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Micro loans fill the gap for Albanian baker |
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It is not easy to meet Hysen Caka. He owns five bakeries, a car service and a restaurant in the Albanian capital, Tirana. He is also the General Secretary of the Albanian Association of Bread and Baked Goods. A visitor runs from one bakery to the other to meet Mr Caka who, once found, gives a warm welcome of a toasty loaf of bread. “I just opened the fifth bakery,” he says, “and everybody gets bread free of charge on the first day.” Bread for everybody would have been an absurdity 15 years ago in Albania. Mr Caka, a former head of a cooperative during communism, remembers vividly the long queues to buy bread, milk and eggs. “During communism, we did not have enough bread to feed all the people in my village,” he adds. “The soft and fluffy white bread was a luxury. We called it ‘rabbit bread’. There was a party whenever my parents managed to bring some rabbit bread home.” The staff of life Communism fell in 1990 in Albania, but the queues were not yet to end. It was in 1993 that Mr Caka started his first bakery in Skrapar, south-eastern Albania. “Bread is the staff of life for the Albanians,” says Mr Caka. “Breakfast, lunch and dinner are summed up with ‘let’s eat bread’ in the Albanian language. We never had enough bread and we always want more. With all this in mind, I set up my first bakery and knew that the success was guaranteed.” “I started with two workers in 1993 and today my company, Alba Red employs 51 workers,” says a proud Hysen. The 51st worker, a young woman, was hired recently. Women make up 50 per cent of Alba Red’s employees.” In 1996, while most Albanians were investing their savings in the pyramid schemes*, Mr Caka expanded his business and rented a bakery in Tirana. In 1997, the pyramid schemes collapsed, affecting 70 per cent of the population and reintroducing the long queues for bread. By 1998, Alba Red was producing 14 sorts of bread and employing 20 workers. Convinced that it was time to consolidate his business, Mr Caka approached ProCredit Bank. (The EBRD owns 11.25 per cent of ProCredit which has also benefited from $1.5 million in donor support from the US government to further its aims of helping Albania’s small businesses.) Mr Caka borrowed $30,000 to buy his first bakery, what he calls ‘the mother of his bakeries’, hosting his main office and where his children gather after school. ‘The first bakery was a success,” adds Mr Caka. He then received four other loans from ProCredit, totalling $318,000, which were invested in a bread retail outlet, a car service and a restaurant where the bread is, of course, free. One of the best “Today Alba Red sells four tonnes of bread per day in the capital and on our payroll the minimum monthly wage is $150 and the maximum is $320. My plan is to expand the business and improve the baking technology. There are 350 bakeries in Tirana only, but Alba Red is among the best three,” says an optimistic Mr Caka. Asked why he chose ProCredit, Mr Caka replies “it was the only bank that would lend me money.” In 1993, Alba Red meant little to any loan officer. Banks considered his business unbankable. However, Mr Caka, being the head of the Albanian Bread Association, has a lot of connections and the drive of a born entrepreneur. He would have succeeded with or without the loan, wouldn’t he? “No,” is Mr Caka’s straight answer.. “I did not have enough savings to buy a bakery in Tirana and it was impossible to borrow from friends. Their savings went with the pyramid schemes. When I heard about ProCredit loans for micro and small business, I thought they were my Noah’s ark.” ProCredit earns loyalty Today many banks approach Hysen Caka and ask him to become their client, but he is adamant. Mr Caka adds: “I will never change my first bank.” Denisa Delia, loans coordinator for ProCredit Bank smiles as Mr Caka’s words are repeated to her. What is ProCredit’s secret? “Transparent communication and professionalism,” she answers.. “Our clients are not just files and codes. They are people and the bank’s relationship with them does not finish at the end of working hours. The development of their businesses is important to us. ” The development of micro and small businesses is at the heart of the European Bank for Reconstruction and Development, shareholder of ProCredit in Albania since 2000. The EBRD has long supported micro and small enterprises and small and medium-sized enterprises because they contribute in promoting market economies and democracies. It is in smaller businesses that entrepreneurship, competition and innovation will thrive, technology will advance and jobs will be created. * A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people in the scheme, usually without any product or service being delivered. In 1996-1997, about two-thirds of Albanians invested in pyramid schemes. Written by Marjola Xhunga, Communications Adviser. Photos: R. Hackman Contact:
EBRD Small Business Banking
27 March 2006 |
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