Through the USAID FS Share contract, Crimson is implementing the “FS Share Stability Pilot Project (FSSP) in Armenia. The Crimson team began work on this initiative in December 2009. The goal: to assess SME access to finance gaps in Armenia and then to work with selected partner financial institutions to rapidly develop and deliver pilot activities, that will result in improved access to finance for Armenian SMEs by July of 2010.

The FSSP will be focused on identifying, adapting and introducing applicable financial products to increase SME access to finance, with a focus on the following value chains: (i) Information & Communications Technology; (ii) Healthcare; (iii) Food Processing & Agriculture; (iv) Renewable Energy & Energy Efficiency; (v) Trade; (vi) Retail; and (vii) Tourism.

Crimson’s work on FSSP is being carried out under a subcontract to Chemonics International.

The Crimson Finance Fund (CFF) is an innovative, non-bank financial institution that is uniquely positioned in the marketplace. CFF to provides innovative, short-term working capital finance products to small and medium sized enterprises (SMEs) in Kosovo. The Fund directly targets the problem of the “missing middle,” in which the vast majority of companies in developing countries cannot obtain short-term working capital financing needed to grow, employ more people, increase exports and become competitive and viable for the long-term. The fund utilizes products such as purchase order finance and pre-export financing to address the lending needs of the SME sector in Kosovo.

CFF provides financing to all sectors of the economy and operates in all regions of Kosovo, but gives special attention to businesses that are not being adequately served by existing financial institutions, including rural businesses and enterprises owned by women and minorities. The Crimson Finance Fund began lending in the fourth quarter of 2008. To date, CFF has made $2,461,870 in loans, stimulating $19,872,156 in sales and resulting in the creation of 197 new jobs, including 25 for women and for minorities.

Crimson Capital designed and manages this $3 million fund to provide innovative, short-term working capital finance products to small and medium sized enterprises (SMEs) in Macedonia. The Fund directly targets the problem of the “missing middle” in which vast majority of companies in developing countries cannot obtain short-term working capital financing needed to grow, employ more people, increase exports, and become competitive and viable for the long-term. The fund utilizes products such as Purchase Order Finance and pre-export financing to fill address the lending needs of the SME sector.

In just over six years of lending, the SME Fund has supplied 227 loans totaling more than $16,4 million to Macedonian SMEs, and has created more than 2,086 new permanent jobs, including over 1,038 jobs for women and 264 for minorities. SME Fund loans have stimulated an average yearly increase of 25% in revenues and 780% in profits for client SMEs, and have generated $59.33 million in new exports. The SME Fund recently received new investment from European investors, doubling its size to more than $3 million in lending capital. The SME Fund has extended loans to all regions of Macedonia, and targets all major sectors of the economy, including food processing, trade, textiles, IT, leather goods, and construction materials.

The goal of the Promoting Integrated Development (PDA) project in Peru is to promote sustainable, licit development in communities and regions affected by illicit coca cultivation in Peru. PDA builds on the previous achievements of the Alternative Development Program, which supported the transition of over 800 communities and 70,000 families (over 60% of them former coca growers) to a licit lifestyle after voluntary eradication of their coca crops.

Under PDA, Crimson Capital manages the financial services component and is working to increase and improve access to finance in Peru’s Selva region through the introduction of new products, value chain finance and training and technical assistance to local lenders. The Crimson team is currently assisting eight banks introduce a credit-linked savings product which will help rural agricultural producers obtain much needed access to finance. To date, over $4.6 million in credit has been approved to more than 2,100 agricultural producers in the target areas. More than 1,900 savings accounts have been opened, totaling over $2.1 million

Crimson's experts have also provided assistance in the development of DCA Loan Portfolio Guarantees (LPGs) with two financial institutions. Each of the LPGs is for $2 million (to support $4 million in lending) and will support wider roll-out of the credit-linked savings product.

With funding from the Norwegian Ministry of Foreign Affairs, Crimson Capital is supporting the establishment of the Kosovoa Society for Information Technology and Communications (STIKK). STIKK was established as a trade association in November 2008 and works to develop the thriving ICT sector of the Kosovo economy.

STIKK currently represents more than 55 Kosovo ICT companies and is managed by its Board of Directors and executive management. With support from Crimson, STIKK is implementing a number of activities to support the development of the ICT sector in Kosovo, including:

• Compiling market information and conducting research on the ICT market in Kosovo and in the region;
• Informing the Kosovo ICT sector on relevant trends in the industry throughout Europe and about business and development opportunities;
• Lobbying to address issues such as customs tax on the ICT sector;
• Attracting investment and businesses interested in the ICT sector in the region;
• Implementing a marketing campaign to increase public and private sector exposure to the ICT industry;
• Providing training and capacity building opportunities; and
• Working to improve the ICT education curriculum at learning institutions.

This activity was designed to build the capacity of a network of newly developed agribusiness service centers across the country. The main objective was to create a rural agricultural business promotion system that is market-driven, demand-based and customized to the end-user in the delivery of services to improve production, marketing and business practices. Under the project, Crimson Capital developed a business plan for the main service center, focused on long-term sustainability beyond donor funding.

The primary objective of USAID’s AgBiz Program is to sustainably increase the competitiveness of Macedonian agribusiness producers, processers and traders in selected agribusiness value chains (fresh vegetables, processed vegetables, bottled wine, wild gathered products, and fresh fruits). The AgBiz team is working to help Macedonian agribusinesses enter export markets for value added food products, enhance market linkages along the selected value chains, improve business management and operations, build income-generating opportunities for agribusinesses and create new employment.

Crimson is working through a subcontract to ARD on AgBiz to help Macedonian agribusinesses source capital, to enable them to expand and improve production as well as to increase sales. Crimson experts have already assisted agribusinesses access over $13.6 million in financing to expand their operations and complete trade deals. The Crimson team is also working with fresh fruit producers and marketers to install more efficient drip irrigation systems, upgrade storage facilities and enhance their export marketing capabilities.

Under EMSG, Crimson Capital provided advisory services to the Ministry of Energy and Mining (MEM), the Project Steering Committee (PSC) of the Lignite Power Technical Assistance Project (LPTAP), and the Government of Kosovo for reform in the energy sector. Activities included assistance on the development of the 3 billion EUR LPTAP program consisting of a new lignite mine and 2,000 MW lignite-fired power plant, future disposition of existing power plants, legal and regulatory reform, and the privatization to a foreign strategic investor of the distribution and supply functions of Korporata Energjetike e Kosova (KEK), the electric utility. Crimson Capital was a subcontractor to BearingPoint on this activity.

Crimson Capital developed case studies for the IFC and USAID on licensing reform, trade across borders and contract enforcement in Kenya, Rwanda, Tanzania and Uganda. The case studies focused on reforms in areas of relevance to the World Bank Doing Business rankings. The analysis looked at the history and development of reforms, implementation to date and the challenges and benefits of new approaches to improve the ease of doing business in each of the four countries.

The goal of this project was to stimulate trade and investment, create jobs and reduce poverty in El Salvador. The project targeted eight financial institutions to expand lending and other financial services to underserved markets and to introduce viable loan products that better serve SME financing needs. Of the eight partner financial institutions selected, six are commercial banks and two are Non-Banking Financial Institutions (NBFIs).

In addition to the work of the resident Chief of Party, Crimson Capital experts provided short-term expertise to help partner institutions develop new working capital finance and leasing products to better reach the SME clients. Crimson’s experts also conducted an analysis of potential products that partner banks may employ to address market gaps.

Crimson completed a detailed study for the IFC on the development of debt capital markets in Bangladesh, focusing on issuance of corporate bonds and asset-backed securities (including mortgage-backed securities). This included a thorough analysis of the current state of the Bangladesh debt market, profiles of institutional investors and analysis of secondary markets as well as analysis of the current legal and regulatory environment. The study also provided recommendations for removing critical impediments and actions to be taken in the short, medium and long term to improve the functioning of both primary and secondary markets.

• Supported the introduction of leasing and purchase order finance in the Kosovo market, including supporting the development of the Law on Leasing.
  
• Facilitated two new joint ventures totaling $6 million.
  
• Developed the DCA Agricultural Loan Portfolio Guarantee with Raiffeisen Bank, which got Raiffeisen to go into agricultural lending, hire and train specialized agricultural loan officers, and make loans throughout Kosovo to farmers and processors. As a result, the 10 million Euro DCA loan portfolio guarantee program for the agricultural sector issued through Raiffeisen Bank and was fully utilized in less than two years.
  
• Designed and implemented two Kosovo Finance Fairs, connecting more than 2,000 businesses with new credit opportunities.

• Creating detailed restructuring plans
• Assuring due diligence in technical, commercial, financial, tax, and legal frameworks
• Delivering recommendations on the structure and regulation of the electricity market in line with European standards
• Preparing and implementing actual restructuring and privatization