sme financing in the eu enlargement countries
TRANSCRIPT
Finance and Advice for Small Businesses
SME Financing in the EU enlargement countries
Charlotte Ruhe, Head, SME Finance and Development, EBRDLaunch of the SME Policy Index for the Western Balkans and Turkey 2016
Paris, April 2016
Finance and Advice for Small Businesses
Setting the scene… SME access to finance
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Western Balkans (unweighted average)Turkey
• Access to Finance 2nd most severely perceived obstacle to business in the WB, 5th most severe obstacle in Turkey
• Banks are very liquid, but in light of high NPL levels (esp. in the WBs), banks are very risk averse
• Lack of creditworthy borrowers• Bank lending remains expensive,
and especially long-term financing is difficult to access
• Non-bank finance virtually non-existent
• Financial inclusion remains a key challenge
BEEPS 2012, perceived business obstacles (0-5)
Finance and Advice for Small Businesses
• Limited awareness of SMEs about the variety of financing opportunities available in addition to standard bank-lending.
• Incomplete legal and regulatory framework that ensures investors’ confidence and reduces legal uncertainties.
• Need for local buy-in and support to market-friendly incentives to increase lending appetite of banks.
• Lack of investment readiness of SMEs, including sound financial management and transparency.
Additional challenges
Finance and Advice for Small Businesses
The EBRD Small Business Initiative
Financing through financial
institutions
Direct financing for small business
Policy dialogueCo-financing with financial
institutionsBusiness advice
• 200+ partner financial institutions
• €1+ billion of finance each year
• Benefitting hundreds of thousands of small businesses
• Providing direct financing for small businesses, coupled with business advice
• Instilling higher standards of corporate governance and financial transparency
• Taking targeted policy actions alongside our investments
• Engaging effectively with policy-makers across our region
• Lessening the risk of financing small businesses
• Helping partner financing institutions to make their money go further
• Providing business advice
• Ranging from strategy to operations, financial reporting, energy efficiency and much more.
Finance and Advice for Small Businesses
Almost 55,000 SMEs reached annually in Turkey and the Western Balkans
SME credit lines channelled through partner financial institutions to provide long-term financing (EUR 1.8 bn in Turkey and EUR 1.1 bn in the Western Balkans)
Facilities and integrated programmes targeted sub-segments in agribusiness, energy efficiency, trade finance and competitiveness (planned)
Dedicated SME instruments for debt, equity and quasi-equity investments
Advice for Small Businesses activities to improve competitiveness in enterprises at pre- and post-investment stage (over 340 SMEs and 4330 SMEs assisted in Turkey and the Western Balkans)
Targeted policy dialogue to strengthen financial sector legislation Close coordination with partner organisations under the multi-donor
Western Balkans Enterprise Development and Innovation Facility, EDIF
EBRD response in facts and figures
Finance and Advice for Small Businesses
• Strong focus of the EBRD on financial inclusion, with a view to decrease regional disparities and increase access to finance for underserved groups such as women entrepreneurs and refugee-impacted communities Dedicated integrated product to close the gender inclusion gap
through the EBRD’s flagship Women in Business Programme EUR 175 mn in credit lines for women-led enterprises in Turkey
and EUR 20 mn in the Western Balkans to date Incentives to partner financial institutions to promote lending
to new segment Business advice for women-led SMEs, training, mentoring and
coaching Technical assistance to partner financial institutions
Strong focus on underserved regions, especially in Turkey, where activities largely focus on the south and east regions
A comprehensive refugee response package for Turkey and surrounding countries currently under preparation
Financial inclusion
Finance and Advice for Small Businesses
Thank you