ISSN 2330-717X

Macedonia: Self-Employment Program Shows Promise

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By Aleksandar Pavlevski

The Macedonian government and civil society are working collaboratively on a self-employment-through-crediting programme that offers potential entrepreneurs favourable loans for business startups.

Candidates with feasible business ideas are selected through an open competition and have three years to repay the loan at a 1% interest rate and a grace period of one year.

The programme started in 2008 and caught the eye of officials after 4,300 people created work for themselves based on market demand.

“The allocated funds for self-employment (this year) are in the amount of 2.5m euros and will assist about 500 small businesses,” Vlatko Popovski, head of the state Employment Agency which distributes the funds, told SETimes.

Similar programmes also exist in other SEE states. Serbia offers self-employment loans of up to 13,500 euros to qualified applicants, as well as 1,500-euro subsidies to unemployed applicants with an accepted business plan. Officials in Bosnia and Herzegovina allocate about 7.6m euros for self-employment assistance for about 4,050 people in the Federation of BiH. Bosnian NGOs also offer support for future entrepreneurs through a variety of programmes.

In Macedonia, the programme forces lending to smaller startups: 3,000 euros each for up to three jobs they create. For those with greater business activity, the applicant receives 5,000 euros plus 3,000 euros each for a maximum of five new employees.

“SMEs comprise well over half the GDP and are key to Macedonia’s economic development and stability,” Natasha Petkova of the PSM Foundation told SETimes.

Supporting SME creation means job and revenue creation, and makes good business sense long-term, according to Skopje-based entrepreneurship expert Sinisha Pekevski.

“SMEs are important because they think entrepreneurially, move ahead fast, provide solutions and drive innovation. Many large successful companies started with a couple of employees, and today they employ thousands,” Pekevski told SETimes.

Borrowers praised the opportunity and said the assistance made all the difference in putting their idea into practice.

“The NGOs in particular offered practical support — from entrepreneurship workshops to assistance with local laws and regulations,” Natasha Smokova, co-owner of a recycling startup Rekomak, told SETimes.

“Their model of cost distribution made it possible to begin work without taking big financial hits,” she said, “and helped us establish contacts with local partners.”

The Employment Agency’s skills training courses and business incubator for startups complement the efforts by civil society. The incubator services include consulting and networking support, in addition to business training.

PSM Foundation incubator has supported 54 businesses since 2007 when it began working. “Through these businesses, we directly impacted the creation of over 200 jobs. The success rate is over 85%,” Petkova said.

There are however, other criteria to measure the programme’s impact. “There is also a need to measure the success of the companies in repaying the loans, which we currently analyse,” Vlatko Popovski of the Employment Agency told SETimes.

Ljupco Miloshevski obtained 3,000 euros in 2010 to establish True Tone, a business that produces mouthpieces for musical instruments.

“My son plays a bassoon. He often bought mouthpieces abroad for 45 euros. I said, why do not I make them here? I applied for a grant, went to management training and now I do what I envisaged to do,” Miloshevski told SETimes.

He markets to the Macedonian philharmonic, the state opera and ballet, and has begun exporting to Serbia. Expanding production to mouthpieces for all brass instruments will enable him to capture market share in Bulgaria and Greece.

Miloshevski explained he used the loan to purchase necessary machinery.

Because mouthpieces are made of cane imported from France, Miloshevski said he has decided to grow cane around Skopje next.

“The difference is that now I am an employed craftsman, while my previous employer considered me redundant labour,” Miloshevski added.

SETimes

The Southeast European Times Web site is a central source of news and information about Southeastern Europe in ten languages: Albanian, Bosnian, Bulgarian, Croatian, English, Greek, Macedonian, Romanian, Serbian and Turkish. The Southeast European Times is sponsored by the US European Command, the joint military command responsible for US operations in 52 countries. EUCOM is committed to promoting stability, co-operation and prosperity in the region.

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