23378 2001 A~~LIAh RE P )RT 1 ALAI OSMANI1D i-2IFRZEGO4VINAW. 9IACDO FR LAW r S > a ,.;t ., 44 ,..>1.i,!dE SEED'S MISSION To support SME development and improve the overall environment for SME growth and competitiveness in the region. The World Bank Group SME Department MISSION Improving lives by creating opportunities in small business. l ME MEs I -^ ffi $!L Ls L,,s SEED'S MISSION To support SME development and improve the overall environment for SME growth and competitiveness in the region. The World Bank Group SME Department MISSION Improving lives by creating opportunities in small business. TABLE OF CONTENTS Message from Harold Rosen, SME Department Director ................. 4 Message from Mariann Kurtz, SEED's General Manager .................. 5 SEED's Mandate ............. ........... 6 Project Highlights Investment Services ...... ......... 8 Capacity Building ...... ......... 1 3 Business Enabling Environment ...... 1 8 Partnership Highlights ..... ....... 25 Donor Relations ........... ............ 28 Human Resources and Staff Development ..... 30 Contact Information ........ ............ 32 3 and develop profitable lines of business serving local t has been exciting to see all that SEED has been SMEs. With this overall package, SEED has now become HAROLD ROSEN able to accomplish in its first year. a vital part of our overall development efforts in Southeast Europe. The collaboration with the World Bank, SEED has been given an essential mandate: promoting especially on business regulatory environment issues, has poverty reduction through private sector development. been particularly positive and rewarding. But its target region is difficult by any definition, one that belies simple short-term solutions based primarily Under the new World Bank Group SME Department, it on the availability of new external resources. Lasting has been able to build from a strong base, involving results in small business development in the Balkans close interaction with IFC-managed SME Facilities in can only come through a well-conceived, partnership- other regions, and other leading SME organizations based strategy for strengthening local capacity. This is from around the world. This will help it do even more what we at the World Bank Group have been so glad to to help local entrepreneurs overcome today's challenges see SEED begin building in the year since its launch in of globalization, and build enduring, competitive com- September 2000. panies. And by being closely linked to the World Bank's policy work with the reoion's covernments, it will have While it is clearly still early days, all signs indicate that important opportunities to bring the small business per- SEED's integrated package of services for local small spective into ongoing economic reform efforts. businesses is quickly making an important difference. It has already attracted capital for individual model com- I am confident these initiatives and innovations will yield ponies in places that many private investors are reluc- good results, and look forward to seeing the momentum tant to consider, such as Kosovo and Bosnia and continue in SEED's second year. And in closing, let me Herzegovina. This will have a substantial demonstration convey a special word of thanks to all of our donors in effect and pave the way for essential job creation. So this important initiative. We are most grateful for your sup- will its broader efforts at the sectoral level, such as port and look forward to continued collaborative efforts. pulling all sides together to promote revival of key for- eign exchange-earning industries of pre-1991 Yugoslavia such as agribusiness and tourism. This work is complemented by equally critical initiatives to promote better business environments, increase access to Harold Rosen information technology, and help local financial institu- Director tions and consulting companies improve their capabilities World Bank Group SME Department 4 the region. Now that we have a full compliment of hat a privilege to have been a part of SEED's staff in all our offices, programs will be designed and first year! From hiring staff to raising financ- initiated in each country. AARIANN KURTZ ing for SMEs, SEED has accomplished much and made an early and important impact in the Small and SEED's ability to implement so quickly is owed to the tal- Medium Enterprise (SME) sector in our region. ent of our national staff - our most valuable asset! Their understanding of the demands of economic tran- Thanks to the insight of our donors, SEED has been sition combined with their energy are creating opportu- given a wide yet integrative mandate. If we will suc- nities for a new class of entrepreneurs. These young ceed to facilitate increased investment and employment professionals are sure to be leaders in both the private in SMEs we cannot ignore the challenges in the busi- sector as well as the institutions and organizations that ness environment. Likewise, competitive and sustain- make up the infrastructure of a market economy that able small businesses need to be able to get advice, fuels the growth of vibrant, sustainable small business- support and advocacy from local service providers. es. It is with the greatest respect that I offer my thanks SEED's programs are designed to address all three to our team for their efforts this year. needs through practical and tailored initiatives. Thanks also go the SME Department and our col- In our first year, SEED appraised some 70 companies leagues in other Project Development Facilities for their and raised over DEM 4.3 million in financing for seven endless support and encouragement. And of course I of these firms. SEED provided training and assistance thank our generous donors both for their financial sup- to over 140 consultants and 45 small businesses, and port and their willingness to engage in thoughtful dia- undertook 11 interventions aimed at improving the poli- log that helped us shape our programs and achieve cy and operating environment for entrepreneurs. success. Many of SEED's programs were launched in Bosnia and Herzegovina (BiH), the home to SEED's headquar- ters. During the year, SEED has opened and staffed its offices in Macedonia and Albania and has opened Mariann Kurtz project field offices in Banja Luka and Pristina. Many General Manager programs started in BiH were tested and revised SEED before we began a roll-out of these initiatives across 5 SEED 'S SEED is the newest Project Development Facility launched by and post-investment needs. In all cases, SEED works in con- the World Bank Group Small and Medium Enterprise junction with local service providers to assist its clients. Such MANDL ATE i Department. SEED officially launched its operations in services include: September 2000 with a focus on Bosnia and Herzegovina, Albania, FYR Macedonia, and Kosovo. In Spring 2001 its * Setting up accounting/financial information system donors decided to expand SEED's mandate to include the * Management training Federal Republic of Yugoslavia (Serbia and Montenegro). * Management information system * Financial management Set up with a five-year mandate, SEED serves both local SMEs * Trade finance directly and other organizations that support them, while also * Export marketing and procedures working closely with the World Bank Group and other institu- * ISO accreditation tions to improve the difficult business environment in these * Preparing for a second and third round of financing target economies. SEED provides tailored, enterprise- and * Project implementation organization-specific technical assistance, capacity building . Market development programs, training courses, and research/policy interventions. Capacity Building To implement its mandate fully, SEED provides enterprise-level investment services, capacity building The vast majority of SMEs in Southeast Europe have been of enterprises and institutions serving shielded from modern market economies and are at a disad- _. :; -- 2 :J5 e*O osbe . company with appropriate investors Bank Group SME ; FYR .t and financiers immediately. For Department presided TiranA~ MACEDONIA <- (X>TironA AaoN1 j those SMEs that need to strengthen over the ceremony ..S. ^.. ^ their performance, SEED will assist and the kick-off meeting RALBANIA ** in that development prior to seeking with donor representatives. SEED's management team financing. presented the strategy and targets for initial operations and reviewed pre-launch activities such as sector studies SEED offers a variety of company- and SME mapping activities in BiH and Macedonia. 6 . - {, ^, . level services to support both pre- * Partnering with local associations of business owners and * Supporting legislative and tax reform benefiting SMEs SEED'S helping them expcnd and function more effectively and * Reaching out to lenders of municipalities to support local eco- MAN DATE independent of donor support nomic development programs targeting SMEs * Imp ementing training and technical assistance programs * Organizing and disseminating business informnaton that for local business service firms (cccounting firms, small can assist SMEs in identifying new markets, understand business, law firms, auditing firmrs, management informa- and comply with local laws and regulations, and learn tion firms, general consultants and the like) about new products, production methods, and technology. * Implementing SME training programs to enhance SEED has developed specialized websites including competitiveness Southeast Europe Business Network (www.SEEBIZ.net) and * Sharing knowledge among SMEs and SME service the Balkan Herba Business Forum (www.balkanherbs.org). providers through in-person "business roundtables, Promoting regular dialogue between local business repre- and Internet-based exchanges sentatives and government * Promoting the development of women-owned/operated business through targeted support for women business The countries served by SEED are rich with donor funds COMMERCIAL associction development aimed at economic reform and SME development. In this DISCIPLINE context, SEED is ever minaful of its role to fill assistance Business Enabling Environment gaps through practical and tailored progromming. SEED Through its services, SEED is To help make the business environment for Balkan SMEs more has developed a set of filters to help it screen and choose trying to create a value rela- simple, supportive, predictable, and transparent, SEED is currently: its interventions. tionship between its clients and local Business Development Service (BDS) providers. SEED also recognizes that people In order for SEED to serve its mandate and add the greatest Does SEED have or can it source the necessary expertise pay for what they value. To value, it is critical that SEED's teams contribute to an overall, for the project? that end, SEED charges for all integrated strategy of assistance. In order to focus SEED's its services, except those "public mandate across the programmatic targets, the management * Partnership Potenfial: Does the target client want the good" activities aimed at team has developed a conceptual framework to assist in assistance of SEED? Will it be willing to engage with improving the business envi- identifying specific projects and opportunities for intervention: SEED in a client relationship that includes long-term ronment. sharing and analysis of company/organizational data This framework employs a number of filters that are applied and performance? Without a willing commitment to Endorsed by SEED's Board of to potential clients and projects. SEED's management team partnership, SEED interventions will have limited impact. Donors, SEED's goal is to price uses this analysis to determine and shape appropriate SEED its services at commercially interventions. * SEED Niche: Can the need of the potential client be viable rates according to local met by another existing program or project? Would market conditions. Fees are * Sector: Do the potential clients come from or serve a SEED intervention be a duplication of efforts? Can SEED established on a sliding scale sector that is hign priority for investors or policy-makers? add unique value? with the ultimate goal of 100% Identification of target sectors will be ongoing and cost recovery (including a profit informed by cooperation with investors (EBRD, IFC, * New Opportunity: Perhaps the potential client or inter- margin) against local costs. venture funds, and active donars such as EU, USAID, vention does not fit one or more of the other filters but This structure of fees and cost GTZ, British Know-How Fund, etc.) represents a cutting edge opportunity worth exploring. recovery will help create sus- This filter serves as an overt and ever-present reminder tainable local-market based * Scope: Is the scope of potential intervention with the that all filters must be continually reviewed and updated. services to supplant these potential client within the means of SEED? Is the scope It also will help us identify useful pilot projects that may offered by SEED and other too big or too smal for cost/resource effectiveness? have replication value in the future. donors in the long run. 7 .~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~_______________ 7 PROJECT INVESTMENT SERVICES HIGHLIGHTS SEED actively tries to match SMEs with appropriate investors and financiers. SEED does NOT make investments, rather SEED serves as a deal-moker. SEED interventions cut transaction costs for both the SME and the investor. SEED interventions build confidence in the market for increased investment in the SME sector. During its first year of operations SEED conducted initial appraisals of 70 SMEs and completed 13 Internal Enhancement Plans designed to help SMEs improve their current operations. Additionally, SEED delivered two Investment Plans and referred six others directly to lenders and investors. Cumulatively, SEED's efforts resulted in DEM 4.3 million in investments for seven SMEs. Highlights of SEED's work with Investment Service clients follow. SEED has developed a number of products to assist SMEs in various stages of development and com- Albania: Expanding a Private School petitiveness: SEED is supporting the development of the private education sec- 1. Initial Appraisal tor with Inkus, a private high school and training center. Inkus, Initial Appraisal is a brief document stating key information on the company, the prosed project and owned by Edmond Hoxha, is headquartered in Tirana with two potential SEED intervention. Its purpose is to provide the rationale for SEED's intervention. The Initial branches in other towns, one of which is exclusively for adult train- Appraisal also contains a proposed timetable, resource allocation and potential cost recovery of the ing. initial operations began in 1996, focusing on foreign lan- project. SEED's management uses this document to determine whether or not to undertake a project. guage training, computer science, and secretarial work. Inkus has 2. Partnership Agreement (PA) since expanded into public education by opening a four-year high 2. Partnership Agreement (PA) ~~~~~~~~~~~school and now has 86 students, 67 in Tirana and 19 in the other The Partnership Agreement creates a contract between SEED and the Company. It details the work bches. S tudents , payiamonthayntuitionnfe e ofS 0 n plan and commitments made by both the company and SEED. The Partnership Agreement demon- branches. Students pay a monfhly tuition fee of US$150. Inkus strates the Company's willingness to invest resources -- people, time, and money in the form of fees -- employs 19 staff, 11 of which are full-time. in its own development. The school planned to raise $150,000 to pay the balance of a 3. Internal Enhancement Plan (IEP) sale/purchase agreement for the main building in Tirana. Inkus' SEED assists the Company in analyzing its current situation and determining / prioritizing the appropri- owner, Mr. Hoxha, has already repaid $150,000 out of a total ate actions to improve internal management systems. SEED's recommendations focus on systems and price of $300,000. mechanisms that can be implemented in the near term such as working capital management, MIS, cost analysis, and quality/environmental certification. SEED helps the Company identify the resources it SEED helped the school improve financial operations and pro- needs to implement the IEP including members of its own staff, local consultants, SEED staff, and inter- duced an IEP for refinancing the debt. The American Bank of national experts if required. Albania has agreed to provide financing based on the IER 4. Investment Plan (IP) Following the implementation of key recommendations in the IEP SEED assists the Company in design- ing an IP for the Project. The IP provides pro forma financials of the proposed project, gauges the receptivity of potential investors and their likely requirements for equity purchase, loan pricing, maturi- ty, security, support arrangements, and other financing features. 5. Marketing the Investment Plan SEED will market a company's IP to a targeted group of financial sources on a commercially reason- i. able efforts basis. Investment negotiations with the financial partner are responsibility of the Client. SEED will provide services to its clients to help prepare them for such negotiations. 8 Computer science students in Inkus's modern facilities in Tirana Investment Services Projects - Fiscal Year 2001 Cmp.|ny Sector Descripfion Country SEED interventions R Rm|rks c E No. RCB Ff. IEP P (DEM) (DEM) DEM raised 1. Inkus School Educcition Private high school and adult training center Albania yes yes yes n/a 400,000 400,00 closed 400,000 New PA on CB likely 2. AB Techniks Construction Mechanical, electrical and hydrotechnical BiH yes yes yes 3,100,000 500,000 open EOI 2 banks now analyzing Enomeering des in and construction. 200 workers. ._, 3. BAMCARD Banking/F1 Start-up FT infrastructure for credit card BiH s 750,000 open EO_ 2 banks now _ ___ kns_ (credit cards) transactions and services to local banks. yes yes yes 3,452,000 anayzing 4. Fratello Agribusiness/ Frozen foods processing and distribufion BiH 2 strategic investors Food Packaging center, Banjo Luka yes yes yes 400,000 40D,000 closed EOI idenfified, 2 VC funds ____________ _analyzing 5. ilidz,onski Agribusiness/ Mineral wate and soft drinks production BiHln 2.~0~ DEG will disburse in ' Diijmant Miness/ wate yes yes yes n.. 2,400,000 2,400,000 open 2,4e0,000 August 2001 6. Klas d.d. Agribusiness / Baked goods/grain products. 850 employees. BiH Kios onalyzing IEP Food industry Plan to expand with 3 new product lines. no no y n.. 2,500,000 clos no. fincings/ market study 7. VCiM Agribusiness Tomato grower in S. Herzegovino to establish BiHy VCtM to implement IEP, _ _______ lamoe oaricultural cooperative. no yes n.a. open n.o, nwert to SEED 8. Vokic Trade Agribusiness Retailer to establish production of pickled BiH Vokic to implement IEP, ___________ vegetables and fruit/vegetable products. yes no yes n.a. - open n.a. revert to SEED 9. Whitefield IT PC/ICT equipment producer/distributor. To BiHl WF using IEP to market Computers launch ink-cartridge recycling facility. yes no yes n.a. 7,000,000 open n.. its own IP 10. Mashinomont Industrial Produces high-quality flat glass processing Macedonia Machinery machinery (only in country) and Rat glass for SEED provided industry table tops / beveled mirrors. (IFC Client) no no yes no no.. n.a.. closed na.. expert to help identify new markets 11. Microsom Manufacturing Designs and monufcures machines for Macedonia IEP issues must be met process automation motion control /robotics. yes no yes no 3,000,000 closed no.. n.o. to move to IP stage 12. ABBA Trade Construction Corrugated cardboard boxes producer in Kosovo yes yes n.a. initial 245,000 300,000 n.a. 300,000 direct to credit line 13. ABC Plast Construction PVC doors and windows producer, now Kosovo yes no yes ys 750 000 300OD0 cbsed 300 000 through SEED ________ ________ second lamgest in Kosovo. y y 7 , c , 14. Galonterija Construction Interior decor/construcion, stairs . Plan to Kosovo expand facility, add machinery. no yes n.a. initial 450,000 300,000 n.a. 300,000 direct to credit line 15. Hotel Jakova Tourisrn New, well managed 18-room hotel in Gjakovo Kosovo with bar/restaurant, nicely humished rooms no yes n.a. initial 650,000 300,000 n.a. 300,000 direct to credit line 16. Laberion Agribusiness Start-up Tetrapok fruit juice producer Kosovo yes no yes yes 2,060,000 300,000 Clsed 300,000 SEED Index: Rf.CB= referred to Capacity Building; RFFin= referred directly to Financial Institution; IEP= Internal Enhancement Plan; 1P= Investment Plan; EOI= Expression of Interest; MKT= Marketing in process; * IP in process 9 INVESTMENT Kosovo: Laberion Fruit Juices Credit Unit (ICU), a DEM 15 million European Union-World SERVICES Bank credit line in Kosovo, which Laberion matched with DEM Stort-up company Laberion is planning to produce a variety of 300,000 of its own. The loan was disbursed in May 2001. fruit juices for the domestic market. The company had man- aged to build the factory premises and the required infrastruc- SEED support resulted in a renegotiated contract between Laberion 46 ture to support production. When the company first met SEED, it and TetraPak improving the terms for Laberion. In addition, v had signed a loan contract with TetraPak for the supply of pro- SEED's interventions also led to testing for ground water quality cessing and packaging equipment and needed another DEM and incorporation of a wastewater treatment plan into the overall Al& 44l j w t 600,000 to complete the investment. This project consists of the project design. According to SEED's General Manager, Mariann =I..- purchase of additional equipment, completion of final works at Kurtz, "This is the first import substitution project that SEED has the factory and provision of working capital requirements. SEED completed. We view similar projects to be of primary importance helped Laberion obtain a DEM 300,000 loan from the Interim in our efforts to enhance the sustainability of domestic economies." ~ ^ Bosnia and Herzegovina: S . ~ -i . llidza "Diamond" Sparkling Mineral Water X Ilidzonski Dijamant was established as a family company owned by Jonuz Ikic in early 2000. The company, based in a Sara evo suburb I e!r __ T'dtaPak famous for natural springs, produces mineral water and soft drinks. Import substitution: Laberion's locolly The modern production facilities are located on an extensive site that is produced TetraPak fruit juice owned by the company. Dijamant has a production capacity of 6,000 bottles per hour. The company started its operations in September A 2000, and by the end of January 2001 they had produced 1,200,000 bottles of mineral water and 200,000 bottles of soft drinks. The fully functioning company was a pre-financing services target for SEED, with the bulk of the financing coming from DEG (German Investment and Development Company), who approached SEED to pro- vide assistance. SEED's key focus was on the market as the company pre- pared to ramp up operations for its first summer season. SEED analyzed \ i the company's potential to manage its financial operations efficiently and assisted the company in formulating its strategy toward the improvement of its internal operations. SEED also examined the expansion potential in cur- hl _ rent and new markets. SEED's intervention added value by: a) developing a strategic plan to reach optimal sales levels, b) developing of a detailed financial plan, c) project- ing optimal working capital levels and d) developing a market research study that presented the current market potential for mineral water. In June 2001, DEG approved a loan of DEM 2,400,000. The success of this intervention offers major opportunities for SEED to provide ongoing sup- port to DEG in other projects. DEG already has expressed interest in 10 financing other SEED projects. Dijamant: a model company in Sorajevo Bosnia and INVESTMENT Macedonia: High-tech Mikrosam Herzegovina: x SERVICES Bamcard Mikrosam is one of the leading high-tech companies in Macedonia. It specializes in process automation, motion Bamcard is a newly control and robotics for manufacturing and research labo- established company ratories. It makes machines used for marble, granite and with an exciting mission wood processing, as well as equipment for production of to develop the domestic composite materials like filament winding and impregna- ability to conduct "third tion technology. The company also runs a vending- party processing", clear- machine business and is a national distributor of various ing, settlement and electronic devices and components from prominent manu- switching services for facturers such as Siemens. credit and debit card operations in BiH. A family-owned business established in the early 1 990's in Bamcard is a limited lia- Prilep, southern Macedonia, the company's owners are a for- bility company owned by mer CEO of a large state-owned company and a university 22 legal entities, of professor in industrial engineering and management. The which 1 7 are banks from general manager has both an MBA and a technical back- the Federation of BiH and 5 are local or foreign non-financial ground, while more than 80% of the employees hold a entities. This is the first card processing center of this kind in degree in engineering. BiH. Bamcard aims to provide a generic, transparent payment service for the whole economy that will significantly lower the Microsam's strategic objective is to move into design and transaction costs of services that are currently being provided Workers of IS client AB Technics production of fully computerized routing and milling via Western Europe. Bamcard will be available to all financial assembling electric boxes machines for wood, plastic, metal and marble. Plans are institutions operating in BiH. underway for increasing domestic and international market- ing activities and expanding its production capacity by The project consists of procurement and installation of the card- building a new manufacturing facility for its existing lines processing center, with total costs of DEM 3.5 million. The out- and new developments. The financial requirements for this standing financing required is DEM 550,000. 3-5 year prolect are estimated at DEM 3 million. The com- pany will provide up to 40% of this amount and has asked Bamcard asked SEED to assess the feasibility of the project and SEED to help find and secure other financial and marketing secure financial support. SEED has reviewed the project concept support for the project. and produced an IEP where several issues have been identified, followed up by concrete recommendations to management. Key To assess the project's technology needs and the feasibility suggestions focus on a new pricing strategy, adjustments to soft- of the expansion project, SEED engaged a marketing spe- ware and hardware configurations to accommodate additional cialist and an engineering specialist. A set of recommen- services, and the development of an aggressive pre-operations dations has now been developed and the IEP has been pre- marketing campaign. Following implementation of these recom- sented to the company. mendations, SEED finalized the IP, and two financing sources n have been identified. -, U-,1 INVESTMENT Consultancy Program * Consultancy Network Establishment: Development of a SERVICES SEED bronding policy to identify specific consultancies that In early May, a survey was conducted on the local consultancy serv- can deliver key SEED products, such as IEPs and IPs. This ices available in Macedonia. The survey was designed to deter- will enable SEED to build local capacity, create role mod- mine the skill base existing within the sector and potential to estab- els for other practices, and extend our reach in providing lish a consultancy network to deliver SEED investment services. The services to local enterprises. survey revealed that many consultancy practices have good techni- cal skills but operated with poor internal management systems and The Consultancy Network was formally launched in Macedonia in no real marketing strategies, aside from those specializing in donor June 2001. Twenty-six consultancies tendered to join the network. projects. Additionally, no real effort had been made to persuade A shortlist of seven consultancies participated in a week-long train- SMEs of the potential benefits of using consultants. The lack of ing workshop and selection process. SEED will sign Partnership marketing was hampering the growth in demand for management Agreements with three of these local consultancies. consultancy while poor internal management threatens to lead to underperformance in both project delivery and profitability. To Training will be provided by SEED staff on the methodology of address these issues, SEED has identified two broad strategies: IEPs and IPs, including standard software packages and other tools developed to underpin the work. We expect to see Capacity Building: An enhancement strategy focusing extended SEED Investment Services reaching many more on the management and marketing skills of consultancy clients while building sustainable local consultoncv practices practices to assist in improving the demand, supply, and and developing the sustainable market for these services. profitability of consultancy services. SEE . SEE M SEE Web Tool for Entrepreneurs SEED has launched the SEEbiz.net (Southeast Europe Business r Network). This is a web-based tool designed to provide entrepreneurs - in the region with targeted, sector-specific information. The site is comprised of general SME and sector-specific information and con- tains links to other on-line services for entrepreneurs. The pilot site (developed for the fruit and vegetable processing sector in BiH) was - made available internally in the SEED-World Bank Group Business Development and Public Information Center. ______ SEED has begun a campaign to publicize SEEbiz.net and will revise and - . improve the site based on feedback from early users. SEED will launch the site publicly in BiH in August. Additional roll-outs are planned for FR Yugoslavia, Macedonia, and Albania as the country specific data is assimilated. Key to any successful launch is a good marketing plan and a high level of support to keep the site up to date. SEED is currently developing a major publicity and evaluation program. In addition, SEED is in discussion with two potential partners in the private sector with an interest in developing this site into a commercial business portal. 1 2 CAPACITY BUILDING PROJECT Besides direct assistance to SMEs, SEED is building the breadth and quality of services offered by local providers. HIGHLIGHTS If SMEs are going to thrive, they need to be able to draw upon local professionals for advice, consultancy, and advocacy. SEED identifies and partners with local consultants, chambers of commerce, business associations, and municipal bodies whose roles are to serve the SME sector. This year, SEED provided training and assistance to 142 consultants and to 65 individuals representing 45 SMEs. Also, SEED conducted workshops and seminars attended by 1 19 consultants, SME managers and employees, and representatives of business associations and chambers of commerce. Selected highlights of SEED capacity building activities follow. Capacity Building Partners The participants were introduced to strategic thinking, change Thirteen professional consultants from Albania, BiH, and management, and the process of developing a Strategic Plan. Macedonia, and SEED staff members have obtained greater They applied their newly acquired skills, hands-on, by facilitat- ability to provide support to SME owners and managers in the ing the Strategic Planning process for seven SMEs in BiH. region after completing an intensive two-week training pro- These seven companies now have written Strategic Plans, a gram on Strategic Planning. The training was developed and management tool that these companies never had before. As delivered by two professors of the American College of a result of this Capacity Building activity, these 13 local profes- Thessaloniki, Greece (ACT), one of SEEDs capacity building sional consultants are now qualified to assist businesses in the partners, who also have a consulting practice specializing in region in developing their Strategic Plans, a key asset to the Strategic Planning. success and sustainable development of SMEs. Together with SEED staff, trained local consultants work with BiH compa- nies on their Strategic Plans. Trainees with professors at ACT in Thessaloniki 13 Capacity Building Initiatives (Support to Business Development Service Providers) - Fiscal Year 2001 No. Name of inifiative Country SEED Intervenfion 6 Result 1. Credit Bureau evelopment BiH 4 seminars on credit bureaus' importance and operations for 60 4 days Bureau selling credit reports as of 6/2001. Some 17 banks, 9 BiH commercial banks, courts and others. microfinance institutions, other creditors agree to provide info. 2. UNA Assocaion of women business BiH Facilitated Founding assemblies for the Business Association 60 2 days Business Associafion formed and functioning. owners/managers 3. Unotex Associlion of textile BiH Facilitated Founding assemblies for the Business Association 60 2 days Business Association formed and functioning. entrepreneurs 4. Capacity Building for Associations BiH TA in public, gov't, and member relations, strategic planning, 42 20 Workplans tailored to the interests of each Business Association Canodian Alliance of Mfrs, & Exporters fundraising, service provision to 4 Associations. days have been adopted by the Associafions. 5. Partnership outreach To Business 5 BiH 4 seminars offered to providers with potential to work as SEED 60 2 days Database of potenfial clients formed from which SEED seeks to Service Providers partners in delivering services to SMEs. build skills/capacity to meet market demand for services. 6. OECD Internafional Conference on BiH SEED sponsored participation by UNA (Women's Business 3 4 days Networking with other global, regional women's business Women Entrepreneurship Association) to attend. associations. 7. Brochures: How Do I Stort My Own BiH SEED has facilitated the publication of a short booklet on In progress. Institute to distribute 1000 copies of the publications, Business / Managing SMEs - managing SMEs. SEED brochure answering FAQ for aspiring deliver 8 seminars through Business Associations. Economics Institute-Sarajevo entrepreneurs is attached. 8. Market Survey of Demand for BiH Survey in cooperation with local consultants/foreign experts to Ongoing as of June 30. SEED expects to tailor interventions with Business Development Services identify what services SMEs value most. service providers based on information revealed. 9. Marketing Skills Workshop for BiH Increase skills of business service providers on how to 57 4 days Over 90% of consultants reported that the training was valuable and Consultants _ market/sell their services more effectively and profitably. that they would apply the learned skills. 10. Local Economic Development (LED) BiH Introduced concepts of LED to municipal officials, invited them 55 1 day 8 municipalities expressed interest in participating in the next stage Workshop to apply for further SEED assistance in this area, of the Municipal Development Program. 11. Train-the-Trainer course in strategic Albania, BiH, 9 regional consultants and 4 SEED staff completed the course, 9 10 Local consultants will facilitate the strategic planning process for business planning for SMEs Macedonia designed to teach strategic planning methodologies for SME days- two SEED clients or lead a Train-the-Trainer workshop on strategic consultants. 80 hrs. planning in the next year. 12. Entrepreneurship and BiH Youth BiH With Junior Achievement International, SEED provided expect School Ongoing. Anticipate 300 parficipants per year in Brcko District. financial support for secondary schools to introduce business 300 / year concepts and market economics to students. year 13. Needs assessment for executive BiH Conducting survey in cooperation with local and regional Ongoing, in cooperation with IEDC Bled School of Management, management training. experts to assess market for management training. Slovenia. 14. TA to Unotex (Textile Assoc.) on BiH Sponsored training and TA for textile entrepreneurs with 15 1 day Unotex members gained valuable information about doing business sales to Italy/W. Europe leading industry experts from W. Europe. in W. Europe. 15 Development of Consultant Agents Macedonia Designed competitive selection process for consultants who 30 Selection process is on-going. A workshop to screen potential _ will receive training/TA to function as SEED agents. partners will be held in July. 16 Train-the-Trainer for accountants Kosovo Through SHE-ERA, a local women's business 10 10 Women trainers agreed to provide 4 trainings each to Kosovo associafion/training group, SEED provided training in basic days businesses on accounting in the next year. accoun6ing and internafional accounfing standards. 14 Capacity Building Initiatives (Direct Support to SMEs and Group-based SME Training) - Fiscal Year 2001 45 No. Client Name Country SEED Intervention Result 1. Japet BiH Development of accounting and inventory control software 4 4 days installed in, and used by, 2 SMEs. SEED anticipates many more that can be used by SMEs at a reasonable price. users in BiH in the next year. 2. BiH SMEs & SEED BiH Development of an industry standards database that can be Ongoing, in cooperation with USAID. Database is to allow SEED to used by SMEs to compare performance by industry sector. provide better informotion and odvice to SMEs, leading to higher investor confidence in SMEs; allow SMEs to compare where they ____________ stand amona industry peers on a number important financial 3. 7 BiH SMEs: Whitefield, BiH Led by local consultants trained in the SEED train-the-trainer 23 5 days 7 SMEs have a strotegic plan to be used in development of their Alfaterm, Bostek Machinery, course, this 5 day training helped 7 SMEs develop their businesses. Further, 23 owners/managers have been introduced to Japet, Styrotherm, strategic business plan. Training targeted SEED Investment strategic planning process and have increased its value in the Sirbegovic, Fratello Service clients, by invitation only. management of their company. 4. Fratello BiH 1/2 day workshop on application of proper corporate 1 1/2 day SME is more aware of rights of its minority shareholders and is able to governance . operate accordingly. 5. LRC - Engineering BiH Employed an expert on credit bureaus in development LRC Engineering is implementing many of the proposed (Credit Bureau) economies to review the Credit Bureau's operational plans recommendations. and methodologies. 6. Owners and managers of Kosovo SEED provided two trainings (3 days each) on "What will an 40 6 days 40 companies trained to do basic market analysis, strategic planning SMEs in Prisfina and Prizren international lender want to know about my business." and compilation of historical financial information 7. ABC Plast and Laberion Kosovo Installation of and training on accounting and inventory control 2 SMEs 4 days 2 companies use computer based accounting and inventory systems software. to better monitor and control their costs. Building Capacity of Local Banks "I am very impressed by the quality of the work and the work ethic at SEED," reflected Mr. Cobic. "My work at SEED opened In February 2001, SEED launched a my eyes to the benefits of consulting services for business devel- pilot program aimed at building the opment and the importance of linkages between banks and capacity of local banks in BiH. Adnan companies. Now I am convinced that banks would have a Cobic, a local credit officer at the better quality portfolio if they received more projects prepared Sarajevo-based Univerzal Bank was sec- by SEED and similar organizations. The experience I obtained onded to SEED for six months of hands- at SEED will prove helpful in my future work." on training as well as participation in Adnan Cobic the General Management Program at Mrs. Azra Pjanic, the manager of Univerzal's business banking the IEDC-Bled School of Management in Slovenia. Mr. sector concurred. "I am very pleased that our employee, Adnan, Cobic worked on SEED's investment projects as part of was the first person to successfully complete the six-month train- the investment services team. At the Bled School, he ing course at SEED," she said. 'He will be able to transfer his attended a series of courses in areas essential for under- acquired experiences to his work in the Bank, and in so doing standing SME business. Upon completion of his assign- will be contributing to the development of the BiH economy." ment with SEED, he was assigned to the long-term financing department in Univerzal Banks business bank- With the successful completion of the pilot, SEED plans to ing sector to work on the improvement and restructuring expand the program to include staff from other banks in BiH of Univerzal s loan portfolio. and to implement it at our other offices throughout the region. 15 CAPACITY Training on Lender Requirements Building Business Associations BUILDING for Kosovo Entrepreneurs Business associations are often a source of training and development In FY 2001, SEED delivered two Capacity Building services to SMEs. Associations are a nascent component of the SME sec- seminars in Kosovo, the first in Pristina, and the sec- tor in the Balkans. SEED helped support the founding of two associations ond in Prizren. Seventeen Kosovo SME owners and in BiH, UNA (Women's Entrepreneurship Association), and UNOTEX managers attended the first seminar. The second (Textile Entrepreneurs Association). seminar was organized in cooperation with the Chamber of Commerce in Prizren, and was attend- As new and existing associations also need to develop their capacity to ed by 22 SME owners and managers. Participants serve their members, SEED hosted a series of workshops for business represented a range of business interests including associations with Canadian experts over a three-week period in the first Internet service provider and a third-genera- December 2000. This pilot project was organized in conjunction with the tion candy manufacturer. While those who attended SME Department and financed by a CIDA trust fund at the World Bank. are all experienced business owners and operators, Representatives of UNA, UNOTEX, the Employers' Confederation, and they have limited experience with financial manage- Drvo BiH, (Association of Wood-industry Entrepreneurs), participated in ment and requirements of "western-style' lenders these workshops, which were led by Mr. Greg McDonald and Mr. Mathew and investors. The seminars acquainted participants Wilson of the Canadian Alliance of Manufacturers and Exporters. The with financial management tools and practices that workshops focused on membership development, fundraising, advocacy would assist them in operating their companies work, and public relations. more effectively and potentially qualify for foreign- lender financing. Subjects included: As an output of the program, workshop leaders assisted each association to develop a detailed work plan covering these areas. The overall impact * Strategic Planning and the success of a small of the program resulted in the associations creating and implementing business targeted public relations strategies, improving their ability to represent Agim Camichi receives certificate * Market Analysis and how it can be accom- policy reforms publicly, and in the strengthening of the associations from Jane Mc Neil for completing plished with limited resources through increased membership and financial base. In addition, the the training course * How to use Financiol Statements attendees gained a better understanding of the advocacy process that will _ _ |gto manage a business more effectively assist them in playing a leadership role in voicing SME and industry relat- 4. How to compile a Balance Sheet ed issues to the government. and Income Statement t I ~~~~Te usefulness of projecting company performance. 1 The trainin fmodules were developed and 4 + # delivered by members of SEEDs Financial Management and Investment Services teams. The seminars used case studies and problem 4 sets designed to help those who attended quick- ly apply the techniques to their own companies M and benefit from immediate results. and Greg Mc Donald,so Canadiani Allia nce of Manufacturers and 1 16 Exporters Marketing Consulting Services CPCT BUILDING 0 0 ! l! | | E - ~~~~~~~~~n February this year, more thanl 60 inldividual consultants, |LD| I 18 ! ! | 2 | E,~~~~~~~iH. SEED then organized and conducted four focus grotup workshops whr EDpeentited it madt an it rol as f ffordable Accounting Software~ "Macilitatring buildin the oveal caact of loa business servc providerns. and inlecn poitv chne in; th ui It s rre hatsmal usiessentrprsesintheregon avean enessenvsironent Thes sesion seve as noporuniyt ~~~~~~~~~~~~~~~~facilitateopndialccounting sysem.vThe poviders/manaes arelltFRM 00 as to awsre ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ass need andier fyp ofontn asoftware SEED coul thyoo-fucesflPoih. sestesil oueI.Cs In May,hrdtrenoisue SMEE consutn ____ Provi~~~~~~~~~~~~~dingcomlted an tccrst icainfrtiong o-fr,ldtesm-. 3I.t ing such as ~~~~~~~~~~~foreg Condesadvnulecptanits."priiut ok_-ZPR ;;_,, Itisrae ht mal usnssenerrse i te eio hvea Rparesentathivs hihy_of... . . autmaEDs rsacchounin sytem he owesmangrse iSaraev idnotifiRMAPET0, a itrciewr-_ awroier of prvdr faccounting sofive twr araemenor dothey pos- shop,cessfulingolish could the skillstefor use it. SMEst isanthe dtherroentia torisue multi fronsulteienge proviingttomplethe loand accratier financiallinforato n hosell,e the setwre bse ko lede_ ever, is aastandardlrequirementaof proiders cost ethernaold afund. narw Fity-seefnetirLclonuatsernbutmktnghirevcs edg succntn asystreign lenere s lmtdsiland vetue owpt lsts e of pndrstipants cletook es o t aktterevcst SEED restearchI adtonf t them rketnin Saajv identifiaed JAendo, SEE inercive wontnetrorkihtee-st stoices SEDsafprovider ofaconing cindivetr management tsnn softwar te th eir shop, ct benelr u rinn rgr ofitithirg couldnies aoptersad for gsca usebySE.Wt fheptntnial iformulti-on o nexed.IMrietnce klsfr-nulati sol tefrto ple mansalltins thei lcalprovidemrewa efecivelng toslhotae bsediso knteowl iedge ct ulin ntaie pandi h at~~~~~~~~~~~~~~~~~~~~~~~~~cmn aots reduce price. Fou SEED additiona workhop obn toprhs|hn nwhwo sotAre Alania vesone-haf the sotwseandar rc roi st they ingl affrd. ho-f defeo ine n the aing consltin conultnt lear about maktnhersrie pared syse . JAPED finaned wthe nSEE,tclelatincosts and trainin futu.re le nts, and producto deteromientheir fees.ligproe. |1 fo mlye fteclet hi ucaedatmtdacut provDe otaf aountd ingandcinvnl r managementtann softhare tha tshop, benefiti ng alrortann rgast i hi couldnbes adapedfruse byd Smagers. Wcth the potntnial iformulti-n froms exp rerience- lsfr oslat" sol hefrto pie iansalltins thei locpalie p oroier wasecwivlln toslhotae bsediso knowedgtie cpct uligiiitvspandi h at aredcedpric. Fur EED liets ere bleto urchseoheind k onowhow on Dpast odadiinlwrsoso sotAre Alatia vesone-haf the sotanard pieancos theyini could affrd, ho-t defeo ine thei Loaalconngtanossearnibogtmarkesnateirmsrvice suchd syse. SAEED finaned wthSEED installatincostead training futureseaclins and hrowucto deteromine ther fees.ligproe.1 PROJECT BUSINESS ENABLING ENVIRONMENT HIGHLIGHTS In order for SEED to accomplish its goal of increasing the flow of investment into SMEs, the business environment must be transparent, fair, and supportive. A tremendous amount of donor funds has been invested already into the region to improve the business environment and support economic reform. Too often, however, these pro- grams stop short of the practical steps needed to implement and enforce fully the reforms. SEED looks for opportunities to address these gaps. Most often, SEED's efforts in this regard are in cooperation with other donors in order to extend the reach and impact of their programs. This year, SEED completed 11 initiatives aimed at improving the business environments in the region. Highlights of these activities follow. Country Maps Country Maps are new tools that the World Bank Group's SME Department has developed for analyzing local SME sectors key constraints and identify- ing appropriate responses by local governments and the international com- munity. Among the issues that Country Maps address are deficiencies in the legal structure, administrative framework, and government policies relating to SME development. They also serve as a basis for coordination with donors, the client country, and other institutions. . l F ' j X M e ^ The SME department and SEED have completed Country Maps for BiH and Macedonia. Maps for Kosovo and the Federal Republic of Yugoslavia (Serbia and Montenegro) are underway. A map for Albania will be com- pleted in 2002. The BiH Map presents key development issues and priori- ties for SMEs in the area of business enabling environment, financing, %. \, n L _ ~ ' enterprise support services, and information. Presentations of the Map were made to government and private sector representatives in BiH and culminated in a Business Enabling Environment Roundtable. This round- table was attended by key representatives of the entity and central govern- ments as well as business owners and representatives of the donor com- munity working on private sector development issues. The roundtable also resulted in the formation of three working groups (Business Operations, Financing, and Legal Reform) that are led by government representatives. The Business Operations group is meeting regularly to streamline the business registration procedures. In fact, it has recently received a proposal of donor funding to design and implement a new registration system for BiH. Once finalized, all maps will be available on the SEED website (www. 18 ifc.org/seed). Sectorol SME Distribution SME Share of Economy COUNTRY MAP e% 3 U Med. & Large U Small (summary page only) GDP B o s n iao a n d H e r z e g o v i n a TO=t0e 1,,,nEmployment Bosnia and Herzegovina ~~~~~~~~~~~~Ag 0%0% 20% 40% 60% 80% 100b% Summary of County Facts Defining Veotures; 1997 1998 1999 2000 1. Political and ethnic issues negatively affect economic reform efforts/lack of political ECONOMIC INDICATORS will to make important but difficult economic reforms. ODP Growth 30% 14.9% 12.8% 10% Annua Grawte ofIf3in0Fdrto1% 145% 02% 40% 2. Strong sub-national/weak central governmnent complicates privatization efforts and Annual Rafe of Inflation (Federation) 14% 5% 0% 4% development of common business laws and regulctions. Annual Rate of Inflation (Rep. Srpska) -7% 2% 13% 16% POVERTY INDICATORS 3. Wood processing/forestry, agribusiness, and construction are competitive sectors,and Unemployment Rate -- 37% 37% 42% offer goad growth potential. POLICY INDICATORS 4. Inflation is controlled - currency linked to DM. Degree of Liberalization 5. High donor interest in and commitment to private sector development projects. Banking Sector Medium mproving Tadei Regime Me mproving 6. Labor costs higner than other countries in the region. Trcide Regime -ow mproving Interest Rate -High Steady 7. Regional trade obstructed by ethnic and political tensions. Tax Regime Medium mproving 8. SME competitiveness negatively affected by gray economy and inconsistent application of law and regulations. Business Environment: Difficult, complex, inconsistent legal and regulatory environment is a Business Environment: Harmonize and rationalize business laws especially those affecting result of, and complicated by, political structures/ethnic divisions. Good business legislation cross-entity businesses; simplify registration and other administrative barriers to invest- passed but enforcement poor. Little organized public/private dialogue. ment; promote regular public/private dialogue; provide means for more effective dispute resolution and create means for efficient processing of bankruptcy. Capital: Donor credit lines help to fill in gaps in access to long-term capital (1 -3 years) for SMEs but demand for investment credit of 5-10 years and for amounts ranging from Capital: Improve access to working capital and loans; create decentralized cross-entity $0.5-2.5 million is not well addressed. Efficiency of credit lines administration (disburse- register of secured pledges; catalyze establishment of leasing operations. ment) needs to be improved. Poor access to working capital. Enterprise Services: Through seminars, workshops, and consultations build awareness of Enterprise Services: Few business support centers/organizations/businesses operate, and benefits of business support services. Support development of sustainable domestic con- those that do offer limited training or consulting to SMEs. Limited SME readiness to pay suIting business. Enhance skills of trainers and improve training quality. Support develop- for these services because of traditional donor subsidy approach. ment of independent associations. Information: Little well-organized information on domestic or foreign market opportuni- Information: Liberalize telecom/Internet market; reduce taxes/duties on computer equipment ties. Insufficient information on characteristics of the SME sector and relationship to GDE, to stimulate ICT sector; support dissemination of market and trade information. employment and other macroeconomic factors. BUSINESS Credit Reporting Agency Local Economic Development Program ENABLING for BiH Municipalities Credit bureaus are important institutions that facilitate the ENVIRONMENT exchange of credit information. Without such an agency, Based on extensive research conducted through interviews with 60 it is unlikely that lenders would be able to verify the debt entrepreneurs and officials from 11 different municipalities in BiH, payment history of the potential borrower. With assistance SEED established a Local Economic Development (LED) program. from SEED, Sarajevo-based LRC Engineering established Entrepreneurs and municipalities discussed how they could help each Lake Ohrid, Macedonia and launched operations of the first credit-reporting other in the development of SMEs and a comprehensive list was agency in BiH that gathers and sells credit information. drawn up on the main impediments to the SME sector. Included in this list were problems such as: inspection activities (especially finan- SEED sponsored and participated in three, half-day semi- cial police and tax officials); complicated business registration proce- nors organized by LRC to introduce BiH's commercial dures; lack of transparency in land acquisition process; poor business banks to the concept and operational issues of a credit legislation and lack of enforcement; poor communication between bureau. SEED added credibility to the seminars and pro- private and public sector; expensive mortgage; poor financial disci- vided an international perspective to the discussion by pline in the government; black market activities; and unfair competi- sponsoring an expert in credit bureau operations to par- tion, corruption, etc. ticipate in pre-launch presentations. Workshops were held in Sarajevo, Banja Luka and Mostar. The Credit With assistance from a World Bank LED specialist, SEED organized Bureau began operations on April 1, adding an important two interactive workshops for 30 municipalities, where findings of *, - E; structural component necessary for a well-functioning and the research were presented and discussed. Municipalities were disciplined financial market. introduced to the LED approach, explained the role of the munici- M A C E DO0 N I A pality in supporting the private sector, and provided with two case studies on successful implementation of the LED approach at the The unfortunate instability that emerged in February 2001 had a negative effect on SEED's municipal level. LED specialists also detailed a list of low-budget program then expanding in Macedonia. The deteriorating security situation caused increas- activities that municipalities can implement in order to provide ing restrictions on travel within the country, and on travel to Macedonia by SEED staff and immediate support to the private sector and SMEs. international consultants. This led to the postponement and/or slowing down of many of our programs. Indirectly, the crisis also changed perceptions and priorities of the public and pri- To further support this effort, SEED prepared and distributed a publi- vate sectors. Government was less available to discuss projects and less focused on econom- cation called "Developing Business Opportunities in BiH ic development issues. The private sector was less interested in long-term investment and Municipalities.' SEED plans to sign Partnership Agreements with more focused on solving immediate problems created by the security situation. three municipalities to implement LED activities and serve as demon- stration projects for BiH. These municipalities will invest in their own Despite these problems, SEED was able to support the development of a number of initiatives in development by paying fees for SEED s advice. SEED will use local Macedonia, and we expect to rapidly expand our services once the situation improves. We and regional consultants and partners to implement this work. designed a major survey of SME needs that we were able to partly implement, and will be used to guide our developing Business Enabling Environment work. We started work on the agricultural SEED's partner in this program, the European Commission's Quick pipeline study. We undertook initial work on ICT development and sponsored monthly 4th Impact Facility (QIF) provided a successful module for a municipal Thursday meetings to bring together local investors with projects seeking finance. Finally, we com- I F Q pleted a major survey of existing management consultancy companies, identifying ninety-four dif- LED project that is currently being implemented. QIF is primarily ferent practices. We designed a consultancy development program that will lead to selected local focused on small business development in areas with a significant practices acting as "SEED Consultancy Agents" for Investment Services. By June, we received 26 level of return of displaced persons and refugees. SEED is focusing tenders to carry out this service and short listed seven consultancy practices. SEED intends to sign on other municipalities not included in QIF's program. SEED and Partnership Agreements with three consultancies to begin providing services in the fall. QIF have been able to compliment each other's activities by sharing 20 _ information and cooperating on LED. Tourism Development Supporting the Medicinal Herbs Sector BUSINESS ENABLING SEED took an early decision to identify opportunities in the SEED is committed to help rebuild the once thriving herbal industry once-thriving tourism sector. Since December 2000, SEED in Southeast Europe. Working with bilateral partners such as GTZ ENVIRONMENT has been identifying a number of tourism centers in the (Germany), SIDA (Sweden), and SIPPO (Switzerland), and with vari- region that could become the target of a broad range of ous NGOs, SEED is outlining a strategy for sustainable business in SEED products. These include the development of invest- this sector. ment opportunities, SME training, and related services, the drafting of a local tourism strategy, and the establishment SEED is launching the Balkan Herbal Business Forum, which will hold a of relevant associations and initiatives to catalyze regional meeting in September 2001 in Slovenia. This gathering will public/private sector partnerships. be the first time in recent years that stakeholders involved in this sector will have an opportunity to sit together to map out the future of the Such a complete program can only be undertaken suc- herbal industry in the region. Most leading regional suppliers will cessfully with the fullest agreement of representatives of attend the Forum alongside some of Western Europe's most important both the private and public sectors. SEED has insisted herbal manufacturers and importers. We hope this meeting will help that local interested parties must be willing to invest in create a platform from which to launch a number of long-term initia- their own development. The municipality, restaurateurs, tives designed to redevelop this sector in an environmentally sustain- and hoteliers are expected to contribute to a Tourism able and socially responsible manner. The meeting also should con- Development Initiative Fund before SEED begins its inter- tribute to better donor and private sector cooperation. vention. SEED's first target in this sector was the Albanian seaside town of Saranda. SEED is awaiting further steps Southeast Europe has for centuries been a producer and consumer of from the authorities there in order to continue any inter- medicinal plants and herbal medicines. The varied climate and geog- vention. In the meantime, our criteria have been met by raphy of the region enables a vast array of temperate and the towns of Budva and Kotor on the beautiful Mediterranean plants to be grown. A rich medical and engineering Montenegrin coastline. SEED plans to sign Partnership tradition has encouraged the manufacturing of a wide range of phyto- Agreements with the two towns in late summer. medicines, perfumes and cosmetic products. During the 1 970s and . Sveti Stefan resort, Budva, Montenegro 1 980s, the former Yugoslavia supplied medicinal and aromatic prod- -- < - ucts to a host of leading Western European, American and Soviet com- s . * . panies. Political upheavals in the recent past severely disrupted herbal manu- facturing and trade within the region. Some of the most important medicinal plants are severely endangered due to over-harvesting and lack of appropriate environmental legislation. Through this Forum SEED wants to promote fresh thinking and help reintegrate the regions herbal producers into the mainstream of Western Europe's herbal industry. As a start, SEED has created a website, www.balkanherbs.org, as an information and networking tool for V those involved in the sector. SEED also proposes to fund, together with other donors, a Sustainable Business and Environmental Impact Assessment for this sector to map the supply and types of herbs in the region, examine current cultivation and harvesting practices, and ana- '%. lyze the economic and social impact/opportunities. 21 Business Enabling Environment Initiatives - Fiscal Year 2001 No. Name of init6afive Country SEED Intervention Resuh 1. IBRD Business Adjustment Credit / BiH Collaboration with IBRD to design credit conditional on policy changes to improve IBRD credit preparafion ongoing. FIAS report delivered to governments. With help of FIAS Barriers to Investment Report environment for business investment/ collaboration with FIAS on its report, esp. IBRD, governments are structuring a plan to implement key FIAS recommendations. areas of Customs, Land Acquisihon, Inspection, Taxation. 2. Survey on taxes and fees BiH Examines business taxes and fees for permit and licenses in BiH Municipalifies in Comprehensive report being finalized. SEED anticipates that key results vwill be order to draw comparison for municipal officials and businesses. presented to the press so that the public is aware of the vast differences in costs of doing business in different municipalities. 3. Drafting Environmental Legislation BiH In cooperation with EU's Phare program, SEED provided input on drafting On-going. Laws expected to be introduced to parliament in Fall 2001 BiH by EU Phore environmental laws, especially with respect to SME compliance with sound environmental practices. 4. Environmental Brochure for BiH BiH A businessperson's guide to profiting from environmental protection and safety. Brochure can be used as a reference guide to business operations and the Businesses Brochure provided in English and local language. environmental. Brochure is disseminoted to all SEED clients. 5. Balkan Herbal Forum Albania, Preparation of regional conference on wild herbs business in the Balkans, to focus On-going. Conference will be held Sept 17-19, 2001, Portoroz, Slovenia. Special BiH, on sustainable business practices and draw upon the experiences of select website developed: www.balkanherbs.org. Macedonia, regional and international experts. FRY 6. Municipal Development Program/ BiH SEED interview of 15 municipality mayors and officials and survey over 60 SMEs Development af concise, targeted, and staged approach to LED in selected Local Economic Development (LED) to gauge possible development of LED initiative. Municipality selection done in municipalities. SMEs revealed specific oreas of interest that they felt need to be cooperation with EU's Quick Impact Focility and other donors. improved by municipal governments. SEED used findings to develop its program. 7. Bosnia and Herzegovina SME Map BiH With IFC, SEED finalized the BiH SME Map which presents key development Presentations of Map to Government and private sector representatives led to a BEE issues and priorities for SMEs in the area of Business Enabling Environment Roundtable, formation of 3 gov'tled working groups (Business Operations, Business IBEE), Financing, Enterprise Support Services, and Information. Available on Financing, and Legal Issues for Businesses). The Business Operations working SEED's web site (http://www.ifc.org/seed/). group meets regularly and is working to streamline registrato6n procedures. 8. Legal Review of Important Business BiH Focused on Propery Law, Business Law, Corporate Gavernance, Enterprise Information is used by SEED to make recommendafions to policy making bodies Laws Effectng SMEs Registraton. Available on SEED's web site (http://www.if.org/seed/l. (govemment or international organizations) on legal issues effecting SME development. 9. Macedonia SME Map Macedonia Finalized with support from IFC. Presents key development issues and priorities Map is being presented to government, international organizations and private sector for SMEs in the area of Business Enabling Environment, Financing, Enterprise representatives for comments. Support Services, and Information. Available on SEED's web site: [http://ww'wifc.org/seed/). 10. E-Commerce Workshop Macedonia SEED participated in an internaional SME E-Business Conference and provided SEED planning to follow-up by developing an SME e-toolkit to support business an expert to address the participants. development, investigang with goverment the feasibility of moving the business registration process on-line. 11. Legal Reform of Key Business Laws Macedonia SEED has been working to cultivate relationships with the new government to On-going. Ministry of Economy has asked us to review the governmenfs SME and Development of SME Strategy assist in the reform of key business laws. strategy and provide a legal expert to make comments on a newly proposed leasing law. 22 BDS Demand in BiH The most cited reason for not hiring a consultant is the BUSINESS inability to find one with the skills to fit a specific need. ENABLING In order to build an effective business development services One-third of firms cited cost as a major factor against (BDS) network in BiH, SEED conducted a survey on "SMEs' using consultants but more than half said a lack of funds ENVIRONMENT Demand for Business Development Services in Bosnia and is "no factor." Herzegovina." SEED conducted this survey in cooperation with . 60% of the companies acknowledge a need for consulting Babson College in Massachusetts, USA. The study examined services. SMEs' past experiences with various consulting and training * 81% belong to Chambers of Commerce or other associ- services. In addition, it covered questions about how firms ations, but more than half are "dissatisfied" with the serv- obtain important information, their cooperation and subcon- ices provided. The most frequently used service was the tracting activities, and their interest in business development provision of informotion, followed by trade fairs and association membership. Researchers interviewed managers business linkages. from 130 small and medium-sized privately owned enterpris- es covering four different industries: agribusiness, construc- The survey results demonstrate an existing SME demand for tion, information technology and road transport. BDS and show that SMEs already using BDS are generally satisfied. At the same time there is a need for additional Key information obtained from consulting and training services the survey follows: that provide clear benefits and good value. The strong aware- * 80% of respondents expect ness of BDS among SMEs indi- moderate or rapid growth cates that SEED can focus its over the next three years. capacity building efforts on the * There is a high degree of BDS supply market rather than awareness of a wide range of on educating potential cus- consulting services and train- tomers. As firms often have dif- ing programs. ficulty reaching and identifying * SMEs pay for most services :it_ _ appropriate consultants, SEED they use, except for business may contribute by assessing the development/ strategy services supply side of the BDS market to where roughly half the firms ensure there are no large, obtained the services at no I *_i_ unmet needs. Additionally, the cost. High levels of repeat high level of participation in usage are reported for all L _ business associations coupled services. with the strong dissatisfaction * Most cited the need to fulfill a with their services identifies a legal requirement or their prior role for SEED in educating experience with the service as jmembers about reasonable the leading factors in deciding expectations and in supporting to purchase a particular serv- the creation of new associations ice. For nearly half of the com- and/or enhancing the capacity panies, whether the services of existing ones. A similar study are offered free of charge or will be conducted in all SEED not is not an important factor. countries. 23 BUSINESS SMEs and the Environment FAQ for Aspiring Entrepreneurs i ENABLING SEED developed a simple SEED has developed a brochure targeting peo- brochurie to inform and pie who are considering starting their own busi- 6 ENVIRONMENT help educate SME man- nesses. These aspiring entrepreneurs oire faiced agers about the bottom- with a lot of dilemmas such as what type of line benefits of sound business to choose, what products and services environmental manage- are marketable, what is required by the govern ment. The brochure ment, and many more. This brochure, called addresses the environ- 'They've Made It --Try Yourself!" answers 28 of the most frequently asked mental management and questions of aspiring entrepreneurs. The brochure is a guide that will help assessment processes and them to learn what is needed to succeed in business, and to facilitate the why they are in the inter- beginning of their business undertaking. est of SME managers. SEED will develop Alongside SEED's answers to these questions, five successful BiH business- i .-~~~~~~ brochures specific to each I cbrochuntres specif the regn A men answered these FAQ in their own words, sharing with us their knowl- country In the region All edge and experience related to the establishment and managing of their wfill share a common structure and basic information while including spe- own bus-nesses. cific lega! and regLulatorv information by country. cificlega andreguator infrmaton b coutry.How- did y-ou determinp. the price of your products when you started] The brochure for BiH, entitled "A Businesspersons H Guide to Profiting from Environmental Protection and the business? And now? Safety" was printed and distributed in the local lan- guage and in English. The booklet was distributed "The main factors that influence the pricing of products widely to SMEs banks, partners, NGOsb and gay- and services are market situation, competitors' prices, market ,r,ve ,a,ts t, oiSeinn o anici a's demand, customer preferences, etc. Other elements are the nor- Kr.vice Falls,_iH_ ernment_officials._ mal input costs, costs of business operation and projected profit. You are the one who determines the factors and criteria that will influence the price of your products and services. First of all you have to determine the lowest price (the price that will ensure ; L;ffi_s # - t you break even), which is the minimum that will allow your business to operate with minimal profitability. I can say that it was much easier in the beginning because it was easier to control the entire business operation. Now opera- tions are much more complex, which, as a result, requires a much more complex methodology for determining prices." -lijas Bijelopoijak, Whitefield Computers This brochure will be distributed in September through seminars for univer- -, ~~~sity students, business associations, related NGOs, and through the Office of the High Representative's project called "From Idea to Business." v . -;. - -~ , cSIn addition, we are cooperating with the Economic Institute in Sarojevo to ..s-'.t- o -- -- .,s.--...-. , develop an 11 -chapter guide for existing businesses on successful manage- 24 t< t - . - ment practices, which will be distributed in Fall 2001. PARTNERSHIP HIGHLIGHTS PROJECT SEED looks for opportunities to cooperate with other donors and partner organizations in the region. The follow- HIGHLIGHTS ing are some examples of our efforts this year. A Better Business Climate ticular focus on simplification of business registration in Bosnia and Herzegovina rt and licensing, and more suitable methods, procedures and standards of inspection. The World Banks International Bank for Reconstruction and Development (IBRD) is SEED is working in concert with the World Bank to define pri- moving forward on a Business Environment orities for reform and to ensure the needs of SMEs are fully Adjustment Credit for BiH. The approximately US$40 mil- represented, providing a voice for new and small businesses lion credit is designed to link financing to government policy and business associations operating in BiH, and bringing them reform that will support the entry of new businesses and for- directly into the debate on ways to improve the business cli- eign investment to the market, as well as less intrusive gov- mate. ernment intervention in ongoing business operations. Key issues addressed in this credit are also issues identified by the SME Map as key inhibitors to small business develop- ment in BiH. More specifically, the credit, which is expected to be effective in March 2002, will help support the Government's reform program by pursuing three key devel- opment objectives: (i) improved public-private sector dialogue through better laws and regulations, strengthening business associa- tions, establishing a public sector mechanism for regular dialogue with private businesses, and a more service-ori- ented approach by government for more business- friendly laws and policies; (i i) strengthened commercial legal framework based on improved company laws with broader rules of corporate governance, more modern bankruptcy and liquidation standards and procedures, enforcement of secured transactions, and strengthened court and out-of-court capacity to resolve commercial disputes; and (iii) a material redjction in administrative barriers, with par- 25 PARTNERSHIP HIGHLIGHTS SEED Participates in SME E-Business Conference Training for Women Accountant Trainers An international SME E-Business Conference was organized in December 2000 under the auspices of the Macedonian Government SEED has strengthened a local business asso- through the Ministry of Economy, the National Enterprise Support Agency ciation in Kosovo by improving its capacity to (NEPA), local Enterprise Support Agencies (ESA), and GHK-lnternational offer quality services to its clients. In support (a DFID Know-How-Fund supported technical assistance provider). of the Canadian Co-operation Support SEED staff attended the conference and arranged for the participation of Office's (CCSO) activities in Kosovo, SEED co- Mr. Bert Einsiedel, Professor and Director of the Institute for Professional financed a train-the-trainer workshop for 10 Development, at the University of Alberta, Canada. local accountants. This 1 0-day training course on western accounting terminology The key objective of the conference was to invite and procedures and international accounting a range of e-business actors and specialists standards was conducted through SHE-ERA, a from the government, NGOs, the private sector, prominent local women's business associa- international donors and civil society organiza- tion. tions to facilitate a discussion on the potential 44 r ^ tgrowth of SMEs and the e-business sector in CCSO support to SHE-ERA included financing Macedonia. Participants of the conference were equipment for the training center and cover- representatives from various fields of expertise ing the costs of local staff and accounting and work, including government officials, SME professionals who participated in train-the- agencies, consultants, Macedonian Telecom, trainer sessions. These participants will deliv- local information/computer technology compa- er accounting courses for local entrepreneurs. nies, and academia in related fields. Another SEED joined forces with CCSO by financing conference on this topic will be organized later an international accounting expert to train the this year by eMacedonia, an initiative recently local consultants. Based on SEED's partner- launched by the President of Macedonia. SEED ship agreement with SHE-ERA, each trained will continue to participate and look for opportu- accountant will deliver accounting training nities where SEED's assistance can play a key and consulting services to two SMEs in Kosovo role in the development of this sector. In addi- on behalf of SEED. With the knowledge tion, SEED will develop targeted business portals gained and new training tools, they will con- and expand www.SEEBIZ.net to cover tinue to offer the course to SMEs, both with Macedonian SME sectors in the near future. CCSO support and on their own. SEED looks forward to partnering with these trained accountants as local consultants for its invest- ment-services projects and in delivering other accounting-related training. 26 Albanian Loan Guarantee Facility PARTNERSHIP Development of Industry Sector HIGHLIGHTS The American Bank of Albania (ABA) and IFC signed a Loan Performance Standards Guarantee Facility Agreement in May 2001 to reduce ABA's SME portfolio risk. The total value of the fund is US$ 2.5 mil- Industry Performance Standards are an important lion. IFC has contacted SEED to act as an agent in the tool for providing banks and foreign investors assessment of the proposed transactions and to supervise the with information to help analyze the comparative approved transactions on a semiannual basis. IFC will cover performance of businesses in their local market. all the local costs incurred by SEED while it operates as IFC's Developing these standards in BiH will assist in agent for this purpose. making often difficult decisions about financing or investment and lead to more confidence in SMEs established and operating in Albania are expected to lending to SMEs. benefit greatly from this project. The guarantee transactfon will reduce ABA's risk, and as a result the bank will be willing to In partnership with USAID, SEED is developing give more loans to SMEs in Albania. Acting as agents for such Industry Sector Performance Standards (ISPS) for transactions crectes a great opportunity for SEED to develop SMEs in BiH to be used for comparative analysis. good business relations with a leading financial institution in To respect confidentiality, the financial statements Albania, as well as to form direct client relationships for further were identified on y by SIC (Standard Industrial developmental assistance. Classification) code and the information will be consolidated and averaged by SIC code. There will be a report for each SIC code that represents an average of all companies whose financial statements were included in that code. The ISPS will allow comparison of a company's financial performance to an industry aiverage in the coun- try. The critical measures of comparison are such financial calculations as Current Ratio, Gross Margin, and Accounts Receivable Collection Period. The database for years 1 997 - 2000 has been compiled, and the reports will be published by the end of October 2001. SEED will seek to expand the database by pursu- ing partnership with local banks who may wish to have their SME customers' financial statements included in the ISPS and by inviting its SME clients to include their financial information. SEED will also add to the database as future year-end financial statements are available. Elira Sakiqi of IFC and Lorenzo Roncari of ABA sign the agreement 27 DONOR Donor Participation RELATIONS Below is a table showing the status of donor contributions in the funding of the SEED program as of June 30, 2001. DONOR MINISTRY / AGENCY COMMITMENT (US$ equiv.) DISBURSED Austria FGG 1,000,000 1,000,000 Canada CIDA 1,364,866 1,364,866 Greece Ministry of National Economy 250,000 250,000 The Netherlands FMO 5,000,000 2,000,000 Norway Ministry of Foreign Affairs 2,200,000 2,199,985 Slovenia Ministry of Economy 200,000 0 Sweden Sida 2,130,347 2,125,693 Switzerland SECO 2,000,000 2,000,000 United Kingdom DFID 852,430 286,118 IFC 5,000,000 1,500,000 TOTAL COMMITMENTS 19,997,651 COFINANCING SOUGHT 13,602,349 TOTAL REQUIRED 5 YEAR FUNDING (net of fees) 33,600,000 SEED's First Donor Board Meeting, September 2000 2- 28 - 2 -~~~~~~~~~~~~~ =` I XlFC DONOR Expansion into SME Department Roadshows RELATIONS the Federal Republic of Yugoslavia Members of SEED management joined SME During the Sarajevo meet- _ *'. Department Director Harold Rosen, IFC Trust ing of SEED's Donor Board _ ROMAN I Fund Division Director Uday Wagle and IFC in May 2001, donors J Operations Division Principal Advisor Hany Volvodinq endorsed the expansion of Novi5 Sd Assaud, during an Autumn 2000 'roodshow" to SEED's activities to include 1%, ; P v ........ . key donor countries. The visits were designed to the Federal Republic of D * Betdefl ' introduce donors to the new SME Department, its Yugoslavia (Serbia and SRI f e role, organization and fit within IFC plus its coor- Montenegro). This decision SERBIA dination role across the broad donor community came just one week after INA FED. REP OF on issues related to SMEs. SEED representatives the World Bank's IBRD for- *S.rajevo% YUGOSLAVIA participated in donor meetings and presentations mally admitted the country to donor governments, interested businesses, as a member. SEED's . - potential investors and other donor community expansion to the Federal MON7EN e actors in Austria, the Netherlands, Sweden and Republic of Yugoslavia is 'r oPnr'w j Switzerland. In particular, SEED highlighted key expected to have consider- -orica, Kosovo *- sectors for SME interventions and investment in able impact in strengthen- Skopje the Balkans and solicited input/feedback from ing the private sector, the S F. those trying to do business in the region regard- key source of new job cre- ing obstacles existing in the business enabling ation in the country. SEED has developed a strong package of environment (legislative, regulatory, etc.). products and services for local SMEs, many of which can quickly be rolled out to Yugoslavia. SEED's activities will compliment the reconstruction and development activities of the World Bank The SME Departments website: http://www.ifc.org/sme Group and other multilateral and bilateral donors in the country As of June 30, 2001, SEED had five full-time staff operating in Belgrade. Office premises were undergoing final renovations and are expected to be opened in September 2001. Our staff is work- ing closely with other donor programs, including the EU, GTZ, KfW, USAID, EBRD, and the World Bank to define the best niche for SEED and to ensure complimentary programming. Donors have begun to pledge separate funding for SEED's expansion into the Federal Republic of Yugoslavia. 29 Human Resources and Staff Development We see our staff as our greatest asset and staff development as one of our key goals At the end of Fiscal Year 2001, SEED employed 53 staff across the region. in order to leave behind sustainable service providers to SMEs when SEED exits. Additional staff continue to be recruited. All local hires receive co-terminus con- SEED staff benefit from individual, group, and SEED-wide training and educational tracts and SEED will outsource professional services from key project staff over programs offered by various partners and other institutions throughout Europe, as time, thus creating incentives for them to create private, commercially-based busi- well as those organized in-house by SEED and by the World Bank Group nesses to replace SEED programs. When possible, SEED currently outsources pro- Headquarters in Washington. In addition, SEED staff have benefited from staff sec- fessional services from local consultants, researchers, sectoral experts and finan- ondments and exchanges with its sister facilities around the globe. This year, SEED cial analysts. SEED also is moving forward in developing a high-quality network has enjoyed secondees from the Mekong Project Development Facility and the South of external consultants in each country to extend SEED's reach and its ability to Pacific Project Facility. serve more SMEs. FIRST SEED STAFF RETREAT STAFF LEARN ABOUT BDS INTERVENTIONS From October 3-7, 2000, staff attended the first SEED retreat, held in Budapest. The retreat was led by Marcin Opas and Janusz Syntek of Firma 2000, a successful, pri- A workshop entitled "Design and Implementation of Business vate business support program in Poland. Guest speakers included June Lavelle, Development Services (BDS) Interventions: International also of Firma 2000, Danica Purg of the Bled School of Management in Slovenia, Experiences and Implications for SEED" was held in Sarajevo Andras Geszti of ABN-AMRO Capital, Hungary, and Max Aitken of the World Bank on January 29-31, 2001 for SEED's staff. Groups SME Department. Mr. Alan Gibson and Mr. Rob Hitchins of Springfield Center The retreat provided staff the opportunity to better understand SEED's mandate and delivered the workshop, which focused on a market approach goals and to learn from other SME BDS providers regarding the necessary skills to to enhancing business development services. Case studies best serve the SME market. Staff enjoyed rigorous case studies and daily team build- were used to stimulate discussion and demonstrate experi- ing activities. In all, the retreat provided an excellent opportunity for the members of ences. the newly formed staff to get to know one another better and to become a coherent team. In addition, we had a great time together in beautiful Budapest! Besides SEED staff, colleagues from other Project Development Facilities and the SME Department attended the workshop. Their participation enabled a broader group discussion on the role and priorities for SEED in this area. During the workshop each of these representatives had a chance to share their experiences and views on how PDFs can participate in the development of BDS markets. The workshop focused on the following topics: * BDS market development - why it's important; * Types of interventions in BDS market; *, * Assessing intervention options in the context of BiH; * Monitoring and evaluation of interventions; * SEED's role as an intiator/facilitator in the BDS market. 30 Almir Jazvin and Igor Tutnjevic in a team building exercise at the Budapest retreat SEED's Teams 'ir Albania Staff Macedonia Staff Headquarters Staff From left to right: Qemal Balliu, Doriona Biloli, Arta Doci, From left to right: Zoran Martinovski, Lene Mikkelsen, Anila Basliari, Tomi Papadhopulli, Silvana Rusi, Fatos Natalija Stoianova, Dragon Kolevski, Magdalena Hida; below: Ledia Terpo, Denisa Bilali; not present: So!jakova, Zoran Nikolovski, Ani Markik, Gjorgji Miskovski, Irena Gribizi Afrim Hairedin; not present: Valentina Paskalova Bosnia and Herzegovina Staff FR Yugoslavia Staff From left to right: Alexander Paine, Jasna Arnautovic, Ajila Dizdarevic (BiH team), Jane Mc Neil, Igor Tutnjevic, Samira Sauvage, Samir Besirevic, Mariann Kurtz, Gordana Alibasic, Edin Terzic, Sasa Zoe Miric (BiH team), Goran Zaric, Christopher Miller From left to right-standing: Davorin Pavelic, Amila Dedic, From left to right: Sonja Velasevic, Jelena Avramovic, Ismeta Agic, Adnan Medjedovic, Ajla Dizdarevic, Edin Lana Radulovic, Predrog Matic, Mehrdad Etemod, James Hukic, Dragan Ajanovic, Tamir Mostarac, Ivana Curic, Hellerman, Hans Shrader, Biserka Jevtimejivic-Drinjakovic Adnan Djulic, Iso Abinun, Nerma Karic; sitting: Senada Havic, Azra Delalic, Leila Drognic, Senada Hadzagic, Smiliana Vuletic; not present: Almir Jazvin, San'ela Pasic, Stevo Topalovic, Zoran Dosen CONTACT SEED Headquarters INFORMATION The World Bank Group Tel.: (+387-33) 21 7-760 H. Kresevliakovica 1 9/1V Fax: (+387-33) 217-762 71000 Sarajevo seedinfo@ifc.org Bosnia and Herzegovina Contact: Chris Miller Banja Luka Field Office Belgrade Field Office SEED SEED The World Bank Group Kneginje Zorke 96-98 Vase Pelagica 12 11000 Belgrade, Yugoslavia 58000 Banja Luka, Bosnia and Herzegovina Tel.: (+381-11) 3023-750; Fax: (+381 11) 3023-740 Tel.: (+387-51) 319-680; Fax: (+387-51) 319-683 Contact: Hans Shrader Contact: Stevo Topalovic Pristina Field Office Skopie Field Office SEED SEED The World Bank Group Ulica Makedonija 9-1 1/ll Tirana-str. N-35 1000 Skopje, Macedonia Pristina, Kosovo Tel.: (+398-2) 223-306; Fax:(+389-2) 223-298 Tel.: (+381-38) 549-459; Fax: (+381-38) 549-780 Cantact: Lene Mikkelsen Contact: Arijeta Baruti Tirana Field Office: SEED Deshmoret e 4 Shkurtit, nr 34, Sky Tower 8th floor Tirana, Albania Tel.: (+355-4) 2 405 88; Fax: (+355-4) 2 405 90 Contact: Anila Bashllari 32 www. ifc.org/seed SEED Annual Report 2001 Report Coordinator and Editor Chris Miller Editorial Team Senada Hadzagic, Jane Mc Neil, Erika Paine Photography Mark Fallander, Fuad Foco, Chris Miller, Rob Wright SME Department Support Rob Wright, Luljeta Tola Design, Layout Goran Zavadil for Tirada Saraijevo, Chris Miller Printing Muller, Sara evo EStrEEDIlb f7~~.~~'SoUth1east EuropeI Enterprise Deveoprnont www, if c.org/seed CO-FINANCED BY: ___n F I1+ L L THE THE nernational AUSTRIA CANADA GREECE NETHERLANDS NORWAY SLOVENIA SWEDEN SWITZERLAND UNITED KINGDOM Finance Corporation