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Bulgaria: Expanding ProCredit’s Operations in Rural Areas

Report N. 4 - January 2004









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    Bulgaria: Bank Lending to Small and Medium Sized Enterprises in Rural Areas; an Analysis of Supply and Demand
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    Bulgaria’s entry into the EU in 2007 will have a significant impact on the country’s small and medium sized enterprises (SMEs) operating in rural areas and the banking sector servicing them. EU standards and regulations related to specific sectors of industry (particularly food industry) coming in place in the next two years, as well as expected competition from the EU market, will change dramatically the scene in which rural SMEs operate. New investments are needed in order for this transition process to be successful. Commercial banks operating in rural areas have a vital role in realising this goal. This publication is part of report series published under the FAO Investment Centre/European Bank for Reconstruction and Development Cooperation Programme. The series presents sector reviews and studies undertaken in Central and Eastern Europe that cover development issues and innovative areas to increase investment in agriculture in the region. Bulgaria's entry into the European Union in 2007 will have a significant impact on the country's small and medium sized enterprises (SMEs) operating in rural areas. EBRD's Financial Institutions team, together with its Agribusiness team, has developed a Facility to mix EU grant and EBRD loans in favour of rural SMEs in EU accession countries. EBRD called upon FAO's expertise to review lending opportunities in Bulgaria's rural sector. This report was prepared to put forward recommendations to EBRD and local financial intermediarie s, on which clients the EU/EBRD Facility should focus and on the types of financial products required to serve these new clients. The analysis can be used by other local or international financial institutions interested in rural credit.
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    Good Practices in investment design, prepared under the FAO/World Bank Cooperative Programme
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    The main purpose of this study is to gain insight into “collaborative business models”14 that provide opportunities for smallholder farmers to improve their linkages to markets and that could serve as alternatives to large-scale land acquisitions. This study covers a broad range of business models15 and practices as well as explores key factors that have led to successful and sustainable partnerships. It incorporates existing knowledge, reviews the literature on the topic and presents several examples from Ghana and other countries (Thailand, Uganda and India), where such models have been successful. The desk research was complemented with fieldwork undertaken in-country. Nine case studies of private companies in Ghana that use inclusive business models were developed. Of the nine case studies, six case studies were researched in the field and the three case studies were drawn from a literature review. The nine case studies addressed the following crops: horticult ural crops (pineapple), oil palm, rubber, rice, sorghum and maize. This study does not address food crops, except for traditional export crops such as cocoa and oil palm, as they are seldom grown under contractual arrangements.
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    A macroeconomic survey of the forestry sector in Latvia 1999
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    This report presents the outcome of a macroeconomic survey of the forest sector of the Republic of Latvia. It presents issues and parameters facing public and private sector decision-makers in their respective attempts to develop this sector. It identifies opportunities and constraints to investment and proposes measures to, accordingly, either engage them or remove them. It also attempts to introduce simple methodologies to undertake analysis currently constrained by the absence of more compreh ensive data.

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