Evaluation of the Guarantee Fund in Macedonia

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The purpose of this evaluation was to learn from experiences of the Guarantee Fund (GF) in Macedonia in regards to Sida’s ambitions to use credit guarantees and loans for untied and flexible development financing. More specifically, the evaluation report aimed to describe the working of the fund and assess the relevance and effectiveness of the Guarantee Fund and sustainability of results.

The Guarantee Fund (GF) was founded by the non-profit organisation “Small and Medium Enterprises Development Support Centre” (SMEDSC), with technical and financial support from Sida in 2002. The Goal of the fund is to provide support for small and medium enterprises of overcoming problems with collateral when applying for finances from financial institutions. Sida was involved in the creation of the GF with a principle objective to increase the number and the size of the SME in the country and then the private sector.

The development of the GF was very successful during the first four years and it managed to reach out to the market and satisfy a demand. When the first manager left the organisation in 2006 he was not replaced and the GF has been run by a staff of three people since then. A new manager was appointed from the original staff. After a number of years with good growth rate and the introduction of a really successful instrument, loans were starting to default and the reality of losing the back-up funding from Sida changed the operation fundamentally for the GF.

The evaluation included three phases: inception and desk review; field visits and data collection, and; reporting. Apart from the staff and management at GF and the Embassy of Sweden, the team interviewed the main banking partner Tutunska Banka and Jugoimpex, which is one of the main suppliers participating in the supplier program. Three beneficiaries: Jomi Food in Veles, Mebel centre in Skorpje and Zito Farm in Kumanovo, were also visited and interviewed during the data collection phase.

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