Strengthening the competitiveness of small and medium-sized enterprises (SMEs) is among the key priorities of the EBRD’s Small Business Initiative (SBI). This work has many dimensions, from encouraging innovation to forging international trade links. It also requires an increased sensitivity to the challenges and opportunities that globalisation presents in the SME sector.

Under the SBI we have developed a variety of integrated, comprehensive programmes that address these issues, enhancing the scope of activities to boost SME competitiveness. These activities are all linked to the specific needs and developmental stages of each SME.

Access to finance

In order to grow and become more competitive, SMEs need finance tailored to their needs. We provided over €992 million of finance for SMEs through financial intermediaries in 2016, benefiting tens of thousands of businesses. For our direct lending and co-financing of SMEs, we identify local and regional market leaders with potential for dynamic growth and provide financing adapted to their individual growth needs. We also help them prepare to make the most of the investment and implement the corporate governance and financial management standards that can take their businesses to the next level.

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In 2016, we supported 56 enterprises through direct finance, for a total volume of €232.6 million. We leveraged this finance with business advice to help these clients improve performance, innovate and build value, including through the introduction of the latest best practice to help them succeed.

Access to know-how

We also provide access to advisory services and know-how to help small businesses to improve performance, become more competitive and grow.

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The EBRD enables SMEs to work with local consultants and international advisers on projects in areas such as strategy, financial management, marketing and quality management. In 2016, we undertook more than 2,200 advisory projects with enterprises across 26 countries.

SME Local Currency Programme

Financing in local currency can be crucial in determining the competitiveness of local enterprises. It facilitates longer-term, more affordable credit for SMEs while helping to protect them from foreign exchange fluctuations that could otherwise cripple a small business.

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In January 2016, we launched the new SME Local Currency Programme to help provide the local currency financing that SMEs need. The programme also helps banks manage their portfolio risks for improved financial stability.

With the potential to operate in 21 countries, the programme builds a portfolio of local currency loans to partner financial institutions for on-lending to SMEs and also lends directly to local firms, helping to develop local capital markets. The SME Local Currency Programme is unique in incorporating policy dialogue. In order to qualify their countries for participation in the programme, governments must enter into arrangements with the EBRD that confirm support for reform of their capital markets. These commitments can improve conditions for local currency lending. To date, eight countries have signed such agreements and another two are expected to join the programme during 2017, in the southern and eastern Mediterranean (SEMED) region.

Western Balkans SME Competitiveness Programme

Small and medium-sized enterprises form the backbone of economies in the Western Balkans. With the prospect of EU accession and pressures on growth – including competition from emerging markets – the competitiveness of local SMEs will hinge on enhancing the quality of output through innovation and expansion to export markets.

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Through its unique design, our SME Competitiveness Programme assists firms in doing just that. Participating SMEs improve their production capacity, processes and product quality using a blend of instruments, including credit lines for investment, plus incentives for SMEs, know-how and advice.

With the support of the EU, we launched the first SME Competitiveness Programme in Bosnia and Herzegovina in 2015. The programme is due to be expanded and extended through all six countries of the Western Balkans in the next few years under the regional umbrella of the Western Balkans Enterprise Development and Innovation Facility (WB EDIF), optimising impact through scale, regional coordination and cross-country synergy. It will be the first initiative under the WB EDIF’s newly created lending pillar, enriching the platform’s financing offer to SMEs in the region.