Transcript Northern Mitrovica

Besëlidhja/Zavet Microfinance
Alleviating Poverty through Microfinance Services
Advancing the Mission:
Through Financing the Development in Northern
Kosovo
Presented by John Choi
Managing Director
BZMF
March 25, 2004
Advancing the Mission
» Agenda

Introduction
– Overview
– Geographical Focus Areas
– Demographics
– Political Landscape

Needs Assessment: Background on Northern Kosovo

Meeting the Need: Beselidhja/Zavet Microfinance

Gracanica Case Study

Your Opportunity

Appendix
2
Introduction
» Overview
Kosovo has been plagued with economic instability and inter-ethnic conflict. BZMF has emerged
as a leader in delivering innovative financial products for the poor and promoting peace and
reconciliation.

Development in Kosovo
– According to studies conducted by the UNDP in April of 2004, just over 47% of Kosovo’s population is in
poverty with 13% living in extreme poverty.
– Due to the lack of financial services to the poor, many entrepreneurs in Kosovo cannot develop their
businesses. As a result, they are vulnerable to economic shocks and are subsequently less capable of moving
out of poverty.
– Stabile social, economic and political systems requires a significant amount of investment and time.

Beselidhja/Zavet Microfinance (BZMF), implementing organization
– In April of 2000, World Relief established BZMF to help individuals and communities in Kosovo work towards
recovery and reconciliation.
– BZMF offers a range of loan products including Business Loans, Agriculture Loans, Kos Loans and Pledge
Loans.
– BZMF is headquartered in Pristina and has five strategic locations allowing service to 75-80% of the population
in Kosovo.

The mission of BZMF is to facilitate a transformation in the lives of the poor by:
– Providing innovative and customer-oriented financial products that enable micro enterprises to grow and
contribute to the economic development of Kosovo; and
– Offering financial services to the underserved markets of Kosovo.

The vision of BZMF is holistic – it seeks to:
– Develop local communities economically and socially.
– Maintain a financially and operationally self-sufficient institution that satisfies the needs of clients, staff and
investors.
3
Introduction
» Geographic Focus Areas
The goal of this project is to facilitate economic development through the provisioning of
microfinance services in the minority areas of the “Northern Kosovo Focus Areas” which includes
the following municipalities: Northern Mitrovica, Lesposavic, Zubin Potok and Zvecan.
Northern Kosovo Focus Areas
Kosovo Administrative Divisions
Leposavic
Zvecan
Zubin Potok
Urban Northern
Mitrovica
Source: “Kosovo As Seen, As Told”, Organization for Security and Cooperation in Europe (OSCE)
4
Introduction
» Demographics
According to the latest population estimates, approximately 80,000 people live in the Focus Areas.
Focus Areas Population by Region
90
Focus Areas Population
by Ethnic Group2
80
14.9
70
Albanians
6%
Other
3%
60
16.9
50
000s
40
80.3
18.5
30
Serbs &
Montenegrins
91%
20
30.0
10
0
N. Mitrovica1
Leposavic
Zvecan
Zubin Potak
Total
Note:
(1) UN official estimate based on assumption that N. Mitrovica accounts for 30% of total Mitrovica population of ~100,000; (2) Ethnic group figures
based on population breakdown percentages implied by 2003 ESI estimates (for N. Mitrovica) and 2005 OSCE Municipal Profiles (for Leposavic,
Zvecan, and Zubin Potak)
Source: OSCE Municipal Profiles, February 2005
5
Background on Northern Kosovo
» Political Landscape
The Mitrovica region has been marked by political conflict and violence between ethnic Serbs and
Albanians. BZMF desires to direct its attention to this area to facilitate economic stability and
peace in Kosovo.
In summer 1999, the Ibar
river in Mitrovica became the
line of separation between
Albanian-dominated south
and Serb-dominated north.
Division resulted from
various factors including
ethnic violence and inability
of KFOR and UNMIK (local
enforcement officials) to
control the situation.
1999
Early in Feb 2000, a rocket propelled grenade
attack on a UNHCR (United Nations High
Commissioner for Refugees) bus carrying Serbs
near Mitrovica killed three and wounded many
more. Revenge attacks followed in N. Mitrovica,
killing ten Albanians.
2000
Political leaders in N. Mitrovica
formed Bridgewatchers, a group of
young men whose purpose was to
“protect” the north from extremist
attacks. While membership is fluid,
estimates place the group at 150 to
250 people.
In February 2001, the murder
of an Albanian youth in the
north led to attacks on French
KFOR by the Albanians.
2001
2002
2003
In April 2002, a routine traffic check
escalated into an armed assault by the
Bridgewatchers on UNMIK police
officers, which wounded twenty-two.
This was the worst act of violence
against UNMIK personnel since the
inception of the mission.
Source: CSCE Kosovo Political Report, June 2002; “Unrest in Kosovo”, Answers.com
6
In March 2004, protests in Mitrovica
between Albanians and Serbs led to
two days of Kosovo-wide riots that
killed 28 and wounded ~600. These
riots represented the worst violence in
Kosovo since 1999.
2004
2005
While the violent environment in
Mitrovica is not sustainable, situation
is also not intractable – solutions can
be found. A number of steps have
been taken by various NGOs and the
UN to maintain unity of the Mitrovica
municipality and realize political
peace and economic prosperity.
Advancing the Mission
» Agenda

Introduction

Needs Assessment: Background on Northern Kosovo
– Need for Microcredit Overview
– Economic Need
– Social Need
– Spiritual Need

Meeting the Need: Beselidhja/Zavet Microfinance

Gracanica Case Study

Your Opportunity

Appendix
7
Needs Assessment: Background on Northern Kosovo
» Need for Microcredit Overview
Microfinance is a tool that can enhance economic development in Kosovo as a whole and offset
the political instability of the Focus Areas.
Economic Need




Social Need
The private sector in the N. Mitrovica region is
underdeveloped
– N. Mitrovica and Zvecan rely heavily on
public funding
The vast majority of registered businesses in
the region are small enterprises in the trade,
construction, and manufacturing sector
Other businesses include small kiosks and
shops that often operate without licenses
Demand for credit by small-to-medium
enterprises (SMEs) is highest in Prishtina and
Mitrovica, suggesting that demand for
microcredit is also very high in these areas


N. Mitrovica is an unstable area
– As recently as March of 2004, uprisings
occurred between Serbs and Albanians
– The continuing threat of violence
undermines the development potential of
the region
– Discrimination against minority groups,
including the Serbs, has created a
marginalized segment of society
Minority groups in the region continue to be
disenfranchised.
Need for Microcredit
8
Needs Assessment: Background on Northern Kosovo
» Economic Need
EN
PN
A large majority of total monthly cash income for N. Mitrovican and Zvecan residents is derived from
the Serbian Budget (former Yugoslavia) (61.1%), while a smaller share is from non-governmental
economic sectors (15.8%). Heavy reliance on the Serbian government discourages Serbs from
integrating with the rest of the Kosovo population and government.
Total Monthly Cash Income by Sources, Northern Mitrovica & Zvecan, 2003
2,500
118
208
2,000
36
266
267
1,500
213
€000s
2,301
1,000
Public Employment
Social Transfer Payments
Private Sector Employment
SOE Employment
International Community Jobs
1,193
500
0
Serbian Budget
Kosovo Budget
Economic Sectors
Total
Source: “A Post-Industrial Failure? Economy and Society in Mitrovica and Zvecan”, European Stability Initiative (ESI) Report, January 2004
9
Needs Assessment: Background on Northern Kosovo
» Economic Need, continued
EN
PN
The N. Mitrovican and Zvecan private economy is less developed than in S. Mitrovica and must rely
heavily on the Serbian government for financial aid. As a result, the Focus Areas’ economy is far from
achieving self-sufficiency.
Total Monthly Cash Income by Sources, S. Mitrovica vs. N. Mitrovica & Zvecan, 2003
100%
1.6%
10.3%
5.2%
5.1%
9.0%
International Community Jobs
SOE Employment
Private Sector Employment
20.9%
Social Transfer Payments
63.3%
Public Employment
80%
60%
42.5%
40%
15.2%
20%
26.7%
0%
Total Monthly Cash
Income (€000s)
S. Mitrovica
N. Mitrovica & Zvecan
€2,413
€2,301
Source: “A Post-Industrial Failure? Economy and Society in Mitrovica and Zvecan”, European Stability Initiative (ESI) Report, January 2004
10
Background on Northern Kosovo
» Economic Need, continued
EN
PN
Majority of registered businesses and associated employees are small enterprises in the wholesale
and retail trade, construction and manufacturing sectors
Total Registered Enterprises in Focus Areas by Type of Business, 2002
100%
22%
13%
17%
18%
5%
6%
80%
13%
7%
11%
8%
10%
60%
18%
40%
76%
70%
61%
47%
Other
Manufacturing
20%
Construction
Wholesale and Retail
Trade; Repair
0%
Mitrovica *
Leposavic
Zubin Potok
Zvecan
Total Registered
Enterprises
1,032
403
143
193
Avg. # of Employees
per Enterprise
7.2
7.4
3.4
2.4
Note:
*Mitrovica refers to entire Mitrovican province, including both N. Mitrovica and S. Mitrovica; total registered business and employee figures and
percentage shares may differ for N. Mitrovica; data broken out for N. Mitrovica is unavailable
Source: Statistical Office of Kosovo “Statistical Overview of Registered Businesses”, 2002
11
Needs Assessment: Background on Northern Kosovo
» Economic Need, continued
EN
In addition to registered enterprises, private sector in the Mitrovica region is comprised of
numerous small entrepreneurial businesses that often operate without licenses
Northern Mitrovica


Zvecan
Half of all private businesses in N. Mitrovica are
the ~300 small kiosks along sidewalks
Remaining businesses include:
– Metal-processing company, previously an
state-owned-enterprise (34 employees)
– Small textile company (9 employees)
– Few small construction companies
– 160 various shops inside buildings
– 50 cafes, bars and fast-food restaurants
– 3 hotels and 2 internet cafes
– Few service businesses, e.g. lawyers,
hairdressers, etc.
– Various tradesmen, e.g. locksmiths,
carpenters, and plumbers
– Fleet of irregular cabs traveling between N.
Mitrovica and Zvecan



The business climate in Zvecan is similar to that
of N. Mitrovica
Private sector businesses mostly include:
– Small kiosks along sidewalks
– Fleet of irregular cabs
There are few remaining SOEs:
– Trepca, now a debt-laden company that no
longer produces (600 employees technically
still on payroll)
– Kosmet Prevoz, which operates buses to
Serbia as well as local lines
– Minel Enim, construction company based in
Belgrade
– Auto Moto Drustvo, automobile association
– Mlinpek, industrial bakery
– Lux (98 employees still technically on payroll,
with few receiving any salary)
Source: “A Post-Industrial Failure? Economy and Society in Mitrovica and Zvecan”, European Stability Initiative (ESI) Report, January 2004
12
SN
Needs Assessment: Background on Northern Kosovo
» Economic Need, continued
EN
PN
The demand for microcredit in the region is high based on data on small-to-medium enterprises.

Demand in Mitrovica Remains High for Microcredit1
– A 2001 survey of small-to-medium enterprises found that credit demand per firm remained highest in Pristina and
Mitrovica, while credit demand per employee was highest in Mitrovica.
– Due to the lack of political stability in N. Mitrovica, MFIs have steered away from lending in the Mitrovica area.
– Using the small-to-medium enterprise market assessment, we can infer that Mitrovica has a relatively high demand for
credit in the micro-to-small enterprise market.
Demand for Credit in SME
Region
Avg Credit Demand by Avg Credit Demand by
Firm
Employment
Prishtina
1.37
1.09
Prizren
0.63
0.60
Peja
0.91
0.82
Ferizaj
1.01
1.05
Gjakova
0.52
0.91
Gjilan
1.13
1.09
Mitrovica
1.20
2.03
Source: Riinvest Institute for Development Research.
SME Financing and Development. Prishtina, Kosovo (2001).
1Results refer to entire Mitrovica region; data specifically on N. Mitrovica is unavailable
Note:
New Spark
GroupSME
analysis
Source: Riinvest Institute for Development
Research;
Financing and Development, Prishtina, Kosovo (2001); newSpark Group analysis
13
Needs Assessment: Background on Northern Kosovo
» Social Need
EN
SN
N. Kosovo has suffered from political instability and racial tension, like in other areas of Kosovo.

Pictures from the recent March 2004 riots in Mitrovica and the rest of Kosovo:
14
Advancing the Mission
» Agenda

Introduction

Needs Assessment: Background on Northern Kosovo

Meeting the Need: Beselidhja/Zavet Microfinance
– Overview
– Impact
– Donors
– Portfolio Growth
– Financial Performance
– Economic Need - Growth by Sector
– Social Need - BZMF and Diversity

Gracanica Case Study

Your Opportunity

Appendix
15
Meeting the Need: Beselidhja/Zavet Microfinance
» Overview
BZMF, with an experienced professional team and a proven track record, is poised to make a
substantial economic and social impact in the Northern Kosovo Focus Areas through its
microcredit loan programs.



BZMF’s business model has been successful
in many regions of Kosovo, especially the Serb
areas.
BZMF’s microcredit program can facilitate the
economical and social development in the
Focus Areas based on the following premises:
– BZMF has a proven track record in
lending to micro and small enterprises,
which represents the greatest economic
need, yet potential in the Focus Areas
– BZMF has demonstrated a commitment
to ethnic sensitivity and tolerance
through its lending practices at BZMF
and peace and reconciliation activities
through its inter-ethnic business linkage
program
The BZMF team is highly professional and the
only microfinance program with a Serb in the
top senior management team.
16
Meeting the Need: Beselidhja/Zavet Microfinance
» Impact
BZMF’s microfinance program has had measurable impact on development in Kosovo. Both
average household income and business growth in successive cycle loans show that BZMF’s
clients are growing.
Note:

Clients have an average net income growth of 103% after just two loan cycles.
– The average household net income for first cycle loans is €670 per month.
– After two loan cycles, the average household net income grows to €1,364 per month.
– These statistics are based on BZMF’s portfolio as of December 31, 2004.

BZMF has had a direct impact on generating 318 jobs over the last two years.
– BZMF only tracks employees who are paid regular salaries.
– If household members who participate in the enterprises are included, the number would be much higher.
Total monthly net income of active first cycle loans (TNIF): TNIF is derived from the loan application which is used to determine loan amount and
term limit during credit committees. This amount is entered into the MIS at every loan disbursement. Number of first cycle loans (NFL). Per MIS
Total monthly net income of active successive cycle loans after the first two cycles (TNIS): TNIS is derived from the loan application which is used to
determine loan amount and term limit during credit committees. This amount is entered into the MIS at every loan disbursement.
Number of successive cycle loans after two cycles (NSL): Per MIS. Calculation: [TNIF / NFL = €670; TNIS / NSL = €1,364; €670 / €1,364 = 103%]
Average number of employees for first cycle loans (AEF): For every first cycle loan, the number of employees, if any, is entered into the MIS. From
this data entered into the MIS, an average number of employees is calculated for first cycle loans. Average number of employees for all successive
loan cycles (AES): For successive cycle loan, the number of employees, if any, is entered into the MIS. From this data entered into the MIS, an
average number of employees is calculated for successive cycle loans. Total number of second cycle loans disbursed since January 1, 2003 (TNSL):
Per MIS. Only second loan cycles were used because including the third and greater loan cycles would result in double counting the clients.
Caclulation: (AES – AEF) x TNSL = 318
17
Meeting the Need: Beselidhja/Zavet Microfinance
» Donors
BZMF and World Relief are internationally recognized and funded. A sample of funders for BZMF
include:
Danish International
Development Agency
18
Meeting the Need: Beselidhja/Zavet Microfinance
» Portfolio Growth
Disbursements of microcredit have grown rapidly from 2000 to 2004 at a 67.7% CAGR. In 2004,
BZMF’ portfolio has grown dramatically in outstanding balance (+80%) and borrower base (+73%).
The growth is a reflection of the strong demand for BZMF’s financial services.
Total Disbursements to Micro Borrowers, 2000-2004
2,000
CAGR
(2000-2004)
Indicator
1,647
1,404
1,500
BZMF Portfolio Performance
1,376
Actual Value (Dec 31, 2004)
67.7%
1,000
Number of Active Borrowers
2,298
Number of Active Loans
1,334
689
Loan Portfolio
€2,675,298
500
174
0
2000
2001
2002
2003
2004
From a market assessment, BZMF realized that the loan term
was one of the major barriers for clients to invest into their
businesses in the most effective manner. BZMF responded to
this need by increasing its loan terms. Compare to that of
2003, the average term for loans disbursed in 2004 is 50%
greater. This change also had the affect of decreasing the
number of disbursements in 2004.
Source: MixMarket Data; BZMF CY2004 Annual Report
19
Portfolio in Arrears
1.8%
Write-Offs of 2004
1.2%
Percentage of Borrowers from
Minority Communities
24%
Meeting the Need: Beselidhja/Zavet Microfinance
» Financial Performance
BZMF’s business model has proven to be highly efficient. Despite increasing expansion in the
rural and agriculture markets, BZMF’s operation continues to increase its sustainability.
Organizational Self Sufficiency, 2000-2004
Financial Performance
Indicators,
2001-2003
Financial
Performance
Indicators,
2001-2003
Organizational Self-Sufficiency, 2000-2004
30%
150%
131%
18.2%
20%
122%
10%
102%
100%
0.6% 0.9% 2.1%
5.0%
7.5%
0%
73%
-10%
-8.4% -9.5%
-20%
50%
-30%
24%
-40%
0%
Return on Assets
Return on Equity
Profit Margin
-36.5%
-50%
2000
2001
2002
2003
2004
2001
Portfolio-at-Risk and Repayment Rate
2000
2001
Repayment Rate
95.0%
97.3%
Portfolio-at-Risk
14.2%
9.7%
Loan Write-Offs
0.0%
3.6%
Note:
2002
97.3%
8.5%
1.3%
2002
2003
98.9%
3.3%
5.2% *
2003
2004
98.2%
4.0%
0.5%
*Loan write-offs were unusually high in 2003 because of an internal fraud issue. We have completely resolved this issue and have implemented
proper controls; Organizational self-sufficiency (OSS) = all income (except donor income) / all expenses; Portfolio-At-Risk % = Outstanding principal
of loans that are delinquent / total outstanding balance; loans with delinquent payments over 100 euros is BZMF’s house limit.
Source: MixMarket Data; BZMF CY2004 Annual Report
20
Meeting the Need: Beselidhja/Zavet Microfinance
» Economic Need – Growth by Sector
EN
PN
BZMF offers products that meet the demands of microborrowers in a wide variety of sectors. Over
the years, BZMF has diversified its product line and sector outreach, especially in the agriculture
sector.
BZMF Sector Growth – Disbursements by Sector, 2000-2003
1800
Other
Manufacturing
Services
1600
1400
1200
Agriculture
1000
800
600
Trade
400
200
0
2000
Source: MixMarket Data
2001
2002
21
2003
Meeting the Need: Beselidhja/Zavet Microfinance
» Social Need – BZMF and Diversity
EN
SN
BZMF is committed to lending to all minority groups in Kosovo, including Serbian and Roma
communities, and is involved in peace and reconciliation programs that encourage inter-ethnic
business development. BZMF is also committed to providing microcredit to women, who
comprise only 6% of all registered business owners.
BZMF Female Borrowers as % of Total, 2000-2004
24%
Diversity of Disbursements
Ethnicity
102%
% of Disbursements % of Population
Albanian
Serbian
Other
Roma
Boshnjak
Goran
Turk
74.8%
21.1%
3.3%
0.3%
0.2%
0.2%
0.2%
CAGR
(2000-2004)
20%
17.0%
88.0%
6.0%
3.0%
2.0%
<1%
<1%
1.0%
16%
18.0%
14.0%
12%
8%
4%
3.6%
4.0%
2000
2001
2002
2003
2004
25
35
175
226
414
0%
BZMF Business Linkage Program
– An inter-ethnic liaison performs business linkages
between the Albanian and Serb business people and
farmers.
– Since the beginning of the business linkage program in
September 2002, the inter-ethnic liaison has facilitated 30
business linkages, 8 of which resulted in successful
business transactions.
# of Female
Borrowers
Source: MixMarket Data
22
Advancing the Mission
» Agenda

Introduction

Needs Assessment: Background on Northern Kosovo

Meeting the Need: Beselidhja/Zavet Microfinance

Gracanica Case Study
– Background
– Gracanica Results
– Zavet Business Center
– “Turkish Delights” Success Story

Your Opportunity

Appendix
23
Gracanica Case Study
» Background
BZMF has experience serving minority populations in central and southern Kosovo.

Background
– Since its inception, the Zavet branch has been involved with lending activities to Gracanica, a Serb enclave.
– BZMF is the only microfinance program that has not only a Serbian operation in Gracanica, but also a Serb
senior manager who can give direct oversight to this project.
– BZMF developed a unique lending practice customized for the Serb community by initially lowering interest rate
and making procedural changes in order to comply with the legal environment of the Serb region.
– As a result, BZMF has the highest number of Serb clientele among all MFIs and Banks in Kosovo.
– BZMF also markets itself as a local organization, so that it appeals to the Serb communities.
24
Gracanica Case Study
» Gracanica Results
The Zavet business model is an example of BZMF’s outstanding record serving minority populations.

BZMF’s Outreach to Gracanica
– The Gracanica branch disbursed about €775,500 in loan capital to 578 borrowers for the twelve months ending
December 31, 2004.
– As of December 31, 2004, BZMF had an outstanding balance of €449,345, a portfolio-at-risk (PAR)of 0.30%
and no write-offs for the full calendar year.
– To maintain a lower cost structure, the Gracanica branch serves all the enclaves located in central and
southern Kosovo.
Gracanica
Disbursement
andNumber
Number
of Loans,
2001-2003
Gracanica
Disbursement Amounts
Amounts and
of Loans,
2001-2003
350,000
200
161
Disbursement Amount (in Euros)
300,000
Number of Loans
250,000
150
126
200,000
100
309,600
150,000
56
100,000
50,000
198,850
50
77,565
0
0
2001
2002
25
2003
Gracanica Case Study
» Zavet Business Center
Zavet Business Center also provides access to important services to Gracanica.

World Relief has assisted in the development of the Zavet Poslovni Center (“ZPC” translated as Zavet
Business Center) in the Serb enclave of Gracanica.
– BZMF has provided numerous services including:
» the first ATM to serve this area
» an internet café
» a document scanning and copying facility
» a video and book library
» land line public phone
» fax service
» financial services provided by BZMF
» computer training
» English training
» business training
26
Gracanica Case Study
» “Turkish Delights” Success Story
Name:
Rasim Kosmaqi
Ethnicity:
Serb
Age:
53
Sasha Sekulic, a Kosovar Serb, lives in the enclave of
Gracanica, located in the center of Kosovo. In November of
2000, Sasha Sekulic took a €800 loan from BZMF to restart a
candy factory he had prior to the war. He used the loan to
purchase raw materials and Sasha’s business flourished almost
immediately. Sasha continued with BZMF and took five more
loans, each successive loan larger in amount and longer in
term, reflecting the growth of his business.
In addition, partnering with ZPC, BZMF provided business
courses to Serbs in Gracanica which Sasha enrolled into and
completed. The business principals he learned through these
courses has been helpful to Sasha as he dealt with the
increasingly complicated financial and business concerns of his
growing enterprise. The partnership also offered inter-ethnic
business linkages between the Serb and Albanian communities.
Through this partnership, Sasha created business relationships
with three large Albanian food wholesalers.
Today, Sasha’s business sells his candies all over Kosovo and exports them to countries outside of Kosovo. On
average, the factory produces and sells 15 metric tons of Turkish delights every month and employs 15 local
Kosovars. Sasha has fully graduated from BZMF and has access to commercial credit from banks to fulfill his capital
needs.
Commerce has a profound ability to make people put aside their differences and interact with each other. These
interactions form a critical step in promoting peace and reconciliation and hope for future of Kosovo.
27
Advancing the Mission
» Agenda

Introduction

Needs Assessment: Background on Northern Kosovo

Meeting the Need: Beselidhja/Zavet Microfinance

Gracanica Case Study

Your Opportunity
– Northern Kosovo Proposed Office Structure
– Impact Potential
– Conclusion

Appendix
28
Your Opportunity
» N. Kosovo Proposed Office Structure
BZMF’s proposed office structure will provide customized products for the Serb population and
extend inter-ethnic business development.

Office Model
– The Gracanica office is run under the Zavet structure and requires its own audit.
– The proposed office serving the Focus Areas will report to the Gracanica office.
Zavet Office for Serbs
Reports to
Gracanica Office
BZMF Hub Office in Pristina
Pristina Office
Reports to
Zavet Office for Serbs
N. Kosovo Office
29
Your Opportunity
» Impact Potential
The growth in Gracanica has been consistent and has led BZMF to become the leading lending
institution to Serbs among all MFIs in Kosovo. Your contribution can make a significant impact
on poverty reduction and economic development in the Focus Areas.
In 3 years, BZMF believes it can annual lend in the Focus Areas an estimated 800 loans and €1.2MM Euros,
based on similar levels and rates as in Gracanica.
 BZMF believes this will have enormous impact to the economic development in this region.
 BZMF believes this development will create an environment where the peace and reconciliation process between
the Serbs and Albanians will be facilitated.

Potential Loans for N. Kosovo
Year 1
100
200,000
Cummulative Loan Disb.
Cummulative Loan Disb. Amount
Note:
Year 2
300
500,000
Year 3
800
1,200,000
Assumptions include the following: 1) Disbursement Amount in Euros; 2) The population characteristics between Gracanica and N. Kosovo
are roughly the same; 3) Business characteristics and needs are similar; 4) The competitive environment is similar as well.
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Your Opportunity
» Conclusion
Help us transform the economic and social lives of the Kosovars.





There exists an enormous potential for development in Kosovo.
Microcredit is a tool that can help realize that potential. Microfinance can help lead to a sustainable economy and stable
society in the Focus Areas.
BZMF is optimally positioned to help Kosovars redevelop their self-sufficient capacity.
BZMF needs your financial support and partnership to help serve and grow the underserved economy of the Focus
Areas.
Your funds will have a direct impact on the economic and social well-being of this minority community.
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Advancing the Mission
» Agenda

Introduction

Background on Northern Kosovo

Needs Assessment

Meeting the Need: Beselidhja/Zavet Microfinance

Gracanica Case Study

Your Opportunity

Appendix
– Management Team
– Governance Team
– Audited Financial Statements
– Credits
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Appendix
» Management Team
Management Team
John Choi, Director
John Choi has been Managing Director of BZMF since 2002. Before joining BZMF, John started his career in public
accounting and financial advisory services at Ernst and Young LLP and eventually moved into M&A, corporate finance,
commodity risk management, and equity trading at an investment firm. John is a certified public accountant. John also sits
on the board of Kosovo Credit Information Services (KCIS), Kosovo’s only credit bureau, Association of Microfinance
Institutions in Kosovo (AMIK) and Zavet Poslovni Center (ZPC).
Driton Fetahu, Pristina Branch Manager
Driton Fetahu has been the Pristina Branch Manager at BZMF since November of 2003. He is responsible for the Albanian
lending originations. Prior to coming to BZMF, Driton worked at FINCA as a branch manager. Prior to FINCA, Driton
worked at UMCOR Kosovo as the manager for the stabilization income generation program. Driton also worked at Mercy
Corp in the agriculture development and housing reconstruction program. Driton has a bachelors in Economics at the
University of Pristina.
Dren Spahija, Director of Finance
Dren Spahija has been the Finance Manager at BZMF since April 2003. He is responsible for all financial management and
reporting for BZMF. Prior to becoming Finance Manager, Dren managed a private enterprise in Pristina. Dren has a
bachelors in engineering at the University of Pristina.
Dragan Grbusic, Zavet Program Manager
Dragan Grbusic has been at BZMF since December of 2000. He is responsible for the Serb lending originations. Prior to
coming to BZMF, Dragan was an engineering manager at the Kosovo power plant. Dragan has a bachelors in engineering
at the University of Pristina and a masters in engineering at the University of Nis, Yugoslavia.
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Appendix
» Governance Team
Governance Team
Kenneth L. Graber, Microenterprise Development Director, World Relief
Ken Graber has over 35 years of experience in agricultural and microenterprise development. He has been the
Microenterprise Development Director at WR since 1989. Mr. Graber administers the centrally-funded WR MED programs
and oversees the MED Service Team (MEDST) that is responsible for the technical management of all WR Microcredit
operations. Prior to joining WR, Mr. Graber was Associate International Division Coordinator-International Program
Manager at Mennonite Economic Development Associates (MEDA). His role also included providing administrative
oversight to MEDA programs in Paraguay and Uruguay. Mr. Graber holds a masters degree in Agricultural Economics from
Purdue University and is fluent in Spanish and English.
Robert Gailey, Director of MED Consulting, World Relief
Robert Gailey serves as Director of Microcredit Consulting Services. Rob has worked for more than 8 years in economic
development, including 2 years as Research Director for the global Microcredit Summit Campaign. Rob has experience in
the area of poverty measurement tools and has traveled extensively to provide training and evaluations for Microcredit
programs.
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Credits
This report was completed by New Spark
Group, a general non-profit management
consulting firm based in New York City. The
thoughts expressed in this presentation do
not necessarily represent those of BZMF nor
World Relief.
Project Contacts
Daniel Jang
[email protected]
Moses Choi
[email protected]
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