now be accessed every day not only on our official website, but also on the official website of the Albanian Stock Exchange.
July 01, 2020
Dear Investors,
In the framework of Law no. 4/2020 dated 30.01.2020 for the “Automatic Exchange of Financial Account Information”, Credins Invest is committed to fulfill the provisions of the law, and has the obligation to report the required data to each client, whether individual, natural person or company . Credins Invest, as well as commercial banks and financial institutions in the Republic of Albania, must identify the tax residence, identification number and other information of clients for tax purposes and report it to the tax authorities of the Republic of Albania. You must present yourself physically at Credins Invest sh.a. head office, or at any Credins Bank branch, to complete the Self-Declaration Form with your personal tax details.
Thank you,
Credins Invest
June 12, 2020
The voluntary private pension market has outlined rapidly increasing trends from year to year, both in terms of increasing the number of members participating in pension funds, and the value of net assets in the administration of pension funds.
The increase in the number of members has tripled compared to the beginnings in 2011. But the most significant increase has been after 2014. At the end of 2018, the number of members participating in pension funds is 25,298, almost tripled compared to 2014. This trend of increased participation in pension funds indicates a higher public awareness of the potential offered by this market.
In parallel with these high growth rates, the volume of net assets under administration has also increased. Data analysis also shows the increase in total net assets of pension funds. The value of net assets was ALL 2,289 million at the end of 2018, showing an increase of 264% compared to the end of 2014.
Credins Invest manages the Credins Premium Investment Fund, licensed in August 2016, and denominated in Lek. The Management Company itself was licensed in 2011 and also manages the Voluntary Pension Fund “Credins Pension”, with a number of over 15,000 members at the end of 2018, or about 60% of the voluntary pension market.
It is difficult to not worry about the future of your finances with the current situation. It is precisely in difficult
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Many investors may be familiar with the concept that the duration of the investment is more important than the moment of the investment to ensure sustainable profits in the long run. But many investors find it difficult to stay invested when performance changes, an attitude that affects the return on their investment. Credins Premium Fund invests in debt securities issued by the Albanian State or as they are otherwise called government bonds and bonds. These debt securities generate fixed income in the form of a fixed rate called a coupon, a rate which is determined in auctions held periodically by the Bank of Albania. Depending on the economic environment, interest rates can fluctuate both rising and falling from one auction to the next. This rate fluctuation affects the value of bonds and consequently the value of the investor’s investment in the fund. The value of bonds has an inverse relationship with interest rates. When interest rates on future bond auctions decrease, the value of previous bonds investment value increases. The opposite happens when rates rise.
During the periods January 2019 – April 2019 and September 2019 – February 2020, interest rates in the government bond and bond markets had a downward trend, leading to an increase in the fund quota price/investment value. Meanwhile, during the period May 2019 – August 2019, interest rates in government bond markets had an upward trend, leading to a temporary reduction of the fund’s quota price/investment value. These certain volatilities that accompany an investment in bonds can only result in a temporary reduction of the rate of return for the investor. If the investor stays in the fund throughout the maturity of a bond, he will earn a return rate equal to the coupon that is fixed and reinvest the coupon with the market rates that have resulted during the bond time. Let us take an example to illustrate the situation explained above:
An investor who has invested an amount of 20,000,000 Lekë on 31.03.2019 in the Credins Premium fund. During the periods January 2019 – April 2019 and September 2019 – February 2020, interest rates in the government bond and bond markets had a downward trend, leading to an increase in the fund quota price/investor investment value. Meanwhile, during the period May 2019 -August 2019, interest rates in government bond markets tended to increase, leading to a temporary reduction of the fund’s quota price/investor investment value. Let us study the returns of the investor referring to his two different behaviors:
Dear customers,
Based on the situation created in the country and beyond as a result of Coronavirus, the management company Credins Invest sh.a., has published some guidelines for its customers and employees. Referring to the recommendations of the World Health Organization, to prevent the spread of the virus, we have created the necessary conditions for the safety of our employees and the normal activity of work related to the requirements and needs of our clients. In this difficult situation, we seek the understanding and cooperation of our customers to implement the following guidelines. The health of our employees, their safety at work and maximum customer service come first!
Credins Invest Customer Guide:
Credins Invest Employee Guide:
Credins Invest sh.a is following strictly all instructions and decisions of the competent authorities.
For any questions or additional information you need, please contact us at: contact@credinsinvest.com.
March 10, 2020