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The highs and lows of starting small businesses Romania Poultry and pig farming in Alba county The IFAD-financed Apuseni Development Project helps strengthen the economy of Romania’s rural mountain communities by promoting on- and off-farm enterprises and providing rural development services. The Apuseni revolving credit fund offers investment and working loans to people who qualify for them. Letitia Plesa, from Alba county is 45 years old and has two grown children who are students. She worked at the local knitwear factory for about 15 years but when the factory closed down, she was left without a job. In an attempt to take advantage of her professional experience, Letitia took out a bank loan and opened a tailoring business. She employed 7 to 14 women, mainly on a part-time basis, but the work was never more than sporadic. When she heard about the IFAD-funded project, she decided to apply for a loan to diversify her activities and generate some additional income. She took out a loan of US$7,000 from the Romanian Commercial Bank and used it to set up a small farm with pigs and laying hens. Pig breeding is considered a profitable business. Before she started the activity, she ascertained that there were potential customers who would buy pork from her, and she found that many people in her small town would do so. Letitia found that she had to be ready to solve problems as they arose. When she found herself without buyers for her eggs, there was pressure on her to sell something to be able to repay her loan at the bank. She came up with the idea of making noodles with the fresh eggs and flour, and she called upon her mother-in-law and two cousins to help her out. She dried the noodles, packed then into small bags and sold them. Having found a solution for the unwanted eggs, she did not give up the chickens, but started to raise hens for meat as well. She is still trying to balance the high prices of her inputs against her more meagre profits. But she is optimistic about the future of her businesses and is eager to learn of other available financing opportunities. Bee-keeping in Salaj county Angela heard about the IFAD project from the County Agricultural Directorate’s office and bought 20 beehives with US$2,452 borrowed from the Romanian Commercial Bank. She and her husband invested in a honey spinner, honey separators, cans, frames and hives, all of them new, buying them from a specialized supplier. In two years the business grew to include 220 hives. But the family has also seen difficult times. The key risk factors they face are lack of insurance and limited market opportunities. 2005 was a rainy, unfavourable year for bees and a disaster for their bee farm. There was not enough honey left for bee feeding over the winter, so they had to supplement it with sugar. But the sugar was contaminated, and 214 bee families were dead by the end of the winter. Angela is now determined to apply for more credit to build her hives back up to the number she had before. In the meantime she will find a job to support the family. This negative experience has taught her the importance of diversifying future production. Source: IFAD |
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