The Crimson Development Fund of Macedonia received the “Best Startup Fund” award at the 2014 European Business Angels Investment Fund Forum. Organized by the European Trade Association for Business Angels, Seed Funds and Early Stage Market Players (EBAN), the European Business Angels Investment Fund Forum is an annual event that brings together European angel investors, venture capital funds, small and medium sized companies, public authorities, exchange managements and entrepreneurs and discussed the measures to be taken to facilitate access by entrepreneurs from start-up to early exit stage and particularly, the ways in which exchanges can take a more active role in raising finance for entrepreneurs.
Funded by the US Agency for International Development (USAID), the Norwegian Investment Fund for Developing Countries (NORFUND), and Crimson Capital, the Fund was initially established as a donor project in 2003, but in 2007, successfully transitioned into locally registered organization that is fully sustainable and self-financing. Today, the Crimson Development Fund (CDF) provides innovative, short-term working capital finance products to small and medium sized enterprises (SMEs) in Macedonia. The Fund directly targets the problem of the “missing middle” in which vast majority of companies in developing countries cannot obtain short-term working capital financing needed to grow, employ more people, increase exports, and become competitive and viable for the long-term. CDF utilizes products such as Purchase Order Finance and pre-export financing to address the lending needs of the SME sector. In addition to its lending operations, Fund loan officers work intensively with clients to build their financial literacy and business management skills. Using borrowers’ own financial data, Fund staff teaches clients how to prepare cash flow statements, analyze cash flow, project inflow expected from sales, project cash outflows, develop and use income statements and balance sheets. This capacity-building helps clients better manage their business operations — making them better clients — and assists them in becoming more “bankable” and attractive to other lenders.
To date, CDF has made loans totaling more than $30.72 million to Macedonian SMEs, supporting over $143.61 million in new exports more than 4,483 new, permanent jobs, including over 2,395 jobs for women and 383 for minorities. The Fund is a principal provider of short-term trade finance for SMEs in Macedonia and plays a key role in the expansion and growth of SME activities in Macedonia.
In 2012, the Fund received an additional $300,000 from USAID Macedonia to establish an Innovation Financing Vehicle (IFV) designed to support business innovation and start-ups. To date, the IFV has provided $400,000 in financing to innovative enterprises. This financing has supported over $1.3 million in new sales and exports and the creation of 45 new jobs, including 18 jobs for women and minorities.