Local businesses and town halls as development partners
Small and medium-sized enterprises make up the overwhelming majority (over 97 per cent) of businesses in the Republic of Moldova.
Moreover, 80 per cent of these businesses are located in urban areas. Villages thus remain in the shadow, in terms of economic development, and their population is declining because of a lack of jobs.
Town halls, as drivers of local economic development, need to be guided on the role they can play in promoting the “growth” of small business in rural areas, though this will not be easy.
“I have never thought about running a business from it”
Lilia Cosmari, a resident of Singereii Noi commune, a settlement in the north of the country, is the youngest daughter in her family, having two sisters. Since she was a little girl, she liked flowers but windowsills seemed always too small a place to grow enough of them. She made her first small greenhouse seven years ago.
She explains: “For five years I managed to develop and invest in creating a modern greenhouse. I wanted very much to extend the area, but I didn’t manage to gather the necessary money, as we live over 100 km far from the capital city – the main outlet for flowers. The transport costs are expensive and the income obtained is very low. At a certain time, we came to a deadlock as we didn’t have enough financial resources and we didn’t see a future for the growth of the business. However, I was sure that there had to be a possibility to develop my business.”
Viorel Focsa, also from Singereii Noi, received a beehive from his father as a gift on his fifteenth birthday. Over many years, he discovered the secrets of beekeeping as a hobby. He has been producing honey for his family, and for his relatives and friends. Viorel states: “I managed to multiply the beehives, but the bees died several times because I was at the stage of learning and I had not the necessary equipment. I was working with very old tools, which I found in the attic, left there by my grandfather. I have never thought about running a business from it”.
“The businesses are for town halls like fuel is for an engine”
In addition to living in the same settlement, these two young people have something else in common: Lilia Cosmari explains: “In early 2015 I was called to the town hall to discuss the development of my small business”. Viorel Focsa was also called to the town hall. He was confused by this, as he was not an entrepreneur and did not understand why he would be invited to participate in a discussion about business development opportunities in his village. With many questions in their minds these small entrepreneurs went to the town hall, along with more than 40 other people.
Valentina Ceausceac, the mayor of Singereii Noi, explains: “For a long time we were convinced that we needed a platform for discussions in order to develop the economic environment locally. Thus, the businesses are for the town hall like fuel for engine. The Joint Integrated Local Development Programme (JILDP) offered support to the town hall to this end and we designed and applied together a strategy for the development of the economic environment in our commune”.
According to the mayor, at the first meeting participants were informed about the opportunities of funding small businesses and start-ups.
“At this meeting we found out about the opportunity to cooperate with the JILDP, which offered me training courses over the course of a year, guidance in business development and financial support in the amount of 5,000 USD”, says Lilia Cosmari.
Guidance and support – more valuable than money
Over the course of a year, both Lilia and Viorel registered their businesses, doubled their production volume and participated in the international exhibition, “Farmer 2016”, where they promoted their products.
Lilia Cosmari explains: “My two sisters and my mother are involved in the production and sales of the flowers and they look after the greenhouse. And me, I seek strategic ways to develop the business, given that it has become the main source of income and development for our family.”
This entrepreneur says that this grant helped her to buy a high performance greenhouse, which allowed her to dramatically expand her activities. Now, she has a vision about how to develop this field: “I am about to create an association of florists in the north of the country, so that I and other florists from the area can find an easier way to solve our problems. Also, soon I will open a flower shop in the village with specific products: floral arrangements for institutions and individuals. And all of this is due to the fact that during this last year I received support to help me develop as an entrepreneur.”
36 other small entrepreneurs from rural areas have had similar experiences, having benefited from grants and support offered by the United Nations Development Programme (UNDP) and UN Women.
All the entrepreneurs who benefited from the economic development component of the JILDP made clear that the guidance and the support offered in relation to their first steps as entrepreneurs was more valuable than money.
Valentina Ceausceac, mayor of Singereii Noi, explains that the number of businesses and the contributions to the local budget in the settlement have grown: “New businesses run by women have appeared in the locality. These results are very encouraging. And, the most important thing is that we already see a future for local economic development.”
- The Joint Integrated Local Development Programme (JILDP) was implemented in the period 2013–2015 by UNDP and UN Women.
- 38 grants have been offered within the Economic Development Component of the JILDP for the development of rural businesses: to 26 women and 12 men.
- The main fields in which these businesses operate are: agriculture, beekeeping, animal husbandry, catering, planting of seasonal flowers and tailoring services.
- UNDP and UN Women have offered training and consulting in business development for about 100 small entrepreneurs.
- Following this support, Lilia Cosmari, along with three other beneficiaries of the programme, also obtained grants from the Moldova Business People Association, which provides a special fund for young people.