Macedonian SMEs are becoming more competitive thanks to EU and EBRD

By Viktorija Melohina

  Macedonian SMEs are becoming more competitive thanks to EU and EBRD

Supporting growth and boosting competitiveness of Macedonian small and medium-sized enterprises (SMEs) is key part of the EBRD’s work in the country. Over the years the Bank has developed several programmes to support the development of this vital sector of the economy and today one of them, the SME Competitiveness Support Facility (SME CSF), is taking stock of its achievements in Skopje.

Thanks to the advice and financing provided under this facility, 74 local businesses with combined revenues equalling 2.5 per cent of the Macedonian GDP were able to increase their turnover in total by 14 per cent and their workforce by 16 per cent.

This Facility served as an instrument for translating EBRD’s strategy for supporting the Macedonian private sector competitiveness into practice. It combined access to finance with the necessary technical assistance for overcoming limitations to access suitable medium to long term financing, such as the lack of awareness and compliance with international best practices.

The programme, supported by EU grant funding, was launched in April 2010 and to date has provided €19 million to enhance the competitiveness of Macedonian SMEs. EBRD credit lines to local banks have been on-lent to local firms to promote EU production standards and directives in the fields of environmental protection, occupational health and safety and product quality. Local companies also benefited from grants that were paid to them follwing successful completion of their projects.

Most of the loans were provided to companies in the food and beverages processing industry and to companies manufacturing sector mainly paper, metal, plastics and glass processing industry.

“We want to thank the participating banks Ohridska Banka Société Générale, Sparkasse Bank, Halkbank and NLB Tutunska Banka for helping us reach SMEs across the country even in remote regions. Small businesses are the foundation for strong economic growth. We are proud to have delivered this programme to support the development of the private sector, and we would like to thank the EU for helping us implement the SME Competitiveness Support Facility,” said EBRD Head of Skopje Office, Anca Ioana Ionescu.

Although the country has a fairly developed and liquid commercial banking system, the  local SMEs remain underserved by the local financial institutions. Having an objective to address the key market failures that limit growth of SMEs the EU created a number of instruments to facilitate their access to finance. EU interventions provide added value by complementing the financial resources available at national level and mobilising additional finance. I would like to encourage the relevant public authorities, local commercial banks and other financial intermediaries to use them to support the growth of SME sector in the country”, said Martin Klaucke, Head of Cooperation  Secretariat from European Union Delegation in Skopje.

The EBRD began investing in the Macedonian economy in 1993. To date, it has signed over 90 projects in the country with a net cumulative business volume of more than €1.5 billion.