Economic context

SMEs play an important role in the economies of southern and eastern Europe, contributing more to employment and GDP than the EU average. However, in some countries they face ongoing difficulties in accessing finance. Small businesses in Bulgaria, Croatia, Cyprus and Greece are hit particularly hard by credit constraints.

In terms of business skills and standards, the gap with EU averages is closing but there is still some distance to cover. For instance, although financial literacy (a proxy for investment readiness) in the region is approaching the EU average of 55 per cent of the population, SMEs would also benefit from greater ease of doing business. The results of the EBRD-World Bank BEEPS V suggest that many small firms perceive competition from the informal sector to be a burden, along with corruption.

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Tailoring finance to promote leadership and growth

In 2017, we provided €112 million through partner financial institutions and signed 3 direct financing deals with SME clients, for a combined finance value of €21.5 million to these countries.

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The EBRD provides customised finance directly to fast-growing SMEs. We believe these businesses have great potential to drive employment, innovation and growth. In addition to tailoring this finance to their needs, we help strengthen the firms as they implement the investments, by promoting good corporate governance, financial management and other standards that help these enterprises to stand out.

Improving competitiveness

We are also enabling SMEs to access business advice in Croatia, Cyprus, Romania and Russia. The Bank works together with local consultants and international advisers on projects in strategy, financial management, quality management, international certification and other areas that help small firms improve their performance, become more competitive and grow.

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In 2017, we undertook a total of 179 advisory projects across these four countries, with 45 of the assignments in Russia where we concluded our remaining advisory operations. In these relatively advanced consultancy markets, we work to promote more sophisticated advisory services, for example in energy and resource efficiency, export promotion and financial enhancement, while also training local consultants to build their skills in these fields.

Joint EBRD and EIB programme to provide advisory support to SMEs in Bulgaria, Greece and Romania

In the second half of 2017 we started a joint EBRD and EIB programme to provide advisory support to SMEs in Bulgaria, Greece and Romania under the European Investment Advisory Hub.

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The programme mobilises a combination of advisory services, working with local consultants and international advisers, to help small businesses transform their businesses and grow. During 2017, the EBRD has already implemented 31 projects with local consultants or international advisers in Romania, whilst in Bulgaria and Greece, the EBRD largely focused on mobilising the resources to set up the Programme, with projects in these two countries due to start in 2018.

Promoting women's entrepreneurship in Croatia

In Croatia, our Women in Business programme is helping businesswomen access finance and know-how to expand their enterprises.

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Since launching the programme in 2015 we have provided business advisory support to 69 women-led SMEs in many sectors, giving these enterprises a competitive edge and a chance to thrive. We have also made available €17 million in credit lines to three local partner banks under the programme, alongside providing women entrepreneurs with mentoring, our online diagnostic tool Business Lens, training and networking opportunities. In total, we have reached more than 1,400 women since the programme began.

A partnership for growth: Blue Ribbon in Croatia

Targeting a group of high-growth SMEs, we have launched a pilot of our Blue Ribbon initiative in Croatia.

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This initiative engages SMEs for a five-year partnership, tailoring specific advisory and financing products to help them reach their full growth potential and create a lasting demonstration effect on the ground. In 2017, two high-potential SMEs joined the programme; one of them started an advisory project related to implementation of an internationally recognised quality automotive industry standard.