The intention
Aid agency Spark wanted to provide micro-credit to young entrepreneurs in Bosnia to support rapid growth.
The approach
Local start-ups and SMEs entered a business plan competition to obtain €10,000 micro credit.
The result
Just before the contracts with a local partner bank were signed, it appeared that a large part of the participating companies wanted to use the credits to pay off existing debts instead of realizing new growth..
The learning moment
The credit program was immediately frozen and an in-depth analysis of each application followed. Instead of a rigid refusal of credit, the incident was the reason for, successfully, to protect entrepreneurs from taking out irresponsible loans and to assist with debt restructuring. In addition, the strategy was shifted towards more tailor-made support for businesses in Bosnia.
Author: Spark
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