SUCCESS STORIES Making a difference—the evidence of success Loan Helps Small Businessman in Bulgaria Ride Out Financial Crisis

1. dai success stories
Loan HeLps smaLL Businessman in
BuLgaria ride out FinanciaL crisis
Nurturing small enterprises by training the banks that serve them
dai Washington After being in business for nearly 20 years, had received a 25 million euro credit line from
7600 Wisconsin Avenue
Bogomil Koritarov faced losing his life’s work. the EBRD for on-lending to customers such as
Suite 200
Bethesda, Maryland 20814 the Koritarovs. After a one-month application
USA The world financial crisis of 2009 was squeezing process, the Koritarovs received a 30,000 euro
Tel: +1 301 771 7600
budgets all the way down to Rakovkska Street credit line.
Fax: +1 301 771 7777
in Sofia, Bulgaria, where sales had stalled at
dai europe Mr. Koritarov’s small furniture store, Meka. Meka’s Meka serves a niche market—about 30 percent
Suite 440
customers—individuals and businesses also businesses and 70 percent individuals—and
Southbank House
Black Prince Road victims of the tough times—simply were not buy- customizes furniture to fit needs and styles.
London SE1 7SJ ing sofas, chairs, and other products the Meka Mr. Koritarov used his loan to develop new
UK
staff built by hand. Sales had shrunk to where Mr. products while keeping prices reasonable, as
Tel: +44 (0) 20 7 420 8600
Koritarov faced closing his rented storefront and well as to buy advertising. He is now considering
www.dai.com warehouse and the small manufacturing space he applying for another loan to help Meka increase
owned. On the edge of bankruptcy, he would also production.
have to release his three longtime employees.
“Without this loan from Eurobank EFG, we
Mr. Koritarov searched for loans to pay his sup- would have not survived the financial crisis,”
pliers, revamp his business, and stay afloat. Mr. Koritarov said.
But banks were not willing to lend; in the event
they were, the interest rates were prohibitive. The financial crisis had a huge global impact,
Mr. Koritarov’s luck changed in August 2009 when particularly on Eastern Europe. Bulgaria was one
he spoke with a branch manager of Eurobank of the hardest-hit countries, its gross domestic
EFG Bulgaria about a loan using his and his wife’s product falling by 5 percent in 2009. SMEs such
home as collateral.
Mr. Plamen Peychev, the
loan officer who took over
the application, had been
trained by DAI Europe
advisors supporting the
bank’s expansion within
the small and medium-
sized enterprise (SME)
lending market, an initia-
tive of the EFG Eurobank
Bulgaria AD Project, fund-
ed by the European Bank
of Reconstruction and
Development (EBRD).
Under the SME Finance
Facility Special Fund,
Eurobank EFG, the fifth-
largest bank in Bulgaria,
DAI team leader Ivailo Gurkov, left, meets with Bogomil Koritarov and others as
workers stitch fabric at the Meka production site.

2. as Mr. Koritarov’s
felt the brunt of the
impact, as reduced
business opportuni-
ties and shrinking
access to capital
forced many to shutter
operations. The loans
by Eurobank EFG—
already amounting
to 18.5 million euro
over 21 months—are
providing a lifeline to
many of these beleaguered firms. loan officers, defined a marketing strategy, and
designed a staff incentive plan. DAI helped loan
DAI Europe adopts a flexible, hands-on ap- officers improve their credit and financial analysis
proach to meet the needs of Eurobank EFG while skills, resulting in improved SME lending results at
adhering to the principles of the EBRD’s finance the bank, as SMEs that might have been denied
advisory program. Under this project, DAI Europe loans are now more likely to be considered for
consultants have so far trained Eurobank EFG loans thanks to better methods of assessing their
risk.
DAI Advancing Human Prosperity 11.10