NESsT Makes First Social Enterprise Loan to Expand Hungarian Restaurant

span#casematerialtextfullview { color: #703D00; } span#casematerialtextfullview * { color: #703D00; } span#casematerialtextfullview a { color: #7A7700; } span#casematerialtextfullview p { margin: 0; padding: 0; On May 6, 2010 NESsT officially launched the Social Enterprise Loan Fund with a US$ 55,000 loan to Hungarian Kék Madár Foundation for expansion of its Ízlelő Restaurant, a successful social enterprise that has had strong impact and shown high potential for further success The Social Enterprise Loan Fund (SELF) was developed by NESsT to fill the lack of debt financing for social enterprises in Central and Eastern Europe. In the case of Kék Madár, a NESsT Venture Fund portfolio organization, SELF will offer a long term loan with very favorable conditions, tailored to the needs and repayment capacity of Kék Madár. With the new fund NESsT aims to provide a new flexible financing instrument to its portfolio and help Kék Madár learn how to use credit for growing its business. This initial SELF is possible thanks to the generous support of The Ausherman Foundation (US$ 25,000) and private supporters: GreenPartners (US$ 10,000), Private Equity Shares Campaign (US$ 20,000). Kék Madár - a foundation dedicated to creating economic and skill-building opportunities for people with physical and intellectual disabilities - launched its social enterprise, the Izlelő ("Tidbit") Family-friendly Restaurant in 2007 for two main reasons: 1) to provide job training and employment opportunities to its beneficiaries, thereby enhancing their integration into society; and 2) to improve the organization's financial sustainability by generating revenues. With support from NESsT, Ízlelő has been outstandingly successful. It has shown impressive results exceeding both financial and mission impact goals: revenues have increased sevenfold since the opening; Izlelő now accounts for 12 percent of Kék Madár's annual revenues; sales increased from 40 to 104 portions per day and the restaurant has placed seven beneficiaries on the open job market while still employing eight. Undoubtedly, Kék Madár's social enterprise has become a replicable model for transitional and permanent employment for disadvantaged people. Upon seeing the satisfaction of the restaurant's clientele, Kék Madár identified additional market demand and decided to expand by offering catering services for onsite and external events and healthy take-away lunches for school children. By 2009, Izlelő's services became so popular in the region that crowds lined up in front of the restaurant waiting for tables and some catering orders had to be turned down due to capacity constraints. To meet this increased demand, Kék Madár undertook an extensive business analysis for the expansion of its social enterprise and set about raising funds to expand the restaurant by purchasing and refurbishing a neighboring building. "There are quite a lot of opportunities to receive financial support for renovation or expansion from government or European Union funds, but these donors specifically prohibit funding the purchase of real estate. Our situation seemed quite hopeless until we were offered a solution by the NESsT Social Enterprise Loan Fund. NESsT's generous support secures the first step in our development plan," says Andrea Mészáros, Director of Kék Madár Foundation. Based on its exceptional performance and its convincing business plan, NESsT chose Kék Madár as the first borrower in its Social Enteprise Loan Fund. NESsT has provided a loan in the amount of US$ 55,000 to be repaid in six years, in conjunction with a US$ 30,000 grant from UK supporters. "Kék Madár has the kind of model that NESsT would like to support. The expansion builds on strong market demand and past performance and projects increased social impact by training and employing 17 additional beneficiaries and training all of its staff in advanced restaurant and catering skills," shares Eva Varga, enterprise development director of NESsT Europe. "We expect to use learnings from this lending pilot for the benefit of our portfolio. We aim to provide more loans to others who have expressed interest in such financing options for working capital or expansion projects." NESsT is actively raising more capital for SELF and will also use the repayment of debt financing such as the one provided to Kék Madár to provide future loans to other organizations in its portfolio. Download the Kék Madár Investment Brief here. To read about other members of our portfolio click here.   Eva Varga (right) from NESsT and Andrea Meszáros (left) from Kék Mádar celebrate the loan agreement for Kék Mádars's restaurant, "Ízlelő". https://secure.my-websites.org/supporter/casematerial.do?n=gYFg&cmdbid=11...

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