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SOUTHEAST EUROPEENTERPRISE DEVELOPMENT

2003 Annual Report

For the latest perspective and news on SMEs

SME DEPARTMENTqF WEBSITE:

http://www.ifc.org/sme

For more information on the SEED program

. I SEEDWEBSITE:http://www.ifc.org/seed

For more regional business information in local languages

SEEbizSEEJ Z-?-,-~WEBSITE:

SEED Annual Report Fiscal Year 2003

Report Coordinator and EditorDenis Obarcanin

Editorial TeamAlexander Paine,Jane McNeil, Senada Hadzagic, Benjamin Reno-Weber

PhotographyDenis Obarcanin, Amila Dedic

SME Department SupportRob Wright

Design LayoutGoran Zavadil for Tirada doo, Sarajevo

Printing

Blic.'.Sarajevo

I ABLE ]

Message from Harold Rosen and Khosrow K. Zamani, SEED's MissionIFC Directors 6

To improve lives in our region through SME development by mobilizing an inte-

Message from Alexander Paine, grated consulting and training service that seeks to operate on all aspects of the sec-

SEED's General Manager 7 tor's competitiveniess.

SEED's Mandate 8

Investment Services 9 The World Bank GroupHighlighted: Tigar - Linkages 16 SME Department MissionCapacity Building 18 Improving lives by creating opportunities in small business.

Business Enabling Environment 25

Partnership Highlights 30

SEED Evolves and Embarks on New Direction 31

Donor Relations and Staff Development 32

SEED's Teams 33

Contact information 34

A.

~-' I=

.J Zagreb et-

SEED's vision is: "To become the local partner of first choice *,; ROMAN IA

for Private Sector Development (PSD) in the region by 2005." CROATIA Vojvodinas~~~~ 0~~~z Noyi SadIn line with this vision SEED has defined its strategic objectives as follows: * *i. Increase competitiveness of SMEs in the region %r; .,- . ',-ii. Develop Business Development Services (BDS) markets BOSNIAAND . e'jde*K_ iii. Improve the business environment (BEE) SERBIA

t5 | *' HERZEGOVINA *> SERBIA

Saroievo% AND . -

E _ ?MONTENEGROW - I s ._: X . a~~~~~~~~~~- I

* MONI'ENEGRO . o4 111 >, ., ) n~~~~~~~~~~~~~~~~~~~~~PIP4 IF >

* KOSOVO ,/oo -.1

* a w~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ . .- .11 | , : : -^- SL~~~~~~~~~~~~~~~~~~~Iople \ ....... >

11 I ~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~FYR;| ~~~~~~~~~~~~~~~~~~~~~~~~~~~~T., c,i .1J MACEDONIA:

_ ~~~~~~~~~~~~~~~~~~~~~~~ALB,ANi4^ *

Above: FIPA (Federal Investment Promotion Agency) and SEED market local economicdevelopment initiatives (LED) to international donors and investors in BiH

ALBANIA

ALCRED Food ProcessingAlcred Food Processing (formerly known as Algrec) is a frozen fruit and veg-

etable company operating in Tirana. Alcred represents one of the first clients to

whom SEED has offered its support to raise new financing for working capital.

In late 2001 when Alcred first sought SEED assistance its annual revenue was

S2`' .1 '" and capacity utilization wvas only 12-14%. Since operations were

housed in a government rented plant, the company suffered from a lack of colla-

teral which was proving to be an immense obstacle to accessing bank financing.

Following the successful delivery of initial SEED consultmig services and prod-

ucts, CREDINS, the first private bank in Albania agreed to provide $100,000 to

cover Alcred's immediate working capital needs.More recently, SEED was successful in marketing the Alcred investment plan to Above: ALCRED President accompanied by SEED Albania representatives

CREDINS, which in turn financed 80% of a new flI .OM Alcred investment. These funds were utilized to renovate the plant processing area and ensures HACCP conformity.

All SFED) services are provided to SNIEs for fees.These fees are set to reflect ALCRED's current annual turnover is around f800,000 with a capacity utiliza-

local market condition,. thus creating or stultaining demand for high quality tion of between 40-45%. Given the increasing export driven demand from mar-

local services on a commercial basis. During FY 2003, SEED delivered 65 kets in Gerimianiy. Belgium, Greece and France, Alcred management is already

internal enhalncenienit plaiis and 67 post internal enhancement plans of which: contempleting a possible 1 .5M future product expansion to concentrated fruit

55 were investment plans/investment overviews, 5 were marketing plans and 2 and vegetable powder.

were technical plans. According to Alcred President, Mr. Hasani, "The collaboration with SEED has

46 SEED conipay investment overviews had recei%ed prior financing and an proven to be of great value for the company. The SEED recommenda-

adlirion.il minle of SEEIL)'Y projects were financed for $5.6M. tions have consistently marked the path to our successful performance".

INVESTMENT SERVICES

BOSNIA & HERZEGOVINA (BiH)

Lora - New Management Information System (MIS)-- -.Boosts Efficiency

r -- - ~~~~~~~~~~~~~~~~~~Lora is a trading company fromi Sarajevo, with exclusive distributorship for lead-P4 t -~- t w k - .,ing fast-moving consumer goods. Lora supports more than 4000 customers, has*- 6 branch offices and 50 distribution vehicles around the country. 2001 revenues

were E8.7M. SEED was initially engaged to evaluate a company plan to invest inill X - pasta production. Prior to the investment being analyzed, SEED conducted an

i- lla -Jt r < ~~~~~~~~~~~~~~analvsis of the current operationis, concentrating on two issues: nianagenment con-L trols and the company's current reporting system._- e SEED IT team conducted an analysis of the current MIS information flows,

a - t reporting requirements and other relevant processes. SEED was able to use theAbove: Liii workers engaged in pillow production

existing system data and create a new Microsoft Access-derived database thatLili - Bolstering Manufacturing in Albania provides a variety of customized reports. The new system has reduced theLili sh.p.k is an Albanian company that has been operating for 10 years as a need for data re-entry and has decreased the report generation time (data iswholesale trader for bedroom linen and children's products, with sales in 2001 of now available in "Real Time"). Furthermore, the database has been installed at$1.5M.The company employs 30 people and has recently installed a new line for client sites and all Lora staff have undergone new skills training for efficientpillow production. database operations. Lora General Manager Mr Abdurahmanovic commented,

"Early results from applying SEED recommendations have beenSEED assisted Lili by reviewing a plan to start producing comforters.The report promising; greater profitability and an increase in cashflow is strong-focused on the procurement of capital equipment, the most appropriate plant ly supporting our overall investment."layout and recoirmendations on the production unit capacity.

Monet - Expands Cable and ISP Services in BiHAn Investment Plan was prepared and presented to FEFAD Bank (now SEED assisted in June 2002 with the establishment of the BiH business associa-

Procredit Bank) in Tirana with a request for 4s1- 1i.i10I0.The loan was tion of cable operators. This group has now grown to 20 members. One of ther ippri eti . ii 2''. r CI I I in I d I 1 InIr.. ic 1I h'.d1i i l.,led for founding members is Monet, a private cable TV company headquartered in

N,1\. ul'. 1 Mostar. Currently Monet has 5000 subscribers, however the recently installed, < 61, | , network infrastructure has the capacity to service 10000 customers in Mostar

alone. SEED's strong advocacy work in this field inspired Monet to engage SEED..l ' . I I ! l _ to carry out a feasibility study to outline the viability of future expansion. The

feasibility study outlined the optimal design of the new network and provided

total cost estimates, including a balanced debt to equity structure. In the nearfuture, SEED is looking at developing an Investment Plan and identifying strate-gic equity partners for Monet. SEED is also actively promoting a strategy of con-solidation among the association members which should in turn attract needed

- ^ -^ [! i foreign equity and technical innovation.

Left: ILAR printing works, a SEED client in Albania

l ~~~- -

Participation in a wide range of courses developed by SEED for SMEs in the region;

M. * v *Preparation of an investment plan to be marketed to various financial institutionis;

Selection of MIS software from the SEED portfolio to fit client requirements;

I ; i!2 l 1 i * Support in the formation of business associations, including BA managemiient.

SEED is also assisting Serbian SMEs to gain better access to finance. One such: - - Mi 3:-* .iiinovatioii is a credit risk reserve scheme operated by Raiffeisen Bank (RBSM)

a _ _ _ _- 3i and the Austria Ministry of Finance (AWS-RBSM). This scheme provides sup-

'; i ' rt . t ;-6 > i , > s ._ li port to overcome the traditionally onerous banking sector capital reserve require-S> i ments.

12 r - - S 31 MPA Ekman - Facilitates Healthcare in KosovoMPA Ekman-Med is a newly created companv in the healthcare sector whose

i 6 ' / / lv aim is to construct and operate a new Ophthalmologic (Eye) Clinic in Prizren

'- .9 - 4i, r"}& ^ / x (Kosovo). At present there is no such facility outside the capital Prishtina and in

| tj I > g l ,many cases patients are forced to seek treatment abroad.

Monetlaunchesone of the regions first ISP via table TV attheMostarIrae The three company shareholders (from Switzerlanid, Finland and Kosovo) havealready invested £398,000)( in the construction xworks, however further funding is

required to complete the construction of the facility and purchase medical equip-

SERBIA AND MONTENEGRO (SAM) ni~~~~~~ent. M. D. Feimi Mazreku, the clinic director anid an expert ophthalmiologist hasalready assembled a leading team of doctors to be employed in the hospital.

US-based NGO Mercy Corps Sponsors SME Interventions in SAMSEED provided technical assistance to 45 SMEs, associations and cooperatives In order to undertake a detailed market and technical analysis, SEED assembled

split into various agricultural sub-sectors participating in the Mercy Corps eco- a team of ini-house specialized staff, local consultants and a Swedish technical

noimiic developmenit program throughout South-West Serbia. SEED conducted consultant. The analysis results recommended a limited further new invest-

on-site interviews, identified key issues and recoimmended solutions in an In- ment.As a result, the SEED Investment Plan (IP) document seeks total

ternal Enhancement Plan (IEP) report. SEED's work focused on the investment financing of '>-o 1 1 i 1 l instead of .;$ " "''i as initially sought by

needs of each company with IEP recommiiendationis in areas of financial maniage- the client.

ment, investment analysis, operational and organizational analysis, human ,resources and management information systems (MIS). SEED is currently marketing the IP to poten-

The aim was to develop a plan that would meet each of the companies' devel- tial local sources of finance, with initial

opment needs. Using its agriculture sub-sector knowledge, SEED provided interest showxv by the Albi Mni.i-p

customized recommendations and guidance for sustainable growth to 6 bee- Reconstruction Equity FL..1-J

keepers associationis, 7 compainies in the dairy sector, 9 mushroom processors, (AREF).

6 services providers, 8 fruits & vegetable processors, 7 companies in the \vheat ---- S

sector, I rose nursery and 1 meat processor.To follow up on the recommendations delivered, SEED is uu.. training and

consultancy services to Mercy Corps beneficiaries including:

I~~~~~~~' .. W.('_F

INVESTMENT SERVICES

FYR MACEDONIA Agrounija's charismatic director describes SEED's intervention as follows: "Weexpected very little in the short-term; the almost immediate positive results werevery surprising. This gives me faith that we can expect tremendous results in rela-

Makprogres, the first certified HACCP* firm tion to the long term aims". In line with the developing strategic plan and the search

in FYR Macedonia for further international partnerships, Agrounija is planning to construct two newMakprogres is a privately owned firm in the busi- silos. This new investment will strengthen domestic capacity and better prepareness of importing, wholesaling, retailing and distrib- 4 1l{2 pAP(i% Agrounija for upcoming opportunities abroad.uting cominon consumption goods and grain prod-ucts. Recently the company also launched a new production line (ElM investment)for the production of sponge roll and layer cakes. Makprogres, with an annualturnover of E3.4M, owIIs 7 retail stores and employs 65 workers in tvo shifts.SEED conducted two reviews as a prerequisite to HACCP, including examininigthe environmental, social, health and safety issues and assessing the com1pany'scosting systems and cost allocations by product line.Following an extensive search, SEED engaged an international consultalnt tocomplete a teclnical analysis of the existing food processing and hygiene prac-tices. The HACCP certification agenda was completed on schedule.

*HACCP refers to stringent international standards and specifications in food = _ -

manufacturing fast becoming essential to gain access to EU markets.

Agrounija Develops International Links With the Help of SEEDAgrounija is a private company with 17 employees and an annual turnover ofE2.0M, accounting for approximately 15% of the total agro-products sector in -

FYR Macedonia. Its two primary business lines are:: -

i) Selecting, producing and selling wheat seeds ii) Sales of mineral fertilizers, pro-tective chemicals and other related products.The company's origins in seed breeding date back 40 years. The company direc-tor, Mr Ognen Orovcanec, has positioned the company as a leading Balkan pri-vate wheat breeding research facility. Thus far the company has developed 17sorts of unique seed materials; in particular, one wheat sort currcntly being test-ed in France has been shown to provide 60% more protein and 50% higher ener-gy levels than the industry norm. SEED's analysis, which was supported by two -

international experts, concluded the following:* The seed wheat strains developed have a real potential in the international market;* Agrounija needs to develop strategic links with key international players if it is

to achieve success beyond the borders of FYR Macedonia;* The safeguarding of intellectual rights in an international environmiiient is vital.

Above: Agrounija Director Mr Ognen Orovcanec standing next to an experimental wheat field near Skopje.

Agrounija A private company, that operates in the selection and production INET Phase II INET is a private company from Skopje involved in sales, distribution and

FYR Macedonia of wheat seeds and processing and sales of seeds, mineral fertilizers, raw FYR Macedonia servicing of personal computers. The company has requested that SEEDmaterials and protective chemicals, etc. SEED prepared a brief strategic plan help develop a strategy to increase market share, implement cost-savingsand prepared an assessment of the environmental and social issues. and increase profitability. The client has developed and implemented theSEED has prepared a light touch strategic plan for the company, and has financial models and marketing recommendations from the first Partnershipassisted the client in creating a strategic liaison with big bread and mill Agreement. Market research is completed and it is being used for theindustries in France and Hungary. investment plan for ERP software development preparation.

Beekeepers The association wants to help members with the marketing and sales of Kopaonik I Krajina Kopaonik is a major insurance player in RS (BiH). The projectAssociation SN their products. SEED completed an IEP and IR Recommendations are: BiH looked at the company's operations and search for a strategic partner

FYR Macedonia a) Hire a lawyer to create a legal entity and clarify ownership structure; b) through an IEP This plan identified areas for improvement in the company'sRelocate production facility from residential to industrial zone; c) Renegotiate operations, staffing, MIS and profitability. The company has received a setthe terms of loan with the Ministry of Agriculture; d) Renegotiate after sale of recommendations which need to be implemented for the firm to attract asupport terms with the machinery supplier; e) Secure honey supply by strategic partner. Following completion of that activity, SEED will preparesecuring supply contracts with the beekeepers in the region and nationally; investment memorandum and approach strategic partners, such as localf) Set up a simple management structure typical for a honey processing and foreign insurance companies, banks, etc.

facility (Honey Care Africa model); etc. Lili sh.p.k Is a company located in Tirana which deals with trade of imported

Beton Plus Is a large producer of construction materials in the city of Korca. The Albania commodities. Presently, the company is a wholesale trader of various items,Albania Internal Enhancement Plan and the Investment Plan have been completed such as sheets, pillows, bed covers and blankets. Recently the company

and presented to potential sources of finance. National Commercial Bank has established a production line for pillows. Lili plans to start theapproved a loan of $1.2M for the financing of this prolect. production of comforters in order to continue with the process of import

Ferlut Has invested in the establishment of a dairy processing factory in southern substitution. SEED delivered an Investment Plan and helped the firm raise

Albania Albania. Using a Japanese grant to the Albanian government, machinery financing (total of $400,000 committed, $200,000 disbursed).has been purchased from Italy for US$ 655,000. SEED has prepared a Lora MIS This project is a follow-up on an IEP and consists of implementation of the

Technical Document (Milk Collection Manual), together with a set of BiH last recommendation from IEP - enhancement of the company's MIS. Therecommendations that the company should address during the course of company had very sophisticated reporting needs, but has weak reporting

its operation. The Project is on hold waiting for client to make a decision based on the available data. SEED was asked to develop a new reportingregarding the UHT milk processing line. model. The SEED IT Team conducted an analysis of the current MIS,

Fratello Is a Joint stock company based in Banja Luka which imports, packages, information flow, reporting requirements and other relevant processes and

BiH brands, markets, and distributes frozen seafood, canned fish, olive oil and developed a reporting database using Microsoft Access. Time required forfrozen vegetables. SEED has completed the following sets of activities: producing reports has been dramatically decreased from several hours to1. Financial review of the company's performance in 2002 and during four few minutes and now Lora Management has access to "Real Time" reports.

months of 2003; 2. Evaluation of all major functions and activities, including Makprogres SEED has prepared the costing analysis of all production lines permarketing, distribution,HR; etc.; 3. Identification of the key issues; FYR Macedonia product and has identified the loss/profit making products. SEED has also

4. Analysis and prioritization of issues identified; 5. Recommendations for assessed the IT systems being used in the company and has made several

enhancement of product mix and pricing strategy and structure. recommendations for its improvement. SEED also helped the company put

Grand prom d.o.o. Is a private company employing 200 people and the leader in SAM in the in place the HACCP food safety system and become the first certified companySAM roasting, grinding, packaging and distribution of coffee capturing, about 35% (using foreign HACCP accredited firm) with that system in Macedonia.

of the market. Local and international consultants appraised the current Markant Is in the business of producing metal screws and metal spare parts for

operations and the Company's investment plan. GRAND PROM went through FYR Macedonia industrial usage in Macedonia. Markant sought assistance in searching fora phase of negotiations with a multinational company to sell. Two local appropriate external financing. On-site appraisal was conducted. Anconsultants have completed a Market Survey field study for coffee products. environmental / social Review has been completed. The I EP and a draft

Griald sh.p.k. This project assisted Griald (a construction company) to version of the IP have been completed and presented to the client.

Albania prepare a feasibility study for the establishment of a crown cap plant in Mercy Corps As part of the USAID-funded Community Revitalization through DemocraticAlbania. The completed study has been presented to the Interventions Action, Mercy Corps has donated equipment and technical assistance to acompany. Market research and financial analysis indicated that the market SAM number of companies/associations representing various sectors across Serbia:

lsize is too small for such an ivestment. 8 dairy processing, 8 fruit and vegetables, 6 beekeeper associations, 9

ILAR shkp Is a printing company located in Tirana and established in 1995. It intends mushroom/forest fruit processing and 7 wheat/fodder processing companies.Albania to enter the market of secure papers, cards (phone cards, bank cards, IDs) SEED conducted on-site visits to the companies. SEED prepared IEPs and

and production of packaging cardboard. SEED prepared two Investment Investment Overviews with the aim of developing a clear understanding,

Plans for two projects in relation to a new cardboard factory and new card methodology and proposal for the companies' development needs. Issues

production line. identified included introduction of ISO 9000 and HACCP.

IEP - Internal Enhancement Plan

IP - Investment Plan

! E INVESTMENT SERVICES

Monet Is a private cable TV company with 2500 subscribers. The IS team has CMA The stone extraction and cutting part of the business supplies HerzegovinaBiH delivered a feasibility study outlining the viability of future expansion BiH and the export market. The company is focusing all future investments into

and assessing the ability of the company to implement future plans. The the stone processing business. An IEP was presented to the client with astudy outlined the optimal design of the new network, providing the total detailed list of required equipment investments and the areas of financialcost and the optimal debt and equity structure. The study also provided management. SEED has helped CMA locate & negotiate financing ofpricing for the company's corporate customers. The next step SEED will about KM 600,000 with Hypo Leasing from Graz, Austria.undertake will be the development of the Investment Plan and the CPU The company is planning to move to a new printing technique which willidentification of a strategic equity partner. BiH enable them to meet label production requirements from beverage

MPA Ekman-Med The client was supported in establishing an ophthalmology clinic (eye clinic) companies. An IP was prepared for potential equity investment andSAM (Kosovo) in Prizren (Kosovo). The IEP and the Investment Plan have been completed. marketed to Horizonte Venture Management and SEAF. Both funds have

The IP is being marketed for potential financing. AREF (Albanian rejected the application.Reconstruction Equity Fund) Kosovo branch is reviewing the IP Diabaz Is a private company specializing in stone extraction. SEED has completed

Nino Optika Is involved in the retail sale of optical lenses. The company wants to initiate BiH the appraisal of both and financing and the technical side of the project. AnBiH lens production and is seeking financing for this venture. SEED completed IEP and IP have been completed and delivered. The IP is being marketed to

an IEP recommending the whole investment structure in terms of two equ ty funds, Hrznte Ventured Mraintegrest and are currently waitingequipment purchases, training required; etc. for completion of an official audit of company's books.

Optima The goal of the new airline would be to connect Mostar with a number of Digitel SEED is in the process of preparing an IER During the appraisal andBiH cities in Europe. SEED analyzed the regulatory environment in BiH for BiH discussions between company's owner and SEED, it has been agreed to

airlines, collected market data and is developing links with a potential make some modifications to the initial project idea and move the wholestrategic investor (Sky Europe from Bratislava, Slovakia). project to Sarajevo region.

SEAF FFD SEAF-Croatia is an American limited liability company with a HQ in Zagreb. Donia A cake manufacturer ordered an IER SEED will undertake a post IEP phaseBiH SEAF has close ties to the IFC SME Department, and has IFC as a major Albania helping the client to resolve some of the issues outlined in the IEP SEED

financier. SEED has engaged local consultants who have completed a has also prepared a detailed costing by product line analysis.market survey on distribution of frozen sea food products and EDIL AL-IT Is a construction company based in Tirana, Albania. IP presented to severalpharmaceuticals in BiH. Albania financing sources. SEED was not able to find financing for this project

ABA IFC and American Bank of Albania have entered into a Guarantee Agreement despite its marketing efforts. The difficulties have to do with the scarceAlbania from IFC to ABA in support of $2.5M whereby ABA will benefit funds available for credit in Albania, personal positioning of bank managers

from a partial guarantee (50%) on ABA's portfolio of new loans tailored to in regard to this project and Edil-AI-IT, and the preference of theSMEs. SEED has conducted appraisal work for a wood processing company manager of the company for equity financing.delivering recommendations. FGG Raiffeisen SEED has been contracted by FGG to carry out the assessment of proposed

Agros SEED has completed an IEP and an IP This Plan presented the SAM transactions to be covered by the FGG guarantee issued under the facilityBiH optimal concept of investment in a flour mill, supported by financial agreement. SEED worked with the company Libertas Chem d.o.o. Assessment

projections and market research. SEED identified Raiffeisen Bank in RS Report on Libertas Chem was submitted to the Raiffeisen bank, which(BiH) as a potential financier. The company decided to stop the plan. approved a loan to the amount of e1.6M.Company will be included in all trainings delivered by SEED in the coming Grafid Was established in 1988 as the first privately owned offset printingperiod, to improve their readiness for investment. BiH workshop in Banja Luka. SEED is in the process of preparing a strategy

ALB-KOS ALB-KOS Construction sh.p.k. is an Albanian construction company to market the company's IRSAM (Kosovo) intending to establish a polystyrene production plant in Kosovo. SEED lmpaz Impaz dairy has received offers from two investment funds for equity

conducted an IER The company will most likely not go ahead with the SAM investment. The Board of Directors and Shareholders Assembly haveproject due to perceived over-capacity within the region. accepted one of the two offers. As this company is not 100% privatized,

ART Company SEED has completed the IEP & IP for $3.2M investment in Sarajevo. the company need to get an approval from the Ministry of Industry andBiH SEED has approached several local banks to raise a further $1.0M of loans Privatization. Intensive activities on IP; marketing was made to 5 potential

toHSEEDhas aom pproahed inestmev s wlol banks toe rairset furthpler $1nema of l investors. One of the potential investors has shown interest, and ato complete the investment. This will be the first multiplex cinema in BiH, joint visit to Impaz dairy has been organized. Investor and Dairy Managerswith 8 screens and 1600 seats. SEED will provide further assistance by are considering different merger/acquisition options.selecting an industry consultant for equipment and installing equipment, aswell as training staff. INET Is a private company from Skopje involved in sales, distribution and servicing

FYR Macedonia of personal computers 190% of total turnover); rental business withSEED - Cluster SEED helped facilitate the participation of four shoe makers from computer equipment and software development. It is one of the twoRoundtable Kumanovo in a Cluster Roundtable discussion in Milan, Italy, from authorized IBM dealers for Macedonia. Its flagship product is EnterpriseFYR Macedonia 15-17 September. The shoe producers from Kumanovo made important Resource Planning (ERP), a "Built to Run" software, a multi-language

contacts in Milan, and some of the representatives from business application tailored specifically for the needs of SMEs. The consultingassociations and development agencies expressed interest in team has completed the marketing, financial and strategic assessment offollowing up once an association is formed. the Client's business operations. IEP preparation in progress.

= V N

Linkages This prolect has developed a set of technical tools and training modules to PUM SEED has prepared 4 financial reports. The dairies are looking for an investor

SAM support SEED's new linkages program, working through Foreign Direct SAM to purchase the government held shares. Prior to merger, the members wishInvestments to targeted SMEs. Accenture Development Partnerships to conduct an independent evaluation of their respective companies. This(ADP) is the international technical partner to this initiative. The ADP dairy association has canceled further cooperation with SEED.team, working together with the IS team, completed development of thefollowing tools and training modules: Business assessment, How can I be SEEbiz.net SEEbiz.net is a regional business portal targeting entrepreneurs and SMEsa good supplier, How can I be a good company, How can I be a good BiH in SEED's countries, with the aim to provide and divulge timely and

distributor, MIS reporting. The ADP team has delivered all the modules to FYR Macedonia relevant information in the local language(s). The portal is operational inSEED owners in the form of one-on-one training. CBF has provided SAM BiH, SAM. The Strategy for handover of the portal to the private sector$136,000 grant for development of this linkages program. has been completed. Total number of hits in BiH and SAM: 1,174,787;

Kosta Abr. Is a private company producing various types of paper and office materials. Total number of users: 24,944. Average number of users in Sep: 177.FYR Macedonia The IEP was completed and the client has accepted the recommendations SEEbiz.net.mk has been launched. Number of users m Macedoma:

and the proposed action plan. The IP preparation is in progress. Potential 2,568; number of hits 163,308; average number of users per day 17.

sources of financing have been identified (Ohridska Banka and/or Komercijalna Stefani Is a private company identified during the Berry sector study carried out by

Banka) and initial contacts with their respective credit departments have SAM G17 Consultancy in Belgrade. Raiffeisen Bank SAM approved the loanbeen established. The client is currently in a phase of radical internal to Stefani Univerzal while reducing the amount of the loan offered torestructuring. Following SEED's suggestions the client has invested E180,000. Stefani Univerzal's proposal was included under the FGG-RbJE100,000 into machinery. risk reserve scheme.

Lola Fedek Is a private engineering and metal processing firm from Skopje. IEP has Figar In light of expected displacement of 400 workers, Tigar wishes to develop

FYR Macedonia been presented. The company approached SEED for assistance at a SAM feasibility studies for four projects intended to set up a numberSEED strategic planning workshop. The process of acquiring machinery of small businesses for its extra employees. This project consisted of 4 IEPs:has been completed. The project has been dropped since the client did laundry operations, mini cattle farms, medicinal herb and spices andnot comply with SEED IEP recommendations. outsourcing other services.

Lora Is a trading company from Sarajevo, with exclusive distributorship for aBiH number of FMCGs, six branch offices around the country and fifty Tigar Farms SEED has carried out a feasibility study and has concluded that development

distribution vehicles. IP preparation is on hold wating for the company SAM of a number of small animal farms for production of milk and meat in various

to comply with recommendations from the IEP stage. The key recommendation locations in Stara Planna mountain area is a viable busiess venture. SEEDwas to begin importing pasta products to assess market demand prior to has also undertaken a feasibility study for the Southern Dairy Group andmoving forward with the investment in pasta production. SEED has the study has established the demand for raw milk in the region.finished the IP and the IEP Tigar SCN Tigar wishes to optimize the three flows (Information, Material, Financial)

Mikroelektronika SEED completed an IEP and IP The IEP was presented to EUPER consulting, SAM in its domestic sales network in order to maximize the profitability of the

BiH which is to provide Additional Technical Assistance to the Client. network value chain. SEED team evaluated the financial performance of

MN Hotels As part of the TDI initiative in Montenegro, SEED has identified 7 companies 85 retail stores as well as the regional sales offices of Tigar sales network.

SAM in the tourism and hospitality industry, mostly small hotels that require Furthermore SEED analyzed the inventory management system, logistics,funding for expansion. The clients are based in the Budva region. The MIS and various operational processes. IS team and its internationalProject includes four Partnership Agreements with four different clients. consultants have conducted interviews with Tigar staff in the central sales

Three of the projects are on hold waiting for clients to comply, while one office, visited 30 retail stores, 5 franchisees, 2 warehouses and 3 regional

is at post IEP stage. offices and evaluated the financial and operational data supplied by the

Mobi Is a private company that operates in the forest products sector. The company cient. IEP was completed Including recommendations for post IEP interventon.

SAM exports 100% of its products to 17 countries. With SEED assistance the Tourism Development SEED has worked on supporting the commercial tourism sector in Montenegrocompany received an offer for a working capital loan from Raiffeisen Bank Initiative (TDI) MN (Budva and Kotor). The work has included round table meetings, the

Serbia, however the company failed to submit complete documentation SAM development of 10 workshop modules and 114 participants in businessand did not allow independent valuation. development training. There have been 128 potential investment projects

Pekare Ljub. Is a recently privatized bakery, the largest in the Tuzla region. SEED has investigated. TDI participated in cross-border cooperation. TDI identified

BiH presented the IEP to the company's management. The IEP does not and provided foreign training aids to local enterprises. 4 Investmentsrecommend the company undertake new investments, rather it needs to Plans are being prepared.improve current operations striving to achieve a positive net margin. Vipro The company is located in Gevgelija on the Macedonian-Greek border. InThe company has accepted the recommendations & is now FYR Macedonia 1993 the company started buying second hand bottling lines for softundertaking them. drinks. The company has identified demand for processed vegetable

Plastex Plastex is a private manufacturing firm, which produces various types of products, especially in the German market, which it wishes to develop.

FYR Macedonia plastic bags used in retail business, industry and households. The SEED delivered an IEP and Post financial analysis containing financial,company is one of the largest producers of high density propylene bags in marketing, production and organizational sections.Macedonia with 20% of domestic market share. It exports to Kosovo,Albania and Greece. SEED prepared an IER The Client has successfully SIDA MR The sponsor SIDA-Idea Plant is seeking the opportunity to re-open smallimplemented recommendations outlined in the IEP in regard to its Albania businesses in the region of Korca (Albania). The study findings focused

strategy, positioning, internal organization and target markets, as well as on the importance of revitalizing the glass blowing tradition of this city.changing its bank, which resulted in the disbursement of a credit line of The study has been delivered to SIDA and Idea Plant who are working on

E220,000. this project in Albania.

SEED has provided Tigar with considerable strategic advice on re-engineering and Methodologythe development of new supply/distribution chain linkages with local SMIEs, focu-

sin ontheretildevelopment opportunities that exist in such a large company. Initially commencing as a pilot, the Tigar Linkages framework was developed bysing on the retail development opportunities that exist in such alargecompany. Accenture Development Partnerships* and SEED staff and consists of two criti-

In addition, the SME linkage program aims to develop a diversified and sustain- cal conmponents:able economic base for non-core business units that are no longer directly .Analysis and solution of supply chain management (through 12 coordinatedinvolved in tire production, thus creating SME development opportunities in the modules consisting of up to 2 days training per module, toolkits, starter packs,town of Pirot and beyond. analytical tools and case studies)

2. Training and advisory on SME development through large company restructuring

Tigar management has placed great emphasis on this SEED-Linkages initiative.Referring to the SEED distribution intervention, Tigar director Mr *Accenture Developmiienit Partnerships (ADP) is a not-for-profit group within

Nikolic stated, " I expect that the revamped Tigar Trade xvill acquire Accenture that makes available to the development sector, the high quality busi-a firm footing in the iiarket aind offer a comprehersive level ness and techniology consulting skills which Accenture offers its worldwide com-

of services currently unsurpassed in our industry." In mercial clienits. ADP customizes skills, methodologies and expertise and appliesparallel, SEED has accentuated fiscal accountabili- these for development sector clients to help them achieve their social and eco-

ty and project sustainahility. All the products nomic goals, at fee rates which are aligned to industry norms and affordable byf and services delivered to Tigar and Tigar the organizationis with whom they work. ADP's work to date has focused on

a Trd were charged at local com- pacity-building on the ground with national and international NGOs and localiiiercial rates, recovering over SME development organizations.

100% of the local cost.The ADP website provides more information on some of these projects and onADP in general: www.accenture.com\adp

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Above: Shown is the recently delivered "Sales and Customer Service" training module. The training

was delivered to Tigar Trade employees working on the retail side of the business. This was the second

of 16 trainings to be delivered by SEED.

Three Phases of Intervention instrumental in creating the methodology for the following critical components: aUsing the linkages programi framework, SEED xas able to develop a packaged staff iincentive system, setting up new stores, developing a franchise nianual for spin-prograing thatfocusedhardon the linkages aspectm of SEED thable com ieso mai opaaer- Tling off tllird-party owwned stores and developing a busisness plan for Tigar Trade's

priogra that hocused hard on the linkages aspects of the companies' main oper- expansion and restructlring, focusing on franchise development and company stores.ations.

First and Second Intervention - New SME Partnerships andDevelopmentlOutsourcing/Spin-off Expected ResultsSEED structured a feasibility study for three new busiiness ideas proposed by The value of SEED's work with Tigar to date is best reflected in the substantial

Tigar management. Identifying new SME developmiient opportunities is a criti- interest this project has attracted both from the commercial sector and froni other

cal component for any large company to consider xvhile it undergoes restructur- donor agencies offering complementary services and products. Community

ing.Tigar's overall approach to corporate citizenslhip nowvextends to the restruc- Habitat Finanice (CHF), a contractor for USAID's prograni covering southeast

turing of Tigar's 17 non-core business units anid the establishment of three nlew Serbia, has enthusiastically joined the Tigar Linkages initiative and is currently

SME projects. offering grants to small start up businesses in the region. Furthermore, Swedish

Third Intervention DistributioInternational Development Agency (SIDA) has volunteered to provide its expertThird Intervention - Distribution j technical assistance to dairy farmers in southern Serbia. For its part, SEED willTigar Michelin Holding (TMH), the joint venture between Tigar, Michelin anid continue working with applicants, assisting them in the preparation of grant

IFC, has decided to spin off their retail distributi(on network consisting of 82 applications and formation of business clusters and offering best practice business

stores, 3 regional sales offices and 2 regional warehouses. Based on prior analysis training. In addition, SEED will help applicants source financing froum other

and with Tigar Trade nianageimienit approval. SEEDL has set about devisinig an donor sponsored SME credit lines offered through micro-finance and commer-

implementation strategy which includes the overhaul of internal processes. cial banks, whilstTigar Trade's development is currently being reviewed by finan-cial institutions.The project is expected to yield tools and experience which can

In addition to supply chain and general nianageimient topics SEED also delivered spe- be applied to other projects not only in the Balkans but through the other IFC-

cific modules targeting the introduction of new s6ills to Tigar Trade staff. SEED was managed SME facilities worldwide.

While capacity building is a critical strategic objective, SEED recognizes that in FACULTY DEVELOPMENT PROGRAM (FDP)developing local capacities for the overall market, it is essential that these resourcescontinue to be used by SEED for its own work. Such a move is an important ENTREPRENEURSHIP FACULTY DEVELOPMENT PROGRAMquality control measure which SEED needs to maintain. During FY 2003, SEED E - FDPcompleted 31 capacity building projects, training more than 300 local service EI-iP1 E -FOP2 E-FOP3

providers, nearly 700 SMEs employees/managers, 270 financial institution staff Afeth,dolgyT-,,iing Tec.i,t,iTr + Oi arti ENTREPRENEUR TRAINING PROGRAM

nmembers and more than 800 youth, who are potential entrepreneurs. Total cash Technical Training Outreach

fees from SEED capacity building services amounted to $162,435. This relatively Business Plan WUS Austria / Business

high cost recovery rate provides a promising sign that entrepreneurs are willng to SEED Courses Train the Trainer Competition Case Challenge

pay for quality advice and services charged at local market rates. Women's Entrepreneurship OSCE / Youth Trainers'initiative WEI -VIDRA Entrepreneurship nerk

Train the Trainer Seminars Network

ENTREPRENEURSHIP DEVELOPMENT PublcServce Pro-BonoSeminars ~~Workshops

The Faculty Development Prograam (FDP) is a multi-program capacity build-ing initiative, the objective of which is to encourage and support entrepreneur-ship by partnering with university faculties to develop SME training programs.The program consists of the following three phases:

FDP Phase ISEED developed partnerships with educational institutions, professors and con-sultants in from July to September 2002. As a result of these discussions, 21 pro-fessors and consultants were selected from all SEED countries to participate. Thetraining methodology was developed and conducted by ISTUD (Milan, Italy),

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an institution with a good reputation for developing entrepreneurship curricula. Cash prizes were awarded for three first place wiimers, and two comparnes ("A-Studio"

The 22 day training programi on miethodology and interactive techniques for ftrom BiH, specializing in creative adverfising billboards, and "Prosperity Seedling

teaching adult entrepreneurs took place in November 201)2 with non-core fund- Centre Albania," speciahzing in seedling production) which have been axvarded start-

ing from the Italian TATF (Technical Assistance Trust Funds) through IFC. up grants of S ."'";.- 1 each, again generously fiinded by a grant from NORAD.

FDP Phase 11 I OSCE - Youth Entrepreneurship Initiative

The second phase ofFDP was implemented from December 2002 tlhroughJune 2003 To continue the partnership with OSCE (Organization for Security and

with partial non-core finding by NORAD. The second phase cqmiponents include: Cooperation in Europe), SEED developed an advanced follow-on one-day youth, ~~~~~entrepreneurship seminar. SEED trained local consultants who have been hired

Technical Training and frinded by OSCE and have delivered 28 seminars to 700 participants in BiH

SEED conducted technical training courses in each country wvith new material anid FYR Macedonia. This component cost approximately $1(0,000 and demon-

developed as required. FDP participaiits attended at least' ,3 courses. The aini was strated SEED's ability to be involved in supporting other organizations in their

to transfer the training courses to participating eduIational institutions that sector related endeavours.

would enable the continued education of adult entrepreneurs.

Business Plan Competition .The Business Plan Competition (BPC) was open to existing and prospective as

entrepreneurs. This effort was supported by public business planning seminiars x b .2

presented by SEED consultants. Approximately 700 people attended these semi- . -'

nars. BPC applicants were required to submit a drtailed description of the busi- -

ness concept. 30 participants were selected in each country.The final phase par- _ _

ticipants were invited to submit a complete written business plan for evaluation.

The 8 finalists in each country xvere selected to,present their business plans to a

panel ofjudges during a 20 minute presentationi.Left: OHR High Representative Paddy Ashdown visits a youth entrepreneurship seminar in Travnik BiHRight: A youth entrepreneurship seminar in FYR Macedonia

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Above: VIDRA participants attending "Introduction to Strategic Planning and Human Resources" Above: Faculty staff undergoing ETP traini'ngtraining in Banja LukaOteCors

Vidra - Women's Entrepreneurship Initiative SEED has implemenited a series of training miodules for 22 female trainers FICCodtnsfCnratorosruinbelonging to VIDR-A Women's Action Group in Banja Luka BiH. The program SEED coniducted "FIDIC Conditions of Contract for Construction" training for

Aimsvto helpA feaici entreprtenig"neursdcint eStrabl gish lnnn and deeo heirmon businresses. :Fcut tf udron EPtann

traimsninghelp female entrepreneurs establish and develop theirownbusinesses.construconstructio industry specialists aaowners and managers of SMEs involved in orPart of the training was conducted by Center for Entrepreneurship Education affiliated with the construction industry. FIDIC - International Federation ofand Development (CEED) - Canada. The project was generously financed by Consulting Engineers - has produced a niumber of standard conditions of contractsSwiss Agency for Development and Cooperation (SDC). covering various types of work concluded between the contracting company and

the contractor.The two-day course acquainted construction specialists with FIDICFDP Phase III contracts for construction that are used in international bidding, enabling them tobe more competitive and to expand their market area. This initiative was a follow-

Entrepreneur Training Program up to another training course developed especially for the construction sector thatThe purpose of this program is to assist the participants in the first two phases of covered how to prepare winning bids for international contracts. Industry specialiststhis program to develop an Entrepreneur Training Program (ETP) in each of who attended the first course specifically asked for training on FIDIC. Because oftheir countries. Thus far, extensive consultations have been made with education- the level of interest in this training, the course was conducted six times, includingal institutions and ETP candidates and participants have received final version twice in Belgrade and once each in Sarajevo,Tirana, Skopje and Prishtina.training manuals at the SEED hosted country wide business planning meetings.Ultimately it is expected that ETP participants will take over the delivery of General Management Development Program (GMDP)training courses and capacity building initiatives developed by SEED which will In cooperation with the American College of Thessaloniki, a leading US basedhave a long term impact on the development of private enterprise.The ETP will business school, SEED hosted a skill enhancement program for SME executivecommence offering courses in September 2003. management, independent consultants and firms who provide consultancy serv-

ices to SMEs. This 25 day program was conducted in 5 separate modules in the

following areas: Financial Managemiient, Marketing and Sales, Manageimienit,

Production and Operations Management, Human Resource Management and

Strategic Maiiageilleiit. ; 'The training, hosted in Belgrade, was delivered to 27 participants from 18 corn- A#n

panies/organizations.The final modulc included a site visit to local businesses in -.

Thessaloniki, Greece. r rrIn company GMDP ILL

SEEI) also initiated GMDP on an individual company basis. The traininlg links

theoretical GMDP principles with practice. All training modules have been tai- Ilored to the client's specific needs and the modular design makes it possible for ,qualified companies to receive training in only one particular area. A total of five

modules have been delivered to two clients. Followinig the delivery of the finan- - v. - , .cial management module, a software company manager was quoted as saying: I Above: BBI General Manager Andre Van Hove and staff with SEED Trainers

now understand what I want from my financial department !" HACCP TrainingThe past year has seen the commiietnceimielnt of the 4th phase ofa nmulti phase process

Eumu4 ::: Pto implemiienit Hazard Analysis Critical Control Point (HACCP) in FYR

Macedonia. The training course provided theoretical and practical knowledge on all

EllEh-t . t aspects of product safety in food production.The eight local agribusiness consultantsparticipating attended a total of 1i) days traininig and are now quahfied to advise

|lr- ' SMEs on HACCP requirements. By undertaking this initiative, SEED is developing

F .4 1 4I4 local StYLE capacity to produce safe and higlh quality food products that xvill increase!>>1ii ] , t _ custoinser satisfactioii and emnable exports to the stringenit European markets.

Life Cycle of SEED Training Products

Above: SEED client software company "INET" - Skopje

Bank Lending Officer Training 2000-2002 2003 2004

SEED has provided training to local banks and niicro-finanice institutions (MFIs) 7-Train the Trainer ining Conducted

in the region. Generally this has mcant an expansion of business to SMEs, and an SEED -Technical Topics DeProducts y* - ~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Development Traning opc Dvlopal Caaiy:

increase in the loan sizc for the MFIs. This traininlg has benefited SMEs directly Testing Training I Cacity:wit T MEstn Local Faculty & Faculty staff,

by increasing the availability of credit an(d further developing local capacity in the Consultants Trainers and

form of skilled lending personnel wvho are equipped to do a sound cvaluation of Tining Consultant

SMEs that request loans frolm their banks. A total of six trainings xvere held across

the region (featuring high profile clients such as Bosnia Bank Intermiatiomial (BBI)

in BiH, MFB Bank in SAM-Kosovo and BKT bank in Albania). _ _

-S.

Agribusiness HACCP Introducing and implementing Hazard Analysis Critical Control Point The Entrepreneurship - Aims to assist participants in developing an Adult Entrepreneur TrainingFYR Macedonia (HACCP) processes in Macedonia. First part included a five-day training Faculty Development Program/Entrepreneur School in each of their countries. The Center for

covering theoretical aspects of HACCP implementation. 7 local Program Phase Three Entrepreneur Education and Development (CEED) was selected as theagribusiness consultants were trained. Second part of training was SEED - wide international consulting firm. CEED visited all of the educationalpractical and included the same consultants visiting 5 companies in institutes in the program and prepared manuals for training. The purposeGreece that have already implemented HACCP. of this exercise is to confirm the quality of teaching. This will give the FDPs

Business Association Technical assistance has been provided to the Albanian Constructors a certain confidence for launching commercial training sessions in September.Development (ACA) - Association (ACA). Since SEED involvement membership has increased to 180 Loan Officer Training - 2-day training program on Functional analysis. Modules include: ProductionAlbania members (16%). Two new studies will help ACA to befter address advocacy EKI management, Marketing and Sales Management, Financial Management

issues and assess constraints for construction industry development. BiH and General Management.12 lending staff members from Economic CreditSEED is assisting ACA in negotiating membership to the German & Institution (EKI), a micro-credit organization from BiH, have been introducedAustrian Constructors Association and entry into FIEC membership. to basic skills required to analyze small and medium sized enterprises

that apply to them for loans.Business Association 1) Five issues of the newsletter were issued and distributed to approx.thtapyotemfrlnsDevelopment - 900 existing potential members and other relevant institutionsa Loan Officer Training - 3-day credit training program. Modules include: 5 C's of Credit; Loan request;Employer's Confederation 2) Membership campaign designed and initiated through media: video EKSIM BANK Historical Financial Statement Analysis; Proforma/Sensitivity Analysis;of the RS clips have been broadcast on local and regional TV stations. SAM Loan Structure. Methodology includes discussion, case studies, exercisesBiH 3) TOR for advocacy specialist approved by ECRS and SEED beginning and analyses. 13 lending officers from EKSIM BANK were introduced to

April. Advocacy specialist started workmg with ECRS to assist m basic skills required to analyze SMEs applying for loans.researching legal materials, drafting policy papers. FIDIC Construction The purpose of the training program is to acquaint local professionals with

Business Association Most planned activities with the Mushroom Growers Association are Training FIDIC contracts for construction used in international tendering. Two dayBusinopessAsoitio Mostplanned: taciitiespoga w ith thealzd ebr-aaaeien SEED - wide training program was developed and delivered by a Regional Consultant inDevelopment completed: 1 traiing program is realzed, members-database 5i being all SEED countries in February 2003. Attending were mainly constructionFYR Macedonia finalized, the Association's Office has been opened and equipped by SEED industry professionals. 15 practical examples of FIDIC contracts were presented

in cooperation with SOROS, the first newsletter is printed. The Beekeepers & discussed in small groups. Because of this training, FIDIC HQ office inAssociation has delivered reports and realized 2 training programs, members Geneva has shown a strong interest in establishing FIDIC country officesdatabase is being finalized, an annual meeting has been held, the Honey in the Balkans. The training was replicated in Prishtina (Kosovo) and Belgrade.trade fair has been held and promotional material including a brochure.newsletter, flyer and poster were designed and printed. The Association Financial Management The primary objective of the FM Tools Development is to provide simple FMoffice has been opened with equipment provided by SEED and SOROS. Tools tools to SMEs to develop more complete and accurate financial information

SEED -wide for their internal use. The first phase of the project was completed by localBusiness Association Both BAs published 4 issues of newsletters in 500 copies. UPMSPP consultants on the latest Windows operating systems. The next phase intendsDevelopment Vrsac programmed and designed a web site and were trained by the to develop FM Tools to be used as support for training courses. These willSAM consultant to update their web site autonomously. They also printed be marketed to SMEs.

promotional materials and selected and trained 15 promoters who Follow Up Focus Groups 13 participants representing various consulting/business support companieshave so far visited 80 SMEs registered in the Vrsac municipality. In Business Service took part in the focus group. Perceived obstacles to BDS development eg.addition the promotion involved commercials on local TV stations and Providers consultants not being able to convert more than a few training attendeesadvertising in local newspaper and on billboards. SEED -wide into consulting clients -marketing is critical. More local consultants need

Bank Lending 3-day credit training program. Modules included: 5 C's of Credit; to be included in design of programs which improve skills and promoteTraining Nature of the Company; Loan request; Historical Financial Statement business development.Albania Analysis; Proforma/Sensitivity Analysis; Loan Structure.19 lending IS Consultancy Network The project relates to further development of the IS Consultancy Network.

officers from BKT- BANKA KOMBETARE TREGTARE, Albania were SEED -wide Marketing research training was provided to members of the network in twointroduced to basic skills required to analyze small and medium-sized sessions in all SEED countries. 28 consultants and additional SEED staffenterprises that apply for bank loans. attending training. Market research template introduced for future member

Bank Lending Training 5-day credit training program was delivered in modules over 2 months. use. Additional free of charge HR management training was also provided.BiH Modules included: 5 C's of Credit; Nature of the Company; Loan request; Leasing Training Aim is to train SMEs and financial institutions about leasing, following

Historical Financial Statement Analysis; Proforma/Sensitivity Analysis; SAM the introduction of new legislation. Three trainings held 1) Using leasingFunction Analysis; Loan Structure. Methodology: Discussions, case studies, to finance start ups 2) Explain to SMEs difference between leasing andexercises and analyses. 11 lending officers from Bosnia Bank loans 3) Train newly established leasing company staff on how to offerInternational d.d. were introduced to basic skills required to analyze leasing related legal, accounting and tax services.SMEs applying to the bank for loans. Local Economic The aim was to work with the municipality on the completion of a strategy

Consulting as a profession - SELD partnered with MCA 2000 to establish an international certification Development (LED) for Entrepreneurship and SME development. The LED team and its four workingMacedonia -MCA 2000 program for consultants in Macedonia. Over 120 consultants and others Prijedor II & Zenica groups have defined strategic goals and objectives for the municipality. ThreeFYR Macedonia participated in a conference and many expressed an interest to start the BiH teams were formed for priority projects: (i) Local Agency for Economic

certification process. Of the 25 consultants applying for international Development, (ii) Incubator (iii) Development of food processing and agriculturecertification, 22 paid for the prospect of certification, 8 successfully received clusters. A round table and presentation were held with 30 stakeholders fromit while 14 are in process and will be realized by Sept. 2003. 3 publications private/public sector. SEED organized 2 one day workshops introducing conceptsare being prepared: "How to Hire Consultants"; "Ethics in Consultancy"; and of strategic management, cost-benefit analysis, etc. In addition, technical plans"Common Body of Knowledge for Management Consulting". and consultations on preparations of business plans were provided to teams.

Loan Officer Training - 3-day credit training program. Modules included: 5 C s of Credit; Nature of Poultry Association RS SEED Conducted a 2-day planning workshop with Poultry Association

EKI the Company; Loan request; Historical Financial Statement Analysis; Proforma/ BiH Management board officials. A draft document, including assessment of

BiH Sensitivity Analysis; Loan Structure. 12 lending officers from EKI (Economic current associations capacity (membership, products and services, finances

Credit Institution) in Sarajevo, were introduced to basic skills required to and advocacy) and a detailed budget for the next 6 months have been

analyze SMEs who apply to the bank for loans. developed and delivered by SEED to Associations official. SEED expects

Loan Officer Training - In two separate training sessions Lending officers from Micro Enterprise to deliver a final work plan in Q1 FY'04.

SAM (Kosovo) Bank, Economic Bank, Credit Bank of Prishtina, Kasa Bank, Business Business Association Phase one: BA management training and interactive strategy developmentPrivate Bank. American Bank of Kosovo, New Bank of Kosova and Banking Development for each business association. Training was delivered in Belgrade by our

and Payments Authority of Kosovo were introduced to basic skills required to SAM partner organization - Center for International Private Enterprise (CIPE).analyze small and medium- sized enterprises who apply to the banks for loans. development and managemyent, non-des finance and budgeting, vo lunteer

Regional Business Plan Final 5 public service business plan seminars conducted in BiH and advocacy. In cooperation with the Canadian Manufacture and Exporters

Competition FDP II Albania. 66 business plans considered in semi-final evaluation and 8 selected Association, SEED provided technical assistance to business association

SEED - wide in each country for final competition on May 30. $5,000 prize money management and has engaged with 6 business associations. SEED staff

awarded to top three winners in each country. Final competition business helped produce a strategic plan.

plans are being evaluated for potential local and/or grant funding. Three SEED Business SEED partnered with: Employers Confederation RS in BiH, Unija Cacak 2000,

plans recommended for entry into Prolect Ideas competition. Assistance Program Association of SMEs and Entrepreneurs in Vrsac, and SIGMA in SAM;

Youth Entrepreneurship SEED developed an advanced, one-day youth entrepreneurship seminar in SEED - wide Association of Mushroom Producers and Bee-Keepers in FYR Macedonia;

Seminars - OSCE FDP II partnership with OSCE. Using SEED consultants from the E-FDP program, and National Construction Business Association in Albania. Work has led

Albania it conducted nine Youth Entrepreneurship Phase I and one Youth Entrepreneurship to a comprehensive program of development targeting these BAs for FY03.

BiH Phase II seminars in BiH and four Youth Entrepreneurship Phase I seminars Business Development This report was based on a sample of 466 enterprises working in seven sectors:

in Albania. OSCE has proposed a Phase IlIl Youth Entrepreneurship to Services needs survey agribusiness, production, construction, IT, transport, trade, and catering &

OSCE Headquarters, Vienna. FYR Macedonia tourism. Key conclusions: 1) SMEs are generally aware of BDS services, mostcommonly used are those that assist legal compliance i.e. bookkeeping;

Trainers Network BiH Trainers Network held a constitutional assembly in April during which 2) business plans and strategies are among the least employed - probably

Survey & Association they voted to formally register as an association, verified mandate of the because they are freely given by donors; 3) satisfaction with training and

Albania steering committee and elected new association officers. America's Development consulting services is mixed and quality of service is suspect. The report

BiH Foundation (ADF) -a USAID project -is providing administrative and logistics was presented to Macedonian Association for Management and Macedonian

support for the network. ADF has also decided to fund the trainers network Consulting Association.

secretariat from July 03-June 04. Albania Trainers Network steering committee CFO A total of 27 modules were delivered over a period of 10 months aimed at

has recommended registration of the network as an association. SEED provided Development Training enhancing the skills of financial managers in SMEs. The topics included:

5 international memberships to ASTD (American Society for Training and SEED - wide Negotiation skills, Human Resource Management, Train-the-Trainer, The role

Development) for the steering committees in BiH and Albania. of the Chief Financial Officer in corporate management, Audit and the role

Technical Training - Training: Strategic Planning and Change Management (three-day), Marketing of audit for financial statements, Leasing, Foreign currency transactions, IT,

Train the Trainer FDP 11 training (three-day). Five participants (3 from Sarajevo and 2 from Tirana) debt -equity fiancing. Total attendance for this 10 month program was 405.

Albania from SEEDs Entrepreneurship-Faculty Development Program attended in Faculty Development Executive Management Development Program was delivered to participants

BiH preparation for including this course in a local Adult Entrepreneur Training Program -(FDP) from two Micro Finance Organizations in BiH (EKI), SAM (Agroinvest), and

Program. "What will an international lender want to know about my company" Entrepreneurship also in Albania and FYR Macedonia, which included participants from the SEED

and Strategic Planning and Marketing were delivered in Srebrenica in cooperation SEED - wide EFDP program. All you need to know about Financial Statements (3 daytraining) was delivered in Belgrade. Accounting for Non-accountants waswith UNDP for participants from SMEs and municipal offices. This same delivered to SME owners in Milici in cooperation with UNon- All you need

training program was delivered in Tuzla for owners and managers of SMEs. to know about Financial Statements (3 day training) was delivered in Albania.

Roundtable with In partnership with CIPE and GTZ, SEED facilitated a workshop on best practice Marketing Training for SMEs (3 day training) was delivered in Skopje.

Chambers of Commerce of Chambers in transition and the roles of Chambers in BiH. As a result 7 The Faculty Development After evaluating requests for preparation & delivery of the training program

BiH Chambers attended. SEED is likely to offer partnerships (enter into a Program - ISTUD from Milan (Institute of Management Studies) was selected. A four-week

pilot-based, time-limited project) to 4 Chambers interested in facilitating Entrepreneurship methodological training program for 21 participants (18 university professors

the delivery of SELD trainings for SMEs to their current members/clients. Phase 1 and 3 business consultants) from Albania, BiH, FYR Macedonia, and

One-Stop-Shop Prijedor Mapping of the existing administrative procedures and information flows SEED - wide SAM, enhanced the teaching skills in accordance with modern teachingmethodology. This first phase was fundeo in the amount of $229,000 by the

BiH between the Prijedor Municipality departments has been completed. The "Map" Italian IFC Technical Assistance Trust Fund.will serve as a basis for development and implementation of new administrativeprocedures to allow the municipality to improve quality of services provided FDP 11 Internships SEED has developed partnerships between local universities/institutes andto business Partnership signed 2lFeb between SDC, SEED and Prijedor BiH SMEs that should result in internships for faculty with SMEs. Partnership

Municipality. One workshop with the municipality staff was held in order to FYR Macedonia agreements with professors wanting to participate in the internship programhave been signed. SMEs in FYR Macedonia and Bitt were interviewed, four

introduce the staff to changes in organizational structure and the new role have agreed to participate. Discussions with SMEs have begun on this

of the One-Stop-Shop. topic in the other countries. Internships likely to commence in Q1 FY'04.

FDP II PSS 3-hour Public Service Seminars in Vlora, Tirana and Kosovo entitled Industry Sector The updated ISPS for BiH has been published and distributed to theSEED -wide Competencies for First Line Supervisors (Production and Service Industries). Performance Standards participating banks and USAIDBF to be used as a tool for comparative

SEED conducted this seminar in collaboration with Vlora Chamber of Commerce, BiH analysis of their existing and potential SME borrowers. SEED entered intoTirana Chamber of Commerce, and Kosovo Chamber of Commerce. These FYR Macedonia a partnership agreement with LRC credit bureau in BiH. SEED hasSeminars increased attendance in scheduled training and interest in additional SAM trained LRC staff to compile the database. Databases are being compiledtraining courses. Conducted 2 day customer service awareness training in in SAM and FYR Macedonia. In Serbia SEED collected 329 FinancialOhrid, FYR Macedonia. Conducted 2 day customer service training in Skopje, Statements. In FYR Macedonia SEED collected 330 Financial StatementsFYR Macedonia for 40 participants. An insurance company in FYR Macedonia for years 2000 and 2001. Reports for both countries have been printedhas asked that SEED repeat it for 10-15 of their front-line managers. and distributed to participating banks.

FDP II Training Nearly 140 people were included in the BiH database; 85 in the FYR Macedonia Leasing Fls 3-4 day training seminar for financial institutions (banks and newlyNetwork Survey database. The survey is underway in SAM and in Albania. FYR Macedonia licensed leasing companies) and government officials responsible forSEED -wide USAID-funded America's Development Foundation has agreed to partner supervising leasing companies. 28 participants attended leasing training

with SEED on the launch of the network in BiH and in SAM. BiH trainers out of which 21 were representatives of commercial banks and savingdatabase published and available on SEED web site. Database completed houses.for Albania, FYR Macedonia, and Serbia. MCA 2000 Macedonian Association for Management presented steps taken to realize

FDP II Business SEED co-sponsored a Balkan Business Case Challenge 2002 is November FYR Macedonia an international certification program. MCA 2000 is partnering with GTZCase Challenge with World University Service (WUS)-Austria and other partners. SEED provided and SEED to establish a consultant certification program. This initiativeSEED -wide case writing assistance and a judge for the Business Case Challenge. The has developed into a separate SEED project.

competition involved 36 senior year and graduate-level university students Municipality SEED has worked with Municipality and local stakeholders to increasefrom all regional countries. Members of the top three winning teams were Zenica/ Prijedor their capacity to create and manage institutions/organizations, programsawarded scholarships to summer sessions at the IEDC Bled School of BiH and tools that promote entrepreneurship and to support SMEs in theirManagement in Slovenia and at the University of Vienna, gift certificates communities. Final reports (Analysis of Competitive Advantages, SWOTfor books, and internships with Coca-Cola, Univerzal Bank, and SEED. Analysis, Vision and Development Projects) were presented and deliveredTwo Bosnian students and one student from Belgrade were awarded one- to stakeholder forums and Municipality Councils. Priority projectsmonth paid internships at SEED, which they will perform during 2003. identified included: Establishment of an Agency for Economic Development,

General This is a 25-day program conducted in five 4-day and one 5-day modules. Financial Support Fund and a One-Stop-Shop project.Management 3 modules (Financial Management, Human Resource Management, Marketing Strategic Planning The initiative of this project is to enable the development of the StrategicDevelopment Training and Sales Management) were delivered this quarter to 63 participants from Training Planning process for the individual SMEs through in-company intervention.SEED -wide 27 companies / organizations. Two modules - Strategic Management, and the BiH SEED staff facilitated the Strategic Planning process for Arcon-in, a small

final one that included site visits to local businesses in Thessaloniki, Greece, construction company in Zenica.were delivered this quarter to 39 participants from 17 companies/organizations.The program is designed to provide skill enhancement for members of Serbian Chamber of 5 training modules were dehvered to the key employees of the Serbianexecutive management of SMEs and for independent consultants, Commerce IT Chamber of Commerce in Belgrade and Valjevo. Training lasted a total ofincluding a train-the-trainer component. SAM 18 days and resulted in staff becoming qualified to establish a replication

link between Belgrade and Valjevo offices. A planned linkage betweenHR Management 13 individuals representing 12 different local SMEs were trained in HR Valjevo and Belgrade office has been established. Planned linkageTraining Management + train-the-trainer component. This approach is consistent between Belgrade and Novi Sad offices Is in process.SEED -wide with BDS best practice and appreciated by the local trainers. TDI Macedonia SEED has entered into partnership with the Municipalities of Ohrid andIn-company GMDP The aim is to develop participants' capabilities to successfully manage FYR Macedonia Struga and 7 private hotels to develop the tourism industry in Ohrid. OneBiH their businesses. All training modules have been tailored to the company's training on European Regulations for Tour Operators - How to attract

specific needs. SEED staff have completed one (1) training program for western European Tourists in Ohrid Region (Thomson case study) wasPING, the software company in Sarajevo, BiH. Training covered financial delivered on May 8 and was attended by 20 participants. Eight foreignmanagement topics. SEED has provided simple tools related to specific tour-operators visited Ohrid (2 from UK, 2 from Germany, 2 from Hollandcompany issues (tool for monitoring key financial indicators and business and 2 from Switzerland).pertormance monitoring).

WEI - VIDRA VIDRA is a non-governmental women's organization that has beenISO 9001 The aim is to certify the products that IS SEED typically produces in conjunction Technical Training operating since 1997 in the greater Banja Luka region of BiH. SEEDSEED -wide with International Consultants and the Network. Quality Assurance Management BiH conducted technical training courses: "Accounting for Non-Accountants",

and Management Representative have been selected. Quality Assurance Team "What will an international lender want to know about my business",was established and team members were introduced to the process. Work "Introduction to Strategic Planning and HR". With the conclusion of thisprocedures for the Quality Assurance Team have been adopted. Process of Project, there are 13 trainers equipped to conduct basic courses inAudit and Analysis of the current situation is completed. Project put on accounting, development of a business plan and strategic planning andhold while SEED organizational changes are completed. human resource management.

In FY 2003, SEED undertook 16 business enabling environment inidatives, launched the "Business Zone", in the area previously used by the old Zenica steel-

including surveys/studies, publications and input into donor/governmett strate- works, to support new and existing businesses and investors. These focused and

gies on SME development and poverty reduction. SEED's contributions in this constructive efforts are examples of public/private partnership that would not have

area during the last year include: been possible in the past. If successful, these models can potentially be replicated

across the region. Each Municipality has committed £300,000 from their annual

Local Economic Development (LED) in BiH budgets for financing the implementation of these strategies. SEED will remain

A Local Economic Development program was developed for the municipalities of engaged with the Municipalities by providing technical assistance, supporting the

Zenica and Prijedor and was based on the creation of public--rivate partnerships implementation of Municipal Strategies, assisting them in the promotion of these

in these communities and the implementationi of capacity and institutional build- strategies and creating a financial action plan.

ing projects aimed at strengthening the private sector and StiEs in particular.This

project also aimed to improve four main areas in these communities: (i) business

environment (ii) hard and soft infrastructure for SME developimient (iii) SME access

to finance and (iv) human resources. Strategies for Entrepreneurship and SME . -

Development were finalized and presented at the conference for domestic and

international governmenital and noni-governnmental organizations, institutions and

donors. In addition, each Municipality developed three detailed business plans for

projects defined by the strategies and prioritized anid selected as highest priority

e projects by the Stakeholder Forums. Each municipality has chosen to work on tr-

business plans for a business incubator and local economic development agency. rPrijedor already established the agency (PREDA) and created all the preconditions

for the establishment of the incubator. In recent inonths both municipalities have

publicly launched 2 separate initiatives. Prijedor has set up an "One-Stop-Shop"

concept designed to cut down documentation prpcessing time anld reduce bureau- Above: SEED representative hands over donated IT equipment to the Prijedor Municipal Mayor foruse in the one-stop-shop project, entirely financed by the Swiss Agency for Development and

cratic obstacles, thus greatly assisting SMEs. More recently, Zenica has officially Cooperation (SDC)

I Ll 11 1 L! SL

Alternative Dispute Resolution (ADR) Introducing Factoring For Regional SMEsRecognizinig that slow and ineffective courts discourage business risk-taking Factoring represents an alternative means of financing for businesses and hasand foreign investmiienit, SEED has embarked on a major effort to opera- been successful in this regard in countries of a similar profile in Easterntionalise mediation as an alternative to commercial courts for the settlement Europe. SEED and local experts have partnered together in reviewing theof disputes. Mediation is one of the most widely used forms of ADR and has environment for establishing factoring companies in BiH and SAM. Draft fea-been identified as a viable alternative in BiH, following a recently conducted sibility studies have been completed which define the obstacles to setting upstudy by Independent Judicial Commission (IJC) and following recommenda- factoring companies and provide recommendations on key points of legisla-tions made by FIAS and as part of the World Bank Business Adjustment Credit tive reform which need to be carried out prior to factoring companies being(BAC) for BiH. As a result of SEED's efforts combined with local and inter- set up. This is part of a larger project finaniced through The Austrian Trustnational experts (and the rcspective Ministry), key legislation was drafted and Fund for SAM and BiH.introduced to the Bosnian governmenit. Following preparation of the legisla-tive framework, SEED is plannling a series of traininigs oni imiediation ailmled at Herbal Development Initiativejudges, lawyers and future mediators, who will be the first ones to practicemediation once the new law is passed. The training program is designed byCanadian Institute for Conflict Resolution and will be delivered in partner-ship with the Mediators Association. ACapacity building will allow the Association to offer training and certification. Todate the Canadian Business Enabling Trust Fund has funded half of all costs asso- ,.ciated with the project, with the balance coming fromii core SEED fuinding. -

The main objective of the intervention isn-inJat r a to give support to judicial reform already .' .

underway in BiH and to allow SMEs eas-aX?atd ZNi''I xmv ier access to justice. :- -,..

..... , . = ; . ..i..I . To test out new regulations and proce- .- .-. ' -_ .. .~ - .-.-. ; '-':':.,,,.dures and to assess the impact of media-

tion on commercial disputes, pilot proj- - -- ------ ---.. _ ... *-.- . O.- .....-...... ects are planned for one court in each Of Above: Some popular herbal product s from local producers.

; - ~- ,': -:- ''. ... the two entities.The results will serve as a SEED has worked closely with IFC's Corporate Citizenship Facility (CCF) on a

-'v'. Z ' orbasis for improvements to the system and new program, the Balkans Herbal Development Initiative. The program has pro--_ u ,:, :: wi- will include a "lessons learned" phase. moted a more effective, profitable and sustainable herbal sector through analysis

-ua-,_ - ADR is becoming increasingly central as of key issues (including market conditions, regulatory framework, environmentala development tool. SEED has managed and social sustainability) and support to local herbal businesses.

2: zsw -m to seize the moment and mobilize need- Two seminars jointly sponsored by SEED and CCF (held in Sarajevo and... ed resources to support the initiative Belgrade) presented a report/analysis of the sector to SMEs, government agen-

.. .. .... with plans to roll out the program across cies and NGOs. The presentations addressed both the economic and export..-_-_____ .:.' ::-;: .... =__. the region in FY'04. potential of the Balkan herbal industry, environmental and social risks and oppor-

Above The first edition of the BiH Associationof Mediators Bulletin.

tunities. More specifically the reports revealed key information such as the iden- construction sector. The findinigs have also served as a basis for the semi-annlu-

tification of economically important plants and regions, endanigered species clas- al assembly meeting of the ACA which attracted over 100 memiibers and other

sification, supply and pricing of plants in local markets, etc. participants including ccntral and local government representatives.

According to IFC/SEED organizers, "The Balkans are the most important Future work will aim to enhance ACA's image in Albania as an effcctive advo-

source for herbs and medicinal plants in Europe. Both BiH and SAM could build cate for a better business-enabling environmiiienit for construction firms operating

a strong herbal sector that would have a significant development impact for rural in the country. SEED is also planning to completc 2 additional advocacy-focused

livelihoods." studies and offer an integrated package of training interventions to 4 local corn-

The next project phase will include the development of a sustainable herbal busi- panies. SEED is also supporting ACA in its applicatioln to the German and

ness in two regions, located in BiH and SAM respectively. SEED will work with Austrian Constructors Associations.

key stakeholders to help establish the association of herbal collectors and proces-

sors. Assistance will be provided by way of traininig consultancy and promotioll Environmental Brochure:of herbal products to a broader marketplace. Also proposed is the creation of a n3JWUABAIEHAAEAOSHHOT "Improving Environmental Performanceliue of organic and "fair trade" products.This schemie would help certified local IIo¢ TACPEMNHA = Improving Business Profit"producers tap into a growing European demand for premium priced products A SEED sponsored report compiled by two expert

originating from developing countries. FlASE pnoe eotcmie ytoeproriginating from ds Consultants from FYR Macedonia was presented

Albanian Construction recently. The key findings in the report include thecurrent status of environmiiiental affairs in FYR

._,. -. -Association (ACA) - - - Macedonia with a special focus on the SME com-

Established in 2001, ACA is a munity. Furthermore the report provides an

Business Association represent- overview of National environmlental legislation and

-3 > itc; ' ^ e ing 132 Construction Matcrial environmental assessment requiremcnts for interna-

.--.s'? > ! Scompanies in Albania. tional financial institutions.

- - Z2 F -- ]11 SEED has worked closely withl Several local case studies demonstrate how an

---------- a' ACA to belp boost the nian- investment i improving environmntal perform-

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, ihc \E E " I ' 1 | l i . r ' .' I ' ! ! ! _ | ., I . .. ' _iI . II, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~: Il-il- Ir3> ; r. Ih. IC -' il, i I I Ii-E id ;I|-t I L .lIih , .JIriI I 1 .

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A~~~~~~~~~~~~~~~~~ Righi Fri jr, Z U. u I'''' 1- I. > I 1 , 1 rl>l a c Ind ii -l,

-%ir r!%%[- jL2-t- / ~~~~~t! irr.J I,,s I L1 . d..;i hJ <.- .......j t

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ADR Legislation SEED supported visits by drafters of the necessary legislation to IBRD-FIAS-SEED SEED has worked with the World Bank & key SME and BusinessTraining the key mediation associations in Canada and the United States BiH Association managers in preparation for two workshops onBiH as well as a regional conference on ADR in Zagreb. Necessary administrative and regulatory reform, part of the World Bank's

legislation was drafted by the working group and coordinated by BAC (Business Adjustment Credit). SEED also provided input forSEED. The working group with SEED guidance completed the revisions to BiHs PRSP (kPeyconstrains to business operations forLaw on Mediation Procedure that covers certification and procedure OHR's "Bulldozer" initiative; and continued to provide assistanceof mediation. The laws have been endorsed by OHR and the BiH to Donors on pledge registry and business registration reform.government. SEED's work with World Bank continued with bankruptcy, business

BDS Demand Report was based on a sample of 250 enterprises in 7 main districts. registration and collateral lending. The law on bankruptcy wasBDS Demand Report was based on a sample of 250 enterprisescompleted with SEED participation. The law, has been sent toSurvey Participating enterprises were selected based on priority sectors: parliament by the Fed. and RS governments.Albania Agribusiness, production, construction, IT, transport and trade. IBRD-FIAS-SEED In Albania SEED participated in IBRD's Poverty Reduction

Conclusions include: 1) low demand for Business Services; 2) Albania Strategy Credit mission. SEED provided input to FIASBusiness are not aware of existing services and benefits, 3) Fee Administrative Barriers work.for service is seen as a cost; and 4) Highest demanded for services IBRD-FIAS-SEED In SAM collaboration with the World Bank led to separateaimed at legal compliance, i.e. auditing, tax and customs etc. SAM project support on Business Registration reform. All IBRD

Collateral Lending Project aim was to address the implementation phase of the new policy work is reflected in distinct projects.Albania pledge law. Training for the Albania lawyers, lenders and business IFC-SME MACRO The SEED developed study "SME impact on economic growth in

owners consisted of an overview of the Albanian collateral lending Study Albania" was presented to experts on SMEs from government/donorsystem, process of registration of collateral, enforcement procedure, Albania organizationslBDS and Institute of Statistics focusing on methodologyseizing the movable property and selling the movable property by developed for measuring impact of SMEs to economic growth. Thecreditor. study reveals that 90% of GDP is generated by SMEs in enterprisesemploying 20-50 people. Business developmental policies targeting

BAC Ph I A report has been completed, submitted and presented to issues faced by enterprises employing 20-50 employees willAlbania government. Key recommendations include: a) Strategic Planning have the greatest impact on economic growth.

Exercise to help business and government develop an agenda; Inspections SEED has collected all laws and regulations in regard to inspectionsCommunicate the role of the BAC to stakeholders; Procure BiH at all levels (municipal, cantonal, entity level), preparing the basisresources to implement programs; b) Representational and Regional for the roadmap and recommendations for streamlining andIssues; Implementation of Laws; c) Short-term Administrative simplifying the inspections work. The joint effort has resulted inRecommendations - e.g. Mobilize Adequate Staff and Financial completion of the Inspections report, which provides a summaryResources to Conduct the Secretariat Function. of information and an annex of supporting documentation

BDS Demand Surey A survey ofneeds, experince and percepion regarding usincludinglu all arelevantalegislation.nBDS Demand Survey A survey of needs, experience and perception regarding business Inspections SEED contracted local research agency to conduct interviews withSAM development service of SMEs. The sample included 382 small and SAM 200 SMEs on inspections and how they effect business operations.

medium size enterprises from sectors targeted for SEED's intervention Results were compiled in a study that complements FIAS' evaluationin 6 regions in Serbia: Findings will be used in SEED intervention of legislative issues facing inspections. The study was distributedto strengthen BSP's capacities and increasing their ability to to FIAS for comments, to be compared with their findings on theoffer commercially viable services to SME's. investment climate in SAM.

Factoring This is a comprehensive review of the environment for establishing IT Strategy for In cooperation with GTZ-PSP (Private Sector Development) SEEDBiH of factoring companies in SAM and BiH. The FYR Macedonia has worked on developing a strategy for development and growthSAM first drat of the of te BiH factorig report is cmpleted. SEEDof the IT sector in FYR Macedonia (more specifically with theSAM first draft of the of the BiH factoring report is completed. SEED software developers). Research data has been collected and a

ha also received draft feasibility studies for the establishment of draft version of the sector analysis has been completed.a factoring company in SAM and BiH. Registration Reform - In cooperation with the Ministry of Economy and Privatization Serbia,

Herbal Development As a follow up to the Balkan Herbal Forum, SEED is undertaking SAM SEED organized 3 workshops to support reform of the businessInitiative work in partnership with IFC's Corporate Citizenship Facility (CCF). registration process. The purpose of the workshops was to presentBiH International and local consultants presented results of the first the new draft Law on Business Registration, which was in part draftedSAM part of the their work to over 50 SMEs and international agencies by IBRD and a Serbian working group. The Working Group is currently

in each country. Key information in the reports include: Identification Issues raised Interviews withes ovelra20 SMtE address some of theof economically important plants (200 each country), quantities how they effect business operations were conducted. Results wereand prices of plants on market and a list of endangered species compiled in a study that complements FIAS' evaluation ofor those that might need special attention. legislative issues facing inspections.

x i k S -@||v1 s

SEED-Environment This brochure informs SMEs on how to incorporate environmental New Laws SEED has tracked progress of the FBiH & RS Parliaments in relationBrochure friendly best practices into daily business operations and profit & Regulations to the newly proposed laws and regulations. A bulletin Lex NovaFYR Macedonia from it. 1,500 copies were printed and distributed to SEED's clients, BiH (4 issues total) was published. It consists of info on proceedings

NGOs, university, Financial Institutions, BMOs. Key findings include: in FBiH and RS Parliament pertaining to laws and regulations thatReview of current status of environmental affairs in FYR Macedonia, could effect SMEs. It was distributed to the internationaloverview of national environmental legislation, Environmental community, business service organizations and other interestedassessment requirements of International Financial institutions etc. organizations and individuals etc.

SEED-Municipality Studies were completed in SAM and Albania and include prices SEEbiz.network SEED is handing over the portal in BiH and SAM to a localFEE SURVEY - SAM, for all municipalities. The results were compiled and presented BiH commercial company (SAYBER). In FYR Macedonia SEED & partnerFYR Macedonia in two brochures. Findings in SAM suggest that different means FYR Macedonia GTZ are publishing a local tender seeking a similar takeover. The& Albania of calculation lead to less transparency. SEED findings were published SAM database is populated with 600 new private companies. Aggregated

in electronic news, distributed to SME Agencies, relevant Ministries, usage statistics for SEEbiz.net and SEEbiz.net.mk betweenChambers of Commerce, municipalities. Taxes in Albania at the 10/01/02 - 12/25/02: Total number of hits: 763,307 Totalmunicipal level are more basic and with little variation. number of users: 15,870 Average hits per user: 48 Average hits

Financial SEED consultant submitted a final proposal of draft law on financial per day: 9,058 Average users per day: 186Leasing Legislation in leasing to the Interministerial Working Group. SEED organized a Assessment of Serbian This report "Restructuring Chambers of Commerce (COC) andSAM and BiH roundtable with Government and financial institutions for the

purpose of discussing the proposed law. SEED's work has triggered Chamber System Industry of Serbia" was officially accepted by Serbian COC. Thechanges of the Customs Policy Law as SEED sought input from SAM report provides a long term proposal for the reorganization of theCustoms and Fiscal Assistance Office (CAFAO). Ministry of Finance structure and activities of the Chamber.accepted SEED's proposals regarding tax aspects of financial Review of SEED - The revised SME Map was presented to the Government, theleasing draft and consequently the Law was approved by the SME Map donor community, and representatives from the most importantSerbian Government and forwarded to Parliament for adoption. Albania commercial banks.In BiH, the Law on Financial Leasing was agreed to by the BiHworking group. Upon formation of the new Government, the law Macedonia Ministry of SEED reviewed the SME strategy of the subsequent entrepreneurshipwill be submitted for adoption. Econ. - SME program developed by the Ministry of Economy and delivered a

Kosovo Collateral Law The purpose of this project is to address some areas of concern Development report to the SME Department outlining the structure and directionSAM in the implementation phase of the new pledge law. This resulted FYR Macedonia of their work, with specific recommendations related to the

in better informed Kosovar lawyers and judges (re implementation Entrepreneurship Agency and the Private Sector.of new collateral law), improved awareness on the pledge registration SME Newsletter SEED has issued 2 publications of the SME Newsletter. Eachsystem. SEED delivered 7 seminars throughout Kosovo with a total SAM publication included 300 printed copies and 100 sent via e- mailof 195 participants. SEED partnered with USAID in Kosovo, the to relevant donors and Ministries involved in SME development.Kosovo Pledge Filing Office and the Kosovo Chamber of Commerce. The Newsletter was issued in cooperation with most relevant

Country SME The revised SME Map was presented to the Government, the donor donor organizations and Ministries in SME sector. The newslettersMap update community, and representatives from the most important include information about Legal/policy activities, SME financeFYR Macedonia commercial banks. and non-finance activities.

Ut,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Serbia's New Leasing and Sales Tax Laws to Benefit SME's final decision on these issues, however, without SEED's efforts to link commer-Building on the preliminary work to promote leasing, SEED facilitated the pass- cial interests with government policy, the new law would have been less effectiveing of a new leasing law in Serbia in 2003. The law, passed by Serbia's parliament at attracting leasing companies to Serbia. SEED worked closely with both IFCon May 27, authorizes the creation of new independent leasing companies with and IBRD, with the latter having made leasing a conditionality to its Privateminimum capital off 100,000. It also sets clear and transparent standards for their Sector Development Credit.supply of equipment to local companies on contract.As a result of SEED's work, In addition SEED and IFC played a major role in improving the tax environmentcommercial interests contributed significantly to framing key tax and customs for financial leasing transactions which is likely to result in amendments toissues in the legislation. The government working group ultimately made the Serbia's Sales Tax Law.

Report on Compliance with 2nd Tranche conditions ofBusiness Environment Adjustment Credit (BAC)As part of its effort to improve the business environment in BiH the World Bankboard has approved a $44.OM Business Environment Adjustment Credit (BAC)

L , . in 2002. Progress on Second Tranche Conditions have been fully or partially ful-, O filled. SEED contributed staff (a legal and policy specialist) and the following was

achieved:

As part of BAC's reform of the business inspection process, SEED has helped

construct a detailed "roadmap" of all laws and regulations in regard to inspectionsat all levels in BiH (municipal, cantonal, regional, entity level). SEED has hired a

X -- _ consultant in each entity to prepare summary reports of all relevant legislation.The reconmiendations aim to streamline and simplify the inspections work and

, xs -+ li - ~ tmeet the explicit conditionality of the Credit, which is intended to reduce the4,. 1 i s* average aggregate number of on-site inspection days spent in a company from 28

to 15 or less in the RS, and from 18 to 12 or less in the FBiH.

Above: Leasing is expected to help SMEs access finance for the purchase of plant and equipment,including distribution vehicles as shown above.

Introduction of New Operating Structure SEED Organizational Structure Going Forward"Platform - Approach"SEED recently undertook a miajor review of its operations AlExNdERA PAiNAER

and is in the process of receiving its mid-term operational

review. One of the early outcomes has beeni to undertakeCHEFIAEOFCRJ-M,a chanige in its approach in order to facilitate increased TBD_________

integration, mobilization and impact and strengthen focus

on critical client needs.

At the core of the changes lies the fact that we have nowALNIBOIANDYRMCOIASBAADdeveloped an integrated approach toxvards the delivery of HEZGVN MNEER

COUNTRY PROGRAM COUNTRY PROGRAM COUNTRY PROGRAM COUNTRY PROGRAMproducts and programs to our dlents, which ensures thatMAGEMNGRMNGRMNGRwe have a more focused approach with a broader range og, ~ ~ B~l~ ~ hD~-Z-Mf k ... Nkd

products being tailored to the needs of a smaller group 9t COUNTRR MANAGEMENT TEAM COUNTRR MANAGEMENT TEAM COUNTRY MANAGEMENT TEAM COUNTRR MANADEMENT REAM

clients.Scope, integration (in-house and/or external), imp/ct, PMamLde PaareedrPafamedrPatrmLeaderPalrmLae

mobilization and rephicability are fast becoming our./keyPaf-Ld.Platoror Leader PlaMar- Leader Platlarm Leader Platfarm Leader

I operating parameters. StcIuFive strategic dlent groups have beeni set: Linkages, Access --------------- S E ED WI DE_ POO L (B DO0s , B D A s I T Cs)I..........

to Finance, Business Membership OrganizGitions, -For

"Iistitutional Building and Capacity Buildiiig.I FD~~~~~~~PP IETP LOCAL CONSULTANCY NETWORK INTERN PROGRAM

The platforms s aimi to reovide and facilitate a ricmer onferof resources to include: - -has - ----------------------------------------a In-house resources;

i Cosisultiing iietwork, training n setwork;o Regional and international consultants.

I

This table below represents donor funds committed to date: Donors and the SME Department. This system is enabling both SEED manage-ment and project leaders to better plan, manage and implement projects as well

Donor Participation as to measure the outputs and impact of SEED's work. Both SME DepartmentDONOR MINISTRY/AGENCY COMMITMENT DISBURSED and OEG recognized SEED as a leader amongst Project Development Facilities

(US$equiv.) in system development and data compilation/analysis and expressed their sup-Austria FGG 2,271,494 2,271,494 port for continuing efforts in this direction and exploring opportunities forCanada CIDA 1,364,866 1,364,866Greece Ministry of National Economy 250,000 250,000Netherlands FMO 5,000,000 2,000,000Norway Ministry of Foreign Affairs 3,200,000 3,200,000 Staff DevelopmentSweden SIDA 2,239.485 2,239,485 SEEI) has placed heavy emphasis on staff development. Our training program isSwitzedrKingdom SECO 94,00 00 91400 00 one of the most flexible and generous and allows staff to freely pick the courseUnited Kingdom DFID 914,040 914,040 that best meets their aspirations. Credits are earned over time and allow for aSlovenia Government of Republic 200,000 200,000

of Slovenia number of days and costs to be covered.IFC 6,000,000 4,500,000

This vear was no exception and just over 50% of our staff took some trainingTOTAL COMMITMENTS 25,439,885 time out.TOTAL DISBURSED 21,939,885

Metrics & Evaluation Description SEED Staff No.Merc , vluto IT Related Training 7PROJECT TRACKING AND SEED's staff and manage-

P- V .RS MANAGEMENT REPORTING SYSTEM Masters in Business Administration (MBA) & 8_~~~~~~~~~~- ---- ---- m ent d sgne an i ple_I ment designed and imple- ~Economiics Related Masters

mented a new Project Trac-king and Management Re- Chartered Financial Accounting Course (CFA) 4

* ;. ; ~ ... ; . ;.+ . ; .... porting System (PTMRS) Language Studies 6that covers the full range of Tertiary/University Studies 4SEED's operations, includ- Business/Management Subjects 6

ing annual and project Professional Association Membership 1

bu>8 s wr + _dUaget, prOJeCt implemenFta- Environmental Auditing Certificate I---- -- -, -------- tion plan, client informa-

tion, expenses and staff timecharges, quarterly project

monitoring reports, customer satisfaction and impact assessment information.PTMRS provides a variety of reports and real time data on projects at countryand SEED wide levels, including the scorecard and metrics reports produced for

SEED's TeamsSerbia and Montenegro Team Bowaa and Herzegovina Team

j j S r~~ ~ ~~~~~~~~~~~~~~~~~ - a

From left to right: Milos Popovic,JasminaVignjevic, Management Team From left to right: Denois Mesihovic, Denis Obarcanin,

IvanaVranjican, Olivera Sredojevic, Stevani Gregovic, Zdcnka Putica, Alrmr Ahmethodzsc. Ediin Terzic, Amra

Natalija Cordero, Mirjana Popo-ic, Djordje Petric, Lania Zecevic, Samzira Sauvage,Ainila Dedic, Sasa Zoe Miric,

Vukovic,Vladimir Ilic, Sonja Velasevic. Milica Vukadinovic, -. Ismeta Agic, Jasna Arniautovic, Igor Tutuijevic, Davorin

Aleksandar Pdavic Pavelic, Gordana Alibasic, Tamir Mostarac, Irena Vujevic, Ajla

Seated: Slobodan Nakarada, Mehrdad Eteniiad, Tanija . - Dizdarevic, Benjamiin Reno-Weber,Azra Delahc, Lada

Dramillcanin _ | * * 7 ¢ Busevac, Nerma Karic

Not present: BiserkaJeviriijevic- Drinijakovic,Jelena Seated: Lejla Music, Senada Hadzagic, SmiljanaVuletic,

Avramiiovic, Predrag Matic Dragan AjariovicNot present: Goran Zaric, Ivana Curic, Adniani Mededovic,

Sanir Besirevic, Senada Havic, Iso Abinun, Stevo Topalovic,

Adnan Dulic

Albania Team Frrn lefi to right: R,hmni KliElrbtndi. Nlehrdad FYR Macedonia TeamEveinil Anil, Bi.Iilrl,. le^.anrder Pair.e SIb.-.L.n

_ ' z .J ̂kar.Ja, Lejli Dr.grk. Zeara, NiVrrin.n .L

-Not presenr- lne NicNed_

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From left to right: Fatbardh Cangu, Doriana Bilali, Keler From left to right: Zoran Martinovski,Valentina

Gjlka, Silvana Rusi, Fatos Hida. Popovska, Afrin Hajredin, Natalija Stojanova Pesevska,

Seated: Ledia Terpo, Enkelcda Kuka, Anila Bashllari, Irena Gjorgi Miskovski, Magdalenia SoIjakova, Goce Toleski,

Gribizi Valentina Paskalova, Dragan Kolevski, Anica Markic,

Not present: Tomni Papadhopulli Marjan Vezenkoski, Marina Spasenovska

SEED(Headquarters)

The World Bank GroupHamdije Kresevljakovica 19/1V

71000 SarajevoBosnia and Herzegovina

Tel. (+387-33) 251 -555Fax (+387-33) 217-762

www. if c .org/seedContact: Alexander Paine

Belgrade Field Office Skopje Field OfficeSEED SEED

Kneginje Zorke 96-98 Ulica Makedonija 9-11/11111000 Belgrade, Serbia and Montenegro 1000 Skopje, FYR Macedonia

Tel.: (+381-11) 3023-750; Fax: (+381 11) 3023-740 Tel.: (+389-2) 223-306; Fax:(+389-2) 223-298Contact: Slobodan Nakarada Contact: Zoran Martinovski

Sarajevo Field Office Tirana Field OfficeSEED SEED

Hamdije Kresevljakovica 19/1V Deshmoret e 4 Shkurtit, nr 34, Sky Tower 8th floor71000 Sarajevo, Bosnia and Herzegoviina Tirana, Albania

Tel.: (+387-33) 251- 555; Fax: (+387-33) 217-762 Tel.: (+355-4) 231-401; Fax: (+355-4) 231-260Contact: Lejla Dragnic Contact: Anila Bashilari

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www. if c .org/seed

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CO-FINANCED BY:

\ ~~~~~~~~~The Worlr Bank Group '-E loeona Fiac Copoa IFCThe W.rid 13~4 G,..p AUSTRIA CANADA GREECE THE NORWAY SLOVENIA SWEDEN SWITZERLAND THE R In eri F-D,ce Corp-t-

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