Eastern Partner Countries: Structural reforms have improved the environment for SMEs

Eastern Partner Countries 2012 – Progress in the implementation of the Small Business Act for Europe benchmarks national SME policies against a set of 92 policy indicators and helps policy makers measure convergence with good practices promoted by the Small Business Act for Europe. As the European Bank for Reconstruction and Development reported, the report was released in Batumi, Georgia, at the SME Panel under the Eastern Partnership Platform 2, organised by the European Commission and hosted by the Ministry of Economy and Sustainable Development of Georgia.

“Access to finance for SMEs remains an important challenge across the region despite improvements before the crisis, said Jeromin Zettelmeyer, Deputy Chief Economist and Director for Research of the EBRD. Bank lending, which is the main source of external funding, has been significantly affected by recent crises, and alternative sources of finance are yet to develop.”

SMEs are an important source of job creation and economic growth in Eastern Partner economies. However, the global crisis has hit SMEs in the region hard – restricting bank lending, eroding consumer demand, foreign direct investment, remittances and international capital. The report underscores the need for a more comprehensive approach towards SME development in the region. In particular, Eastern Partner countries need to:

Set up or further enhance the effectiveness of institutional structures dealing with SME development.

Develop targeted SME policy tools to support access to finance, innovation and export capacity.

Consult more closely with the private sector to ensure that reforms are “reality checked” against market needs.

Support entrepreneurial learning and measures to develop women’s entrepreneurship.

Collect more detailed structural statistics to monitor and evaluate the performance of the SME sector on a regular basis.