Enterprise Development Agencies (EDAs) set up in Bosnia-Herzegovina

There are three projects under the responsibility of IFP/SEED in Bosnia and Herzegovina that focus on long-term economic development, particularly the creation of gainful and sustainable employment opportunities for a very large number of unemployed.

The first Italian funded project BIH/97/05M/ITA started in November 1997 in the town of Brcko where an Enterprise Development Agency (EDA) was set-up to promote competitive, growth-oriented small and micro enterprises. This project ended in November 1999.

The UNDP funded project BIH/98/02 started in May 1998 to replicate the EDA Brcko project approach to two other towns, Banja Luka and Bihac where a new EDA was created in each town. The second tripartite review meeting, held in December 1999, found that the project had been successful in fulfilling most of the projects objectives up to that moment. In October 2000 these EDAs had the last financial support from the project budget, since then they've been working a 100% out of their own income. In early 2001, EDA Banja Luka hired two more professionals to manage the existing workload.

The Italian Government funded a third project, BIH/97/07/ITA, with the same approach and the objective to implement 2 new EDAs, one in Mostar and one in Livno. The project started in May 1998 and the first EDA was established in Mostar in October 1998. The second EDA was established one year later in October 1999. While EDA Mostar will have partial financial support until the end of September 2001 and then run out of its own funds, EDA Livno will have financial support until 2002.

One of the aims of these projects is to create financially sustainable delivery mechanisms for Business Development Services for micro and small enterprises (MSEs). The financial sustainability will ensure that MSEs will have a long-term reliable institution that is able to provide assistance with a wide range of services. These services include management training, advisory and counseling services, assistance in the privatization process, improving MSEs access to finance and others.

The financial sustainability of the institution is pursued from the beginning of the project. It is reached by setting up local NGOs that receive financial support at a decreasing rate over 30 month to three years period, in which the EDAs start to generate more and more their own income through charging fees for their services to entrepreneurs or delivering services for development and government agencies.

The five EDAs are beginning to cooperate in an informal network, including another enterprise agency in Tuzla (TALDI). This network eventually will be formalized, improving the effectiveness of each EDA and rationalizing support for the micro- and small enterprise sector in Bosnia-Herzegovina. The ILO is also looking to further financing two new EDAs and strengthen the EDA Network through a new project, that will ensure the national coverage of the EDA network.