EBRD Small Business. Natalia Meylunas SBS Head of Regional Programme, Western Balkans

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1 EBRD Small Business Support (SBS) Natalia Meylunas SBS Head of Regional Programme, Western Balkans

2 Small Business Support (SBS) overview EBRD fosters entrepreneurship not only through capital funding but also by providing business expertise Small Business Support (SBS) has been helping MSMEs to adapt to the demands of a market economy since instruments of the SBS, the Enterprise Growth Programme (EGP) and Business Advisory Services (BAS) are essential components of the EBRD transition toolkit Run on a not-for-profit basis in over 20 EBRD countries of operations Over 200m in funding utilised to date from bilateral and multilateral donors At a glance Number of projects to date (EGP and BAS combined): 12,000+ EGP projects: 1,870 BAS projects: 10,200 Market development activities: 595 Total investments secured by client companies: 1.45 billion 2

3 EGP and BAS Complementary technical assistance programmes, Donor funded, Not-forprofit Combine direct assistance at the enterprise level with systemic market development interventions Business Advisory Services (BAS): o o Use of local consultants by giving grants to MSMEs to obtain a diverse array of consulting services Systemic Market Development Activities to develop a sustainable infrastructure of advisory services and SME support Enterprise Growth Programme (EGP): o o Substantial managerial and structural improvements in SMEs by engaging experienced senior executives and industry experts as advisors Sector Development Activities to disseminate best practices and lessons learnt

4 Enterprise Growth Programme(EGP) Transition from Entrepreneurial to a Professional Company Entrepreneurial Involved in everything Taking all decisions (no delegation, no records) Informal Spontaneous *Limit on growth potential* Professional More structured Board governance with records of decisions Delegated authority to specialists (e.g. CFO) Systems + culture *Equipped for growth* Challenge is to maintain entrepreneurial culture in a more structured environment 4

5 EGP Methodology Project lasts months, visits every 6-8 weeks Experienced senior executives work with CEOs and management teams Project team consists of Senior Industrial Advisor (SIA), Specialist(s) and Team Coordinator / Local Manager Scope tailored to the needs of the individual enterprise Typical areas: General management, Sales and marketing, Financial and strategic planning, Attract finance, Organisational restructuring, Production and design, Export opportunities, International standards

6 EGP Project Cycle Identification and screening of candidate enterprises (referrals from EBRD teams, local institutions, chambers etc) Selection and approval by EGP management team (HQ) Senior Advisor selected and appointed to the project First visit, Project work plan & Objectives agreed Team visits, actions followed on Mid term review, Final project review Evaluation

7 EGP Enterprise criteria Medium size enterprises, normally >100 employed, > 1 million t/o All sectors, except banking and financial services, military products/services, gambling, tobacco and hard liquors Private, majority locally owned businesses with significant importance for the local economy Acceptable debt structure, potential to be commercially viable in the longer term Strong commitment to undergo restructuring / development programme agreed Willing to co-share minimum 10% of total project cost (~ 5,000)

8 EGP in the Western Balkans Until present, EGP has implemented around 500 projects, of which 38 were in Bosnia and Herzegovina, 35 in Croatia and 184 in Serbia Project Impact: Bosnia and Herzegovina (since 1997) Croatia (since 1999) Serbia (since 2001) No. of assisted 71% 47% 67% enterprises to report an increase in turnover No. of assisted enterprises to report an increase in pre-tax profit No. of assisted enterprises to report an increase in employment 75% 29% 48% 38% 20% 29% 25.7 million of donor funding from the European Union, Austria, Canada, Denmark, Finland, Greece, Ireland, Italy, Japan, Korea, Luxembourg, Netherlands, Portugal, Sweden, Switzerland, Taipei China and the UK.

9 Business Advisory Services (BAS) Objectives: Achieve enterprise change in potentially viable MSMEs Develop sustainable infrastructures of local business advisory services BAS operates on both the demand and supply side: Stimulates demand by raising the understanding of MSMEs of the potential benefits of using external consultants Increases supply and quality of local advisory services BAS projects: MSMEs provided with a grant to cover 25-75% of consultants costs or max. 10,000 (Grant only paid on successful completion of project) Market development activities including MSME and consultancy training; support to relevant institutions; visibility and dissemination activities

10 BAS Project types Market performance: Market analysis Business planning Feasibility studies Management effectiveness: Financial management / MIS Reorganisation / restructuring Cost reduction: Computerised manufacturing systems Engineering studies Product management Quality management: ISO certification Product management Environmental management: Energy efficiency Environmental impact assessments

11 BAS Project cycle 1. Project screening and selection 2. Consultant selection (Enterprise) 3. Project TOR development, grant agreement with enterprise 4. Project implementation, monitored by BAS team 5. Project completion and grant disbursement upon successful project completion 6. Project Evaluation 12 months after disbursement

12 BAS in Serbia Achievements Inception 2006 Number of projects 290, of which 36 On-going, 66 Completed and 188 Evaluated Over 150 Consultants engaged Number of Market Development Activities (MDA) 11 35% of enterprises secured an external investment Environment 5% To Introduce Quality Management & Certification 40% Energy efficiency 1% Feasibility Studies 4% Development Planning 6% Reorganisation/Restructu ring 15% Computerised Financial/Management Information System 20% Market Analysis & Planning 9% 12

13 BAS Serbia funding 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 EBRD Shareholder Special Fund (ESSF) EBSF F EU Private Sector Support Facility for the Western Balkans ECWB F Netherlands NEBS F Taipei China TWTC F 1 13

14 BAS Project case study SCS Plus Knjazevac Implementation of Computerised Management and Financial System Established in 2002, Knjazevac Activity:Wood industry - Pressed plywood chair seats production Challenges: Difficulties in monitoring the production easily, accepting the orders, follow the stocks, plan the future production, submit the salaries and work orders Difficulties in financial and operational management of all business activities BAS Support BAS support in the project was crucial in providing financial support and facilitating the consultancy project for the implementation of a Computerised Management and Financial System 14

15 BAS Project case study SCS Plus Implementation of Computerised Management and Financial System Project outcome Improved management procedures and decision making process Generation in real time of company financial reports such as on orders, sales, production flow etc for each of the business activities Information on costs and profitability for each of products Increased staff efficiency and performance quality Significant decrease of costs

16 BAS - DEVELOPING CAPACITY OF UPKS (ASSOCIATON OF MANAGEMENT CONSULTANTS OF SERBIA) FOR CMC PROGRAMME DELIVERY Serbian Association of Management Consultants (UPKS) have initiated introduction of CMC (Certified Management Consultant) programme in Serbia in 2010 and Croatian Association of Management Consultants HUPS was chosen as a partner in this process. BAS supported second part of this project - building of internal capacities of UPKS that will enable UPKS to maintain CMC programme in the future and consequently lead to UPKS sustainability. Participants: 14 CMC certified consultants Project included: 1. Establishing UPKS procedures for CMC certification procedure according to the ICMCI Competence Framework and Body of Knowledge 2. Preparation and delivery of training of trainers, mentors and assessors for 14 local consultants 3. Certification process for additional eight trained consultants that resulted with two more local consultants being certified for CMC standard. Outputs: -UPKS procedures according to the ICMCI defined, -UPKS received confirmation from ICMC that it is accepted and Serbian Association is now member of this reputable international organisation.

17 BAS in Croatia Since 2001 Funded by European Union, Luxembourg, UK, Austria, Central European Initiative, ESSF 471 BAS projects, 259 consultants engaged 14 Market Development Activities Highlights: A training on IPPC standards for companies and consultants, in cooperation with the Ministry for Environment Series of trainings for Croatian winemakers on technology and organic winemaking Study tour to Poland for Croatian consultants

18 BAS in Bosnia and Herzegovina Since 2001 Funded by the European Union, the Netherlands, Luxembourg, United Kingdom, Portugal, Central European Initiative, EBRD 530 BAS projects, 258 consultants engaged 20 Market Development Activities Highlights: Development of a Voucher Scheme for the Republika Srpska SME Development Agency to strengthen the infrastructure of MSME support Trainings on waste management, environment management standards for consultants and SMEs

19 Women in Business in Western Balkans The programme aims to support at least 90 projects in 3 countries with BAS grants Train the Trainers scheme will prepare at least 18 experts who will then deliver practical, custom-designed trainings for start-up entrepreneurs A minimum of 150 women entrepreneurs (or willing to start their own business) will be trained through 9 workshops (3 per country) 15 women per country will participate in mentoring programmes In 2013 BAS will deliver up to 12 specialized trainings for womenowned businesses on topics identified by the owners as priorities Facilitating access to finance is achieved through partnership with financial institutions Opportunity Banka in Serbia, PBZ and HBOR in Croatia, MI BOSPO in Bosnia and Herzegovina

20 Support to Women in Business in Western Balkans a new programme Financed by Luxembourg, Taipei China and EBRD Shareholders Special Fund 1.Projects with start-ups and existing women owned and managed businesses featuring higher grant percentages for start ups and MSMEs in rural areas 2. Workshops, courses, business training for female entrepreneurs - start-ups and existing businesses in areas such as business planning, quality management and certification, sales and marketing, financial management 3. Access to finance by establishing linkages with EBRD partner and other local relevant financial intermediaries 4. Visibility and dissemination activities of best practices and success stories of women in business 5. Mentoring by matching women entrepreneurs with successful women in business leaders 6. Business matching trips to set up women entrepreneurs with potential business partners, introducing new technologies and knowledge transfer 7. Networking by establishing partnerships with local stakeholders, and organizing events and networking opportunities for women entrepreneurs

21 ICT- A business matching trip to Taipei China (June 2012) Participants: Active senior-level executives from a leading ICT sector (5 ICT leaders per country) The objective: Explore business matching opportunities, create linkages with other companies in the same industry, exchange knowledge and foster potential import and export links and franchising opportunities. The trip consists of: - Visit to COMPUTEX, one of the biggest ICT exhibition in the world - Accessing new products and latest development of ICT technology - Exploiting the business opportunities for cooperation and forming partnerships with leading Taipei China ICT companies - Visit leading Taipei China ICT companies - Emulating the Taipei China public-private partnership in ICT - Transferring knowledge of Taipei China s innovation and ICT strategies to participants to encourage information sharing to the delegate s country authorities. - Professional lecture/workshop on business practice for managing relations with major international vendors, and government role in supporting ICT development

22 SBS Impact 18 years in operation, continually expanding since 1993 Covering 31 countries historically; currently operating in over 20 countries across the EBRD region 1,870 EGP and 10,200 BAS projects with individual enterprise to date Utilizing over 1,500 advisors from 60 different nationalities Over 1,600 active local consultants ready to be engaged in projects > 60% of enterprises are located outside the main cities 18% average increase in turnover after EGP projects and 33% after BAS projects 29% average increase in productivity after EGP projects and 15% after BAS projects Investment Linkages Over 25% of BAS supported enterprises secure external financing after a BAS project In 2010, 23 SBS clients received 106m from EBRD investments. A further 18 SBS clients have reached concept review stage, amounting to 59m. 22

23 Thank you!