Zara Ivanovi

Zara's inital loan was initially intended to be put to work buying a new sewing machine and making renovations to the back of her shop. The weather warmed up quickly in Sliven this year, and Zara made the decision to use some of the money to buy material to make women's shirts. She had not finished selling her winter inventory, so she hadn't the amount of capital she expected to be able to put into this season's product. She has rigged her sewing machine so it works "well enough for now" (with screwdrivers literally sticking out of it) and her plan is now to buy a new machine once she has moved some of her spring stock. She is selling these shirts in her shop, as well as a small store on the other side of town. Her location is not on a main street with good pedestrian flow, so she ends up selling most of her wares to people who live in the neighborhood and customers of her tailoring business.

She has enough capital to move ahead with minor renovations to the back of her shop to create a proper changing area for customers to try on her goods. That process is an exceptionally slow one, due to not only the general pace of business in Bulgaria, but also the government red tape. She told the following joke:

An American and a Bulgarian enter a contest to see who can build the fastest 100-meter tall building. 9 months go by, and the American says "another week, and I will be putting in the final window." The Bulgarian says"another week, and I will have the final stamp on my building permit to begin."

Seems applicable.

Sign in Zara's window reads: "Women's Shirts, 6 Leva" (~$4)

Bulgaria and Romania are scheduled to enter the European Union on January 1, 2007.  Most people here are fairly uncertain about what this would mean for them; they expect higher inflation, perhaps offset by greater employment opportunities abroad.  Most small business owners, however, fear the EU for what it brings: regulations.   The EU regulates many aspects of business.  These regulations add costs to businesses that, in many cases, are only affordable by larger businesses with the scale to cover them.  In the case of Zara, she fears being shut down because her ceiling is not high enough and she has been told it does not conform to EU regulations.  As rent in a larger area would not be affordable, her near-term hope is in a lack of enforcement of this regulation.   Renovations to her shop are progressing, although slowly.  She now has a working changing area and hopes to continue developing the direct retail aspect of her business.  We’re working with her to find retail shops to which she could distribute her product, effectivly taking advantage of the foot traffic other locations offer. 

Zara has been finding a great deal of success in some of her more recent work focused on making custom made attire. She can typically produce a business suit (men's or women's) for much less than what they sell for in the shops around Sliven. To that end, she has begun working with a nearby fabric store as a key sales channel. When people purchase fabric to make clothing, the owner of the fabric store refers them to Zara to create the clothing. When appropriate and possible, she comes down to the store to meet them, otherwise they walk the few blocks to her shop.

Zara continues to work 6 and sometimes 7 days a week. I cringe when I see her open on a Sunday, but her work ethic is impressive.

Zara has completed her loan this week with a balloon payment of approximately $100. We've helped her to re-schedule her payments several times over the past 6 months to make fiscal room for several of her other personal and professional financial obligations. We've done this because Zara has proven herself to be a responsible borrower and has used her loan proceeds as planned. The long-term results of this loan are tangible: a new sewing machine with higher productivity (and uptime) than the last and a changing room so that the clients for whom she makes custom clothes can try on her creations in privacy. Although the money has be repaid, the benefits last.