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Microcredit - a step to booming business
Published on:Wednesday, February 10, 2010 - 10:00
Artichoke, aniseed, blackberry, strawberry, camomile. Romanian herbal tea company Larix produces about 50 different infusions. A microcredit loan a decade ago allowed the firm to modernise. Since then, it has blossomed into a major company exporting teas to other European Union countries.
Ioan Fazakas and Andrei Munteanu set up Larix in 1995. The company got a credit injection of 30,000 US dollars in 1998 from the Romanian-Swiss microcredit organisation, FAER. An ordinary loan was out of the question in those days, as Romanian banks were charging a whopping 60 percent interest.
In 1989, the Romanian revolution saw dicatator Nicolae Ceausescu and his wife Elena shot dead. The free market replaced the Communist regime's rigidly-controlled economy. Romanian entrepreneurs grasped their chance and many achieved success.
"The debt was paid off a long time ago," says Mr Munteanu, looking at the brand new grinding machine Larix has just acquired. About 70 people are employed in the company's sorting department. It couldn't be more different from when the firm began with just five staff.
Microcredit is a thing of the past for Larix. In the early days, the two men made little profit from the company. Nowadays, they are trading partners with leading European companies such as Biohorma and Weleda.
Would Larix have grown so big without microcredit? "It's difficult to say," muses Mr Munteanu, "but it was without a doubt a valued help at the start."
Click here for an account of how the video came about.
Radio Netherlands Worldwide is focusing on the theme of microfinance in 2010 asking the question Who Profits? We will be examining the issue via portraits of those receiving microfinance, talking to experts and asking tough questions. More stories in our dossier
This video portrait is part of a series about small businesses that have received microcredit. The eight reports have been produced for Radio Netherlands Worldwide’s series “Microfinance – who profits?” that was launched on 25 January 2010 at a conference at the Peace Palace in The Hague.