Key challenges

SMEs play an important role in the economies of EU countries where Advice for Small Businesses is active, contributing more to employment and GDP than the EU average. However, in some countries they continue to face difficulties accessing finance. According to the EU’s Small business Act for Europe (SBA) fact sheets, Bulgaria and Croatia perform in line with the EU average in terms of access to finance, while the other countries perform below this. In Cyprus, Greece and Romania the share of rejected loan applications or unacceptable terms offered to SMEs ranged between 18 per cent in Romania and 33 per cent in Cyprus, significantly above the EU average of just under 10 per cent. Beyond financing, improvements in the general business environment would also be key to helping support small business development. According to the BEEPS V survey, many small firms perceive competition from the informal sector and corruption as burdens.

Access to finance for SMEs in Russia is a major issue, with a declining trend in terms of SME loans in recent years. According to the Organisation for Economic Co-operation and Development (OECD), new business lending to SMEs has declined from a peak of around 8 billion roubles in 2013, with the biggest drop of 28 per cent occurring in 2015. In the BEEPS V survey, small firms cited access to finance as being the top obstacle they face to doing business, and many suffer from credit constraints. At the same time, the ability to extend their market reach is likely limited by these SMEs’ lack of international certification, which at around 10 per cent is one of the lowest levels reported across the EBRD regions.

Tailoring finance to promote leadership and growth

In 2018, we provided €69.1 million through partner financial institutions and signed two direct financing deals with SME clients, for a combined finance value of €6.5 million to these economies.

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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 allow these enterprises to stand out.

 

Improving competitiveness

We are also enabling SMEs to access business advice in Croatia, Bulgaria, Romania and Greece. The EBRD 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 2018, we undertook a total of 118 advisory projects across these four countries. 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 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. In 2018, it was extended to include Croatia.

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The programme mobilises a combination of advisory services, working with local consultants and international advisers, to help small enterprises transform their business and grow. During 2018, the EBRD implemented over 100 projects with local consultants or international advisers.

 

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 this programme (which blends finance and advisory) in 2015 – we have provided business advisory support to 85 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 training, mentoring, access to our online diagnostic tool Business Lens and numerous networking opportunities during seminars and high-level conferences across the country. We also implemented a Business Matching Trip to Taipei China for 19 female participants. In total, we have reached more than 2,500women 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.