Evaluation of the USAID-Kosovo SME and Agriculture - Economic ...

Development Associates, Inc.business plan”) it would not be an exaggeration to say they would have needed the whole ofMcKinsey&Co to complete the target. A simple and basic business plan was probably intended.Whatever the definition of strategic business plan, KBS worked with companies to improve theirperformance, and achieve the required numerical targets. 6The development and implementation of comprehensive strategic plans require a long-termintensive support to the client. The concept could be very useful during the 2004-2008 period,but the quantitative targets should be set taking into account the effort needed for such majorinterventions and the available resources and skills. The finding is that a useful and much neededservice for transforming the emerging private companies into competitive entities has been inpart misdirected. Through what appear to be arbitrarily selected quantitative targets, the projecthas been engaged in a number reporting frenzy, instead of being meaningfully used in areasonable number of selected industries or enterprises with a high growth and employmentgeneration potential.Business plans/financingThroughout the period under review the private companies in Kosovo had a great need foroutside financing, in order to be able to expand their operations and take advantage of availableopportunities. There was however, hardly any understanding of the credit process, how banksapproach company credit and the underlying need for solid business plans. The advent of theKBF and the supporting KBS business plan development service is an excellent example of anintegrated, problem solving oriented approach, addressing a crucial need. In the early days of thetwo projects, there was clear coordination as KBS brought its best clients to KBF forconsideration. In verbal instructions from the CTO, KBS was required to refer 20 clients permonth to KBF, numbers well beyond any meaningful KBS-client relationship. The conclusion isthat the initial targets have been achieved and this is a very successful component of theprogram.A typical example is Molika, a woodworking company, located just outside of Pristina. They hadsome old, low capacity equipment for the production of heating briquettes, from wood refuse.With KBS support they identified a larger market, found better, more productive equipment andobtained a KBF loan to finance this project. Currently they operate at two shifts and this newbriquette production is the best performing part of the company.This success of the joint KBS/KBF activity is evidenced by the reported 12.7M Euro in loansextended by KBFF/RBKO to KBS clients and by the first international venture capital financed,“Greenfield” investment, realized with the active participation of KBS. The total value of theventure capital financing, obtained by the KBS client Kondiroli from an Austrian venture capitalinvestment fund, is 1.2M Euro and it sets a new standard in enterprise financing in Kosovo.6 An oft-repeated concern throughout this assessment is the relationship between the small-box targets establishedby USAID and the impact of KBS assistance. It is not that KBS did not do its job, just that the priorities anddirection were significantly affected by USAID’s numerical indicators that were in some cases irrelevant to the tasksand in others, overly detailed. The good news is that KBS fulfilled most of the USAID targets. But KBSdevelopment impact requires assessment by other criteria. The team has attempted to do that.Evaluation of the USAID/Kosovo SME 9 May 2004and Agriculture/Agribusiness ProgramsVolume I