Ivano-Frankivsk ... A growth market
by Don Domansky, SBEDIF Project Director

(The 5 year, $5million SBEDIF, Small Business and Economic Development Project for Ivano-Frankivsk, Ukraine is sponsored by the Canadian International Development Agency and is managed by Confederation College of Thunder Bay, Ontario. Its participating partners include the University of Waterloo, University of Saskatchewan, Parkland Community Futures of Grandview Manitoba, the City of Ivano-Frankivsk and the Oblast of Ivano-Frankivsk)

Situated in the heart of historical Western Ukraine, is the most beautiful region of Ukraine with its rolling plains, oak forests, river valleys and snow capped mountains. The abundance of agricultural potential, oil products, and forestry resources gives the region the raw potential for success. Add to this the proximity of 5 Central European countries within 150 kilometers and the stage is set for business opportunity.

Not unlike many parts of Ukraine, Ivano-Frankivsk is suffering from unusually high unemployment, insufficient business start-up capital, over-reliance on Polish imports, and a lack of basic Western business education. On the other hand and typical of Ukrainians in general, there is an endless supply of enthusiasm, high technical skills, and a willingness to learn.

Ivano-Frankivsk is living through the national problems of recession experienced by all of Ukraine. However, unlike many parts of Ukraine, Ivano-Frankivsk was a closed region prior to Independence and lacks the type of Western exposure and experience that has given its close neighbor Lviv a head start in Western business development.

There is no question that the SBEDIF project has advanced to the stage where it is now bursting at the seams. Visitors to the centre at 26 Dnistrovska, Ivano-Frankivsk immediately comment on how busy and crowded the centre is. Initial business development consulting has been provided to 281 clients of which 145 have returned for follow up consulting sessions. Many of these clients are also part of the 348 students participating in Entrepreneurial, English, and Economic officer courses. Fifty-one students have attended our train the trainer sessions including 4 that received training in Canada. There are now 6 Ukrainians on staff doing business consulting, course delivery and Economic development training.

The SBEDIF project completed its official registration as a Branch Office of Confederation College in Ivano-Frankivsk and as a result has an official bank account as well as a corporate seal. A major objective of the project is to help the centre achieve self-sustainability that is financial independence of specific funding. To this end, an agreement for a Joint Venture was signed giving the centre the right to charge fees for services… normally not an option for a technical assistance project.

Another milestone included the signing of an agreement for a loan granting process. The SBEDIF officer and loan committee should be able to forge ahead with the granting of loans to the many applications for loans received to date. A major component of this loan procedure includes participation from the two Ukrainian partners, the City and Oblast of Ivano-Frankivsk, and a mechanism and terms of reference for the loan committee. The loan committee also includes representation from the participating local financial institutions, currently the Pre-Carpathian bank and the local branch of the Ukrainian Credit Union. The legal right for the project to get involved in certain types of loans continues to be a major challenge for the project.

The CIDA sponsored loan fund has grown to $516,000 and the project is using this financing as leverage to attract additional loan funding from other sources. Positive initial response has also been received from within Ukraine for private sector funding to augment the loan fund.

The first two Ivano-Frankivsk loans are exciting success stories. A baker from a small community who borrowed $10,000 U.S. to buy a bread making machine has hired 8 full time employees, is selling 1100 loaves a day, is expanding to a third shift, and is planning to pay off the loan in 6 instead of 18 months. A woodworking entrepreneur who received a loan for a special cutting machine and now has orders from several Central European countries.

The project is very active throughout the Oblast with economic officers and business consultants making regular visits to various communities. Some of the smaller communities are starting to organize their own locally financed business centres and look to us for organizational support and training delivery. The economic program is developing a more extensive needs assessment for business opportunities throughout
the region and this information is being used in the consulting program to advise entrepreneurs of business opportunities. Entrepreneurial instructional videos (in Ukrainian) have been developed and shown on local television and there are plans to do this type of television entrepreneurial training approximately 3 hours per month. Free television time has been granted to SBEDIF as part of our agreements. Ukrainian
companies have approached the centre with offers of funding to pay for in-house business training.

The consultant and translators staff received its initial trade mission training and test with the hosting of a Canadian trade mission (organized by the Confederation College trade mission program) in November.

Seven of the 10 companies on the mission had 18 pre-matched appointments resulting in definite interest in doing business. It is the intention of the business centre to offer trade mission services to any foreign trade mission coming into the region… providing services such as business contacts, business research, translation, facilities, etc.

All six partners in the project have been active in furthering the needs of the project. The City of Ivano-Frankivsk has committed the initial facilities for five years and will satisfy all of our additional space needs within the next two months. The Oblast of Ivano-Frankivsk has formally committed to provide television time and transportation services within the Oblast. Parkland Community Futures of Grandview Manitoba continues to provide valuable human resources to support several programs including loan officer training and the development of a Community Profile in the immediate future. The University of Waterloo is continuing with the development of strategic planning policies and procedures in several of the rayons, the training of economic officers throughout the region, and the cooperative development of an economic data base to serve local and trade interest needs. The University of Saskatchewan is not only forging ahead with four levels of English for the business community and the training of English teachers, but is nearing completion of a revised glossary of Ukrainian/English business terms.

Confederation College of Thunder Bay, Ontario manages the coordination of all programs and for the provision of:

• sixteen entrepreneurial training modules in the Ukrainian language
• extensive training of Ukrainian entrepreneurs training of Ukrainian trainers trade mission facilitation training
• development of a consulting program,
• recruitment of Canadian volunteer consultants
• development of a loan granting mechanism
• development of a business incubator
• development of a local Board of Trade and the promotion of trade opportunities through business networks and international marketing.

The SBEDIF Internet home page will soon be transferred from North America (alpha.confederationc.on.ca/nec/Ukraine) to Ukraine (www.sbedif.if.ua). Through it we have started to promote trade opportunities within Ivano-Frankivsk with plans to eventually sell marketing space to Ukrainian companies on this page while promoting it among investment circles around the world.

The office in Ivano-Frankivsk:

is prepared to help foreign businessmen make contacts, set up appointments and do basic research for potential joint ventures or business trade. Having a Canadian run office doing some level of risk management is a key for us in attracting potential investors to Ivano-Frankivsk. The office is also equipment with the latest computer, network, presentation, Internet, E-mail, office software and hardware available for local and Canadian businessmen.

The SBEDIF project is an economic catalyst for a variety of innovative initiatives. It brings together the best of Canadian expertise in economic development, micro-enterprise development, trade facilitation and English language training. It injects a constant spirit of optimism into Ukrainian entrepreneurs with a belief not only in the exciting potential of the country, but more specifically with the spirit of the Ivano-Frankivsk people from the farmers in the north to the Hutsul mountain people of the south.

(If you are interested obtaining more information on the project or information on business opportunities in the Ivano-Frankivsk region please contact our Internet address www.confederationc.on.ca/nec/ukraine or the project director at Domansky@Confederationc.on.ca or Domansky@sbedif.if.ua.)

Last updates were made 19-08-99

Copyright
© SBEDIF Business Centre, 1997