Re-financing Bad Dept instead of micro-credit for growth

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The intention was:

Providing Micro-Credit up to 10.000 Euro to promising young enterpreneurs to support rapid growth.

The course of action was:

Through a Business Plan Competition in Bosnia, start-up firms, as well as existing high potential SMEs were selected for financing. Excellent Business Plans were submitted, and selected by risk assesors of our partner banks in Zenica.

The result was:

Just before signing the contracts, it was discovered that a significant part of the 29 submissions were not seeking micro-credit for growth, but to re-finance existing bad debt i.e. ‘throwing good money at debt repayments’. The credit scheme was frozen and an in-depth analyses of each request was made.

The lesson was:

We concluded that covering two unique markets-new start-ups and existing businesses-- forces us to develop unique approaches. Even misuse of our support can, to some extent, be considered an entrepreneurial way of thinking, and thereby our mission is not to reject, but to modify entrepreneurs’ capability into win-win situations.

Further: