Strengthening the business environment
We understand that SMEs face complex challenges. For this reason, in addition to direct assistance for small businesses, we cooperate with policy-makers, local stakeholders, international financial institutions and the wider donor community as we work together to improve the business environment for SMEs. These activities are tailored to the needs of each country and seek to bring international best practice to our region.
Enhancing access to finance: factoring, leasing and listing
Improving access to finance for SMEs goes hand-in-hand with clear, targeted policy interventions. The EBRD helps create an investor-friendly, transparent and predictable legal environment in transition countries. Programme activities may include policy dialogue, legal assessment, and technical cooperation with the country’s authorities.Expand to read more
With significant expertise in financial-sector law reform, we provide expert legal advice to regulators. We help them develop well-defined regulatory frameworks for non-bank financing instruments, such as leasing and factoring, that complement traditional financial instruments, and are often better suited to the financing needs of SMEs. Last year, we completed the reform of leasing and factoring legal frameworks in Montenegro. The Parliament of Montenegro adopted the new Factoring and Leasing Laws on the 25th of October 2017, which will create the environment for the development of factoring and leasing activities, and should ultimately facilitate and improve SMEs’ access to finance. We are currently working with the governments of FYR Macedonia, Kosovo, Georgia, Mongolia and Tunisia to further improve legislation in this area.
And, for those businesses that are ready to take the next step, we are also supporting the creation of specialised platforms for public listing of SMEs and the conversion of exchanges into company financing hubs. In 2017, a feasibility study for the creation of a regional SME Growth Market at the Zagreb Stock Exchange was finalised and implementation started. The new SME Growth Market called Progress will be fully operative in 2018 covering Croatia and Slovenia. We will be supporting this initiative further by providing tailored pre-listing advisory support to eligible enterprises.
Improving access to public procurement opportunities
We also support governments in their efforts to encourage SMEs to participate in electronic public tenders.Expand to read more
Since February 2015 we have supported electronic bidding for low-value contracts on Prozorro in Ukraine, prozorro.gov.ua, and we are currently piloting new innovative and business-friendly electronic bidding solutions in Moldova via mtender.gov.md and in Tunisia via www.tuneps.tn. In Moldova, since November 2016, the pilot of electronic bidding on MTender has attracted 110 contracting entities and more than 450 local businesses. In Tunisia, the TUNEPS system started operation on 1 March 2017 and by the end of the year almost 1,000 local SMEs all over Tunisia were registered and trained to participate in online bidding.
Foreign currency risk mitigation to strengthen financial intermediation
The SME Local Currency Programme also has a strong policy component. It works to address the over-reliance on foreign exchange finance that affects many of our countries of operations.Expand to read more
In 2017, Azerbaijan, Belarus, Morocco and Serbia signed Memorandums of Understanding (MOUs) with the EBRD, enabling them to benefit from the programme in future. These MOUs include detailed plans for capital market reforms and specify the actions required of stakeholders. In total, 12 countries have now signed such MOUs with the Bank.
We also support business organisations, improving their capacity to assist their SME members and strengthen the wider infrastructure for SME support in the countries where we work.Expand to read more
In 2017, we have scaled up our activities in this area and have launched capacity building initiatives to strengthen institutional capacity of business membership organisations in Mongolia, Tunisia, Turkey and Ukraine.
Developing local consultancy markets
By promoting the development local consultancy markets, we are helping to ensure long-term, sustainable access to high-quality business advice for SMEs.Expand to read more
We have a suite of bespoke training courses for local consultants, including our training series, “Grow Your Consulting Business”, and specialised training on topics such as energy efficiency and export promotion. From 2013-2017 over 2,600 local consultants have been trained.
And the results speak for themselves: 93% of the participants have used tools, techniques and skills from the course, with the majority of respondents (55%) introducing significant changes to their company as a result. 88% of the course participants have seen noticeable positive changes in their company (e.g. 42% have introduced new services, 34% increased number of new clients, 17% increased annual turnover).
As a major investor in our countries of operations, the EBRD plays an important advocacy role in promoting SME development and articulating the needs of small business.Expand to read more
We also take the lead in some of the major platforms coordinating donor activity in SME development across our region, such as the Western Balkans Enterprise Development and Innovation Facility (WB EDIF) and the EU4Businesses Initiative in the Eastern Partnership countries, and have been a key contributor to the G20 countries’ B20 taskforce on SME growth.
Diversifying SME access to finance in Montenegro
Montenegro has taken an important step in the reform of its legislative framework with the adoption of a new law on financial leasing, factoring, purchase of claims, and micro-credit and credit-guarantee issued by the state parliament on the 25th of October 2017, which entered into force on 11 November 2017.
With the entry into force of the law, the legal and regulatory framework for these activities will be significantly improved and aligned with international best practices.
The adoption follows support by the EBRDs Legal Transition Team in drafting the sections on factoring and leasing of the law. Both are attractive financial instruments which to date have not been sufficiently used by Montenegrin businesses.
The new laws create the environment for the development of factoring and leasing activities, which would encourage the development of those services by guaranteeing stability and legitimacy of the industry, ensuring that market players are well-established, as well as raising legal certainty of transactions. This in turn facilitates and improves small and medium-sized enterprises’ access to finance, as both factoring and leasing allow relatively quick and easy access to working capital by SMEs.
with international best practices
to finance for SMEs
Building capacity in business membership organisations
We know the catalytic role that business membership organisations can play by giving a voice to smaller enterprises in the private sector and helping them connect with the tools available to assist them. We work with these organisations in a number of countries, from Mongolia and Tunisia to Ukraine and Turkey, strengthening their capacities to deliver meaningful services to and for small enterprises.
With support from the EBRD’s Shareholder Special Fund under the umbrella of the EBRD’s Refugee Response Programme, for instance, we are assisting the Chamber of Commerce in Gaziantep. As an economic hub in Turkey’s South East, the area has been heavily affected by the influx of Syrian refugees in recent years, many of which have started their own businesses. We are helping the Chamber to better tailor their member services to refugee-driven enterprises through a dedicated Syria Desk, improve outreach to and communication with their members and improve management efficiency, thereby supporting local and refugee-led small businesses alike.
the SME voice
capacity to assist SME members
efficiency and effectiveness
Building energy efficiency knowledge in consultancy markets
SMEs in our countries of operations show low energy performance as compared to international averages. This is often due to obsolete technologies and lack of awareness of more modern, cleaner solutions. Despite these needs, local consultancy markets are not equipped to deliver energy efficiency (EE) and environmental management advisory as a line of business.
We are training local consultants and engineers on energy and water efficiency, renewable energy technologies, and environmental management, to help them get the skills they need to perform energy audits and support implementation of the EE projects in the SME sector. The trainings look at data collection, identifying inefficient energy consumption, developing energy saving measures, estimating investment costs and preparing technical financial analysis.
Di and Trade Energy, an EE and engineering consultant in Moldova participated in two EE trainings. The consultant delivered nine EE projects with our clients after the trainings. One of the projects was to help a dairy producer “Fabrica de Unt din Floresti” to conduct an energy audit to identify the company possibilities to cut the energy consumption, as well as design modern EE infrastructure solutions and introduce advanced technologies on energy consumption control. As a result, the company reduced its energy costs by 25%, increased production and turnover by 23% and 46% one year after the project’s completion. With the tailored advice on EE improvements, the company received an investment of €220,000 financed under the EBRD MoSEFF facility and supported by an EU-funded grant which was used to implement the consultant’s recommendations and reduce the energy consumption and cost.
From 2013 to 2017 we delivered 17 trainings in 10 countries with funding from Strategic Climate Change Fund, Global Environment Facility II, EU, EBRD Shareholder Special Fund (ESSF), Kazakhstan Government, Small Business Impact Fund, Global Environmental Fund (GEF), Sweden, and Austria.
energy efficiency and engineering consultants trained
of the trained consultants improved their investment projects assessment and energy efficiency measures techniques
of the participants conducted energy audits following the course
Strengthening SME participation in public procurement
Participation rates in public procurement opportunities across the EBRD’s countries of operations are low, as rules and procedures are often complex and the resources needed to prepare a tender are considerable – with great uncertainty as to the outcome of the bidding process.
However, encouraging more SMEs to participate in public tenders increases competition and could offer more competitive prices. The EBRD works with governments across our countries to facilitate local SME participation in electronic tenders for small value public contracts, below €120,000.
We promote legal reforms to simplify small-value public procurement procedures to make these tenders approachable for local SMEs, through mechanisms such as reducing the bureaucratic burden for small businesses to submit a tender, enabling free of charge access to procurement opportunities through online publication of notifications and tender documents, and a free of charge online submission mechanism.
To sustain the impact, we also support the development of eProcurement tools, awareness raising and training for public sector purchasing entities and SMEs on these technologies.
Currently, we are assisting the Governments of Moldova, Mongolia and Tunisia in reforming their electronic procurement procedures with the support of Korea and the EBRD Shareholder Special Fund.
Building energy efficiency knowledge in consultancy markets in Romania and Moldova
SMEs in our countries of operations show very low energy efficiency performance as compared to international averages. This is often due to obsolete technologies and lack of awareness of more modern, cleaner solutions. Despite these needs, local consultancy markets are not equipped to deliver energy efficiency and environmental management advisory as a line of business.
We are training local consultants on energy and water efficiency, renewable energy technologies, and environmental management, helping local consultants and engineers to get the skills they need to perform energy audits and support the implementation of energy efficiency projects in the SME sector. The trainings are tailored to different experience levels, offering basic, intermediate and advanced levels. The courses look at data collection, identifying inefficient energy consumption, developing energy saving measures, estimating investment costs and preparing technical financial analysis.
From 2013-16, we delivered six of these courses in Romania and Moldova. In Romania, with funding from Austria, we have trained 57 consultants to date. In Moldova, engaging funding from Sweden and the Global Environmental Fund (GEF), we have reached 78 consultants in total – helping to put green consulting on the map.