In today’s challenging economic environment, promoting new technologies, boosting modern production and trade, improving the business climate and attracting more investment in highly value-added production sectors are the best ways to bolster economic growth and create quality jobs. This is why EU financial cooperation with the Eastern partner countries focuses on supporting SME and private sector development.
Small and medium-sized enterprises (SMEs) in the EaP region have the potential to make a significant contribution to job creation – and to drive economic growth and development.
However, SMEs face many challenges which prevent them from maximising their full potential, such as: limited access to finance; constraints in accessing new markets; constant adjustments to new, inconsistent and burdensome legislation; a lack of relevant skills to grow their businesses; and a difficult operational environment encompassing high tax rates, corruption and political instability.
EU4Business has been set-up to address these challenges.
There are four areas where the EU4Business initiative will help:
- Business environment
- Knowledge and skills
- Access to finance
- Access to markets
Improving the business environment
EU4Business works with the Organisation for Economic Co-operation and Development (OECD), the European Bank for Reconstruction and Development (EBRD) and the European Training Foundation (ETF) to help EaP countries develop effective policies for SMEs.
Improving knowledge and skills
SMEs must have the right knowledge and skills if they want to grow their business or find new export markets. EU4Business has put in place a large number of actions which can help SMEs to get the advice and training they need to achieve these goals.
The Small Business Support (SBS) programme
The EBRD’s SBS programme provides tailor-made services to individual companies. For instance, it helps companies meet the required technical standards and provides advice on how to run a business in an efficient way, apply best practices, and prepare good business plans. SBS can also provide advice on how to grow a successful small business to achieve higher turn-over and generate increased employment.
Business Support Organisations
EU4Business’ East Invest programme helps companies and business support associations (BSOs) across the Eastern partner region to acquire the skills and adopt practices they need to improve their competitiveness in the EU market and beyond.
Increasing access to finance
EU4Business helps companies access finance through the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the German Development Bank (KfW). These institutions provide loans to SMEs generally via local banks using a large range of instruments to improve the financial condition of companies. EU support is, for example, used for guarantee and risk sharing schemes, local currency solutions and incentive schemes. Furthermore it is used to provide technical assistance to improve the way the banking sector functions, but also advice to local banks in EaP countries to better address SME clients. In addition, special facilities have been set up to encourage women entrepreneurs, as well as SME investments in renewable energy, energy efficiency and the agriculture sector.
DCFTA Facility for SMEs
In addition to the various facilities available for all six countries, a special DCFTA Facility for SMEs has been set up for Georgia, the Republic of Moldova and Ukraine, which signed an Agreement on a Deep and Comprehensive Free Trade Area with the EU (as part of a wider Association Agreement).