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Professional Consulting Services Contribute to Greater Business Growth and Job Creation
During the period 2020-2021, with the assistance of the consulting services provided through the Increasing Market Employability – IME’s Pay-for-Performance (P4P) Program, around 40 Macedonian companies secured bank loans in the amount of nearly CHF 5 million. Companies who work in the agriculture, tourism and information technology sectors have used consulting services in their process of applying for financial means from banks or non-financial institutions and programs. With the additional financial means, the companies enabled continuity of their operations and performance improvement.
“The consultants assist companies in making the best decision for using their own and loaned funds, thus being able to optimally plan working capital and dimension investments that will lead to rapid growth and development.” – said Tanja Georgievska, Deputy Team Leader at IME.
In order to provide a more in-depth assessment of the impact of Pay-for-Performance (P4P) Program on the work of companies, we present the achievements of nine companies, selected according to sector and regional affiliation. Namely, these companies are located in the southeastern part of North Macedonia, and their main activity is buying and selling wholesale fruits and vegetables.
In the second half of 2021, with the assistance of the consulting services provided by IME, these nine agricultural companies used loans from commercial banks in the amount of CHF 860,061. With the help of the received financial means the companies achieve additional sales of around CHF 2 million, which represents almost a third of their total sales. Through the help of the funds obtained from the loan, part of the companies improved their liquidity, which was reduced because of previously realized investments. On the other hand, the rest of the companies managed to realize the regular seasonal procurement of raw materials, in a larger volume than before.
“The purchase of larger quantities of vegetable raw materials before the start of the season was necessary for the normal functioning of the business. Due to the previously invested own funds in the construction of a purchased center, we were not able to independently provide financial means for procurement and we had an indispensable need of a loan.”- said one company representative, a beneficiary of the Pay-for-Performance (P4P) Program.
In circumstances of increased sales, the nine agricultural companies achieved a total net income of around CHF 1 million in the second half of 2021, which is a significant contribution to their current operations, considering that they are small companies with 3-5 employees. At the same time, these companies made a total of 11 new employments and an additional 32 seasonal employments, mainly as a result of an increase in their activities. The provided financial means helped agricultural companies improve their relations with current customers, access new markets, as well as to cooperate with new foreign buyers. Consequently, the total export of these companies increased by 16% on an annual basis in 2021, where a third of this growth was assisted by the additional financial funds provided by the banks.
In the second half of 2021, the nine agricultural companies made a total purchase of around CHF 6.7 million, where around 12% of the purchase was achieved with the help of the received financial means from the bank. The companies also concluded contracts with new suppliers, where depending on their needs, the number ranged from 3 to 10 new suppliers per company.
The additional financial funds, and the received consulting assistance , contributed to long-term changes among the beneficiary companies. The increased volume of operations and access to new markets created conditions for companies to think about expanding their capacities and new investments.
“The purchase of larger quantities of vegetable raw materials, immediately at the beginning of the harvest season, contributed to meet the increasing demand of the domestic and foreign buyers. The available financial means from the approved loan enabled us to make larger seasonal purchases.” – companies confirm. One of the companies used the loan funds to expand its facilities and invest in the construction of a new building of 450 m2, which will also include cold storage chambers of 80 m2 for storing fruits and vegetables. In addition, a line for canning and packaging of vegetables is being considered, which will further contribute to the production of a final product with greater added value.
The IME Programme will continue to work on improving the eco-system of consultants who are Business Development Service Providers (BDSPs) for supporting access to financial resources and funds, application for various loans and opportunities for grants submissions. This technical support for companies through the Pay-for-Performance (P4P) Program enables improvement of the quality of products and services, opportunities for entering new markets and creates pre-conditions for creating new sustainable job positions for the highly skilled labor force in North Macedonia, especially women and youth.
