|
EBRD and US back programme to assist small business to south-eastern Europe
Promoting growth and opportunity for small businesses across south-eastern Europe (SEE) is at the heart of a new US$ 150 million assistance programme to be coordinated by the European Bank for Reconstruction and Development (EBRD).
Launched today, the programme is funded by US$ 100 million from the EBRD, the largest private-sector investor in eastern Europe, and up to US$ 50 million, over a 4-year period, from the United States of America. The EBRD hopes to attract further funds from other donors, which will enable it to expand the reach of the programme.
The programme will allow the EBRD to increase its support of small businesses across south-eastern Europe, a region that came under tremendous economic and social strain following last year’s Kosovo crisis. Targeting the six countries of SEE (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia and Romania) as well as Kosovo, the programme will begin lending towards the end of the summer.
"In a healthy market economy small businesses represent the seeds for growth. This is why it is tremendously important that we cultivate entrepreneurial initiative," said Jean Lemierre, President of the EBRD. "The programme will play a significant role in promoting the long-term economic recovery of the region, which is one of the main aims of the Stability Pact for south-eastern Europe." The Stability Pact was launched by the international community last summer in response to the impact of the Kosovo crisis.
The programme will target companies ranging from the micro-sized – up to 20 employees – to small and medium-sized enterprises (SMEs), which typically employ up to 100 employees and up to 250 employees respectively. Mr Lemierre added: "We will support local small entrepreneurs, such as bakeries, dry cleaners, small manufacturers and other businesses in all walks of life. We will be taking business dreams and helping to turn them into business realities."
The EBRD has been promoting small businesses across eastern Europe since the Bank was founded in 1991. In 1994 it launched the Russia Small Business Fund, which has gone on to support over 37,000 small companies and entrepreneurs. Since the Stability Pact was established last year in Sarajevo, the EBRD has accelerated its support for small businesses in SEE. The Bank supported the creation of a micro credit bank in Kosovo, in January 2000, and has established a number of credit lines to local banks in Albania, Bosnia and Herzegovina and FYR Macedonia for on-lending to SMEs.
"The EBRD knows how to make micro and small-business lending programmes work," said Karen Shepherd, US Director at the EBRD. The goals of the programme, said Ms Shepherd, are to provide lending capital, identify obstacles to business success, and engage in a policy dialogue that will remove those obstacles. "We think this programme will enable the people of south-eastern Europe to take part in the task of rebuilding those economies, and we welcome partner donors who might join us in this important effort," Ms Shepherd added.
In an EBRD/World Bank report last year, the two institutions said a key barrier to growth are investment climates that fail to support local businesses and actually hinder them through local government interference or unfair taxes. The EBRD will use part of the money to strengthen the foundations for growth, for example by training local bank staff and assisting local authorities to create a regulatory environment conducive for small business development. The programme will also provide wider access to finance, by expanding existing credit lines to local banks, establishing new credit lines and setting up further micro-enterprise banks.
|
