Strategic Improvements in Romania

Ai Gek Beh | VIP Assignment, June 2005

Under a newly privatized economy in Romania, many commercial banks offered financial services only to large businesses. To level the playing field for entrepreneurs, CHF International’s office in Romania made lines of credit more accessible to small- and medium-sized businesses (SMEs). In June 2005, CHF selected Ai Gek Beh to serve as a Visiting International Professional (VIP™), to evaluate credit programs and financial practices in the country. Ai Gek’s assignment was to assess the current credit program for SMEs in Romania and provide business and microfinance strategies that would help to make the programs financially and operationally sustainable.

While in Romania, Ai Gek Beh observed CHF credit programs and wrote up a proposal outlining strategies that included recommendations concerning fund management and securitization. At the time of Ai Gek’s visit, CHF International had made more than 5,500 SME loans with a total value of over 25 million dollars. CHF’s credit program was well-received and in high demand. Loans facilitated the development of housing, commerce, small industry, service, agricultural/rural and production sectors, and enabled access to credit for those with income levels as low as $100 per month. CHF International has had an operational history of over ten years in Romania, serving the SME sector. Since 1994, the portfolio of CHF Romania has grown from $150,000 to over 8 million dollars. CHF has operated in over half of the counties in Romania, partnered with more than forty local NGOs, and developed financing partners in the Ministry of Economy and Commerce, the Ministry of Rural Finance, and the National Agency for Development of Mining Areas.