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An important drop in an enormous ocean

It was a freezing morning in Prague on that 27 January 1996, when I waited for a phone call from Alexej Fulmek, general manager of the Slovakian daily newspaper SME. The only remaining condition for his company to get a loan from MDLF and purchase its first printing press was to provide us with a guarantee by one of the company’s shareholders.

It was also to be the first loan approved and extended in MDLF’s history.

I had a plane ticket in my pocket in case he said (and our legal counsel confirmed) that the guarantee was in order. If so, I was to leave immediately for the airport to meet him and sign the contract. We were really pressed for time – missing a deadline for payment set by the seller of the printing press would mean that we would lose that machine.

Alexej’s call came just as the taxi was pulling over to pick me up to take me to the airport. He simply said: “We have the guarantee. I hope you don’t miss your plane”.

Two days later, after the first payment was made on that first loan, MDLF was officially a lender to independent media companies in emerging democracies.

And that is what we have now been doing for 10 years.

When, at the end of 2005, we look back at everything we have done over the last decade, we can say that MDLF has extended about US$55 million in different forms of financing and financial assistance to independent media companies in the 20 countries in which we have worked so far.

Out of that amount, about US$47 million has been in the form of loans, lease and equity investments to 76 projects in 17 countries; US$1.5 million has been in support of technology transfer and new technology projects; and some US$6.5 million has gone towards professional development, training and technical assistance.

Contrary to all the predictions made before MDLF was launched, independent media companies proved to be superb borrowers – over that period of 10 years, we have written of as losses only 2.1 percent of money lent to clients. A stunning result which surprised even our own financial department.

The question I am asked most frequently about MDLF is: “How can you possibly achieve such a high repayment rate – what is the secret?” On those occasions when I want to answer this question frankly and reveal our simple secret, I explain why our borrowers would be dream clients for any financial institution: they have a mission in life and are involved in the media business primarily to contribute to improving the part of the world in which they live, not to make a fortune. They have one great asset which they put down to guarantee all repayments: their reputation. This is an asset too valuable to be lost by defaulting on any loan.

As for us at MDLF, we understand that we are only as good, as relevant and as successful as our clients. MDLF itself is only a summary of everything our clients stand for, what they do and who they are. And – to be very honest – we are exceptionally proud of what MDLF is today.

No matter whether these numbers appear big or small, if we put them in the context of independent media companies’ global needs for affordable and “no strings-attached financing”, it looks like a drop in an enormous ocean.

So, our challenge remains. A lot of water has passed under Prague’s Charles bridge over the last 10 years. And looking to the future, we can be sure that a lot more will continue to flow.

Sasa Vucinic, Managing Director, MDLF, May 2005

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