Rural Credit Gurantee Schemes Workshop, Budapest January 2006 SWISS COLLATERAL FACILITY PROGRAMME

Rural Credit Gurantee Schemes Workshop, Budapest January SWITZERLAND HAS CONSTITUTED OF A REVOLVING FUND PROVIDING COLLATERAL WARRANTIES FOR INVESTMENTS CREDITS FOR MICRO AND SMALL ENTERPRISES IN RURAL AREAS FOR FARMERS SHIFTING TO ORGANIC AGRICULTURE Available CHF 1’500’000 ( about EUR 1’000’000 )

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 PURPOSE OF SWITZERLAND COLLATERAL FACILITY

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 UNDERLYING STRATEGY  To privilege MSEs credits, which are conducive to employment creation in rural areas  To identify and encourage farmers to move from “traditional” to “organic” production methods  To familiarise Banks’ credit staff with micro and small credits  To increase the skill of BDS providers in supporting the credit formulation

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 Beneficiaries: =micro and small enteprises in rural area =farmers involved in organic farming Partners: = 3 Banks (ProCredit bank Plc., Hebros Bank Plc.,UBB Plc.) = BDS providers

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 THE ROLE OF THE BANKS =to analyse the applications according to the procdures agreed with SDC =to manage the credits and monitor the repayment of the loans and the realisation of the investment projects in co- operation with the service providers.

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 THE ROLE OF THE BDS PROVIDERS =They support the Applicants in formulating their applications (business plans, cash flows) =The BDS Providers submit the MSE’s or Farmers’ credit applications, fully documented according to standardised format : - to the banks and the Co-operation office - with a written recommendation formulated on a standardised format =They are entrusted with the monitoring of their respective borrowers

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 THE ROLE OF SDC CO-OPERATION OFFICE = It approves the applications for collateral of eligible credits = It organises training to Credit of Bank Officers = It organises training to BDS Providers = It promotes the interaction between BDS Providers and Banks

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 Results achieved so far: = The programme has reached a larger segment of eligible borrowers; = More than EUR 2’500’000 have been provided as loans; = Till today 3 guarantees were mobilised = The awareness of the selected banks has increased; = The role of the BDS providers has improved;

Rural Credit Gurantee Schemes Workshop, Budapest January 2006 Challenges: = The full potential of the SCF has not been mobilized yet = There is still lack of financing for start ups and farmers = In view of Bulgaria’s EU accession by 2007 SDC is looking for handing over the avaialble funds