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Amid Tangle of Rules, Macedonian Businesses are Starting to Thrive

USAID talks about the impact of the Business Ecosystem Project, implemented by Palladium. The project helps small businesses navigate Macedonia's complex banking systems, reducing dependence on donor and government assistance.

A rich combination of roasted red bell peppers and garlic infused with generous amounts of olive oil, ajvar is the most popular dip in countries of the former Yugoslavia. With such a winning product, it should be easy for Vori — one of Macedonia’s largest exporters of ajvar — to borrow funds to increase production and expand its export base.

However, rigid conditions imposed by banks on small businesses in Macedonia have made it extremely difficult for the enterprises to access loans. This hinders their ability to invest in their supply chain, production, workforce and exports.

According to Jordanka Ristova, Vori’s president, “Foreign buyers dictate production conditions. If a customer wants a special piece of equipment incorporated into your production, you are required to buy it. But the procurement often requires huge collateral and unfavorable repayment conditions.”

To address this problem and other constraints hindering the growth of small enterprises in Macedonia, USAID’s Business Ecosystem Project has engaged 37 financial consultants to help small businesses better understand and navigate Macedonia’s complex banking systems. Working with one such consultant, Ristova was able to negotiate favorable terms.

“I could never figure out the complex banking rules that apply to small businesses,” said Ristova. “With help from the financial consultant, I was finally able to negotiate a loan restructure. We have been able to buy new machinery that we needed to expand to new markets.”

Vori is one of 114 companies that have received assistance in just ninth months from the project’s pool of financial consultants. These consultants have helped companies access $23.6 million worth of loans from financial institutions, resulting in $28.2 million in investment and the creation of 510 new jobs.

The USAID project, which launched in 2017, continues to demonstrate the value added by harnessing financial consultants’ expertise to overcome financial and other business challenges. By helping to create a sustainable business ecosystem, the project aims to gradually reduce the dependence of the private sector on donor and government assistance.

This article originally appears on USAID.gov and was republished with permission.