Alliance for Inclusive Business Development of Roma Communities in Bulgaria

DEVELOPMENT CHALLENGES The project responds to the problem of Roma sub-standard livelihoods as a result of a lack of economic opportunities, discrimination, and social stigma. The largest minority in Bulgaria, comprising between 6-9% of the total population, Roma are the poorest segment of the population.

Unemployment for Bulgarian Roma is far higher than the national average, and tends to be longer-term. Low education levels, poor access to the labor market, and geographic isolation, compounded by discrimination and other social factors, has led to chronic unemployment among Roma and a vicious circle of poverty. The main impediment that Roma face is the lack of access to commercial credit to put their economic ideas and skills into income-generating activities that will be of benefit to the whole community.

GOAL The overall goal of the joint initiative of USAID, CRS, Microfond EAD and USTOI AD is to enhance the economic livelihoods of Roma communities in Bulgaria by creating a microfinance network for vulnerable and ethnically discriminated Roma groups. The project commenced on October 1, 2006 and will continue through March 2008.

PROJECT DESCRIPTION The project activities have a two-pronged approach of providing economic opportunities and promoting role models of entrepreneurship in Roma communities. The project will sustain a countrywide microfinance network for marginalized Roma communities, addressing broader developmental goals such as poverty alleviation, economic development, and tolerance for Roma minorities in Bulgaria.

Economic opportunities for targeted Roma communities. Clients in the Roma communities will be offered a combination of solidarity lending and individual loans. In addition, a revolving fund will be established for those community members who would not otherwise be able to qualify for a micro-credit loan but have the motivation to start a small business. Furthermore, mentoring and business development support for business start-ups will be provided in the form of business planning (discussions on the importance of establishing a credit history and ethical business practices), legal aspects of running a business (assistance with registration, obtaining licenses, paying taxes), and management skills (future planning, cash flow management, stock management, setting of prices to include real costs and potential profit margins).

Public perception of Roma in targeted communities. This component is meant to influence public perception of Roma as viable, successful entrepreneurs that serve their communities. Journalists will produce a series of print articles and TV stories which cover the Roma entrepreneurs with the most remarkable achievements under the project. In partnership with the Bulgarian Chamber of Commerce, the USAID funded Roma Leadership Institute and other local partners, a series of roundtables will be held to promote Roma micro-entrepreneur role models in communities. The project implementers will also organize an annual trade fair at which USTOI and MicroFund Roma clients will be invited to display their activities, learn about each other’s businesses, and form strategic alliances.

MEMBERS OF THE ALLIANCE

Catholic Relief Services (CRS). CRS was founded in 1943 by the Catholic Bishops of the United States. The mission of CRS is to assist the poor and disadvantaged, to alleviate human suffering, promote development of all people, and to foster charity and justice throughout the world.

Working through local offices and an extensive network of partners, CRS operates on five continents and in more than 99 countries and territories. CRS aids the poor by provision of direct humanitarian assistance, where needed, and encouraging people to help with their own development. Together, these approaches foster secure, productive, just communities that enable people to realize their potential.

Ustoi AD. Ustoi AD is a micro-financing institution (MFI) that has been supporting micro-business development in Bulgaria for the last eight years by providing entrepreneurs with sustainable access to financial services while promoting partnership and mutual assistance. It is the successor of the “Ustoi” program, which was launched more than seven years ago by Catholic Relief Services. USAID has supported the “Ustoi” program activities since 1999.

Among the MFIs operating in the country, Ustoi targets the smallest economically viable businesses and offers the most accessible financial services in terms of procedures and requirements. The product is affordable in rural places as well, which assures vast program outreach potential. The company operates on a regional basis and provides services to micro entrepreneurs, predominantly women, living and working in the respective region.

Microfond EAD. Microfond EAD originates from the Microcredit Program of the Resource Center Foundation, which has started in 1999 with the support of the Economic and Business Development Program of the Open Society Institute (OSI) New York.

Microfond EAD provides financing and support to micro- and small-sized enterprises that have difficulties financing their projects through the existing banks in regions with a high level of unemployment and low economic growth. Microfond’s long term goal is to expand into a social finance institution which will accumulate capital from socially active community representatives – businesses, authorities, individuals, non-governmental organizations – and will encourage collaboration of the business sector, the local authorities, and the non-for-profit sector in Bulgaria.

^{Last updated: 16 July 2007}