Not everyone runs a business with a business plan, but it certainly helps to have one
Complex training program helps entrepreneurs receive bank loans to expand their businesses
Challenge
Being a former socialist republic, Moldova has weak business traditions. The vast majority of Moldovan businessmen are novices in free market economy. A lot of small and medium enterprise owners don’t know what types of services banks provide nor can they easily negotiate a credit with financial institutions. Many often fear taking bank loans! As result they miss good opportunities to expand their businesses and prefer to continue on small scale, but in well-known environment. Official statistics shows that from all the loans offered in 2004 less than 13% were provided to the small business.
Initiative
During 2005 USAID BIZPRO supported a nation-wide complex training program focused on “How to write a Business Plan and how to apply for a credit”. The program’s goal was to assist the entrepreneurs in attracting financial resources from the banks. Together with its 14 regional partners USAID BIZPRO selected 262 businessmen who attended 17 instruction sessions. They were provided with individual help from instructors and consultants all geared to help them draw up their business plans. The next step was organizing new trainings on “How to attract financial resources” based on the strength of the business plan.
With up-to-the-minute know-how and ready business plans the entrepreneurs had the chance to meet high-level bank officials for a presentation. “This was the crucial stage in this program.” told a trainee, “It’s not that easy to meet a bank director face-to-face. Presenting your business plan to all of them at a time is an opportunity to take advantage of!”
“Many of us understood during the program that the wolf is not that dreadful. One can deal with bankers.” – Ion Balteanu Craftsmen Association
Result
Almost 50 small and medium enterprises received loans as a direct result of the USAID BIZPRO training program. Other 60 are in the process of obtaining credits. Still, these results are not final, as other trainees are applying for loans right now. The fact that 55 bank officers and directors took part in the program shows that both the entrepreneurs and the financial institutions benefited. Some of the trainees were even being called at home by the bank directors immediately after the business plan presentations to offer them credits.
The major outcome of the USAID BIZPRO’s initiative is beyond figures – the personal connections and the communication bridges within the business community that were built will last long after the final training.
