EBRD pledges support to EU for Deep and Comprehensive Free Trade Area (DCFTA) Facility for SMEs in Eastern Partnership countries

DCFTA provides new opportunities for SME financing

LONDON, 22-5-2015 — /EuropaWire/ — The EBRD can play a crucial role in unlocking finance for SMEs in Eastern Partnership (EAP) countries, a senior EBRD executive told businessmen at a conference in Riga today.

The EBRD pledge to help coincided with the announcement by the EU of a Deep and Comprehensive Free Trade Area (DCFTA) Facility for SMEs, worth approximately €200 million of grants, allowing partners such as the EBRD and the EIB to do even more to support small businesses.

Access to finance is currently a major challenge for SMEs, in particular those in transition countries. Potentially, they are the powerhouse of any healthy market economy, driving growth by creating jobs and promoting innovation and competitiveness.

Increasing the financing available to this crucial segment of the private sector was the focus of a panel moderated by Charlotte Ruhe, EBRD’s Director of the Small Business Support programme, in the context of the third EaP Business Forum in Riga.

Strengthening the financial sector is a priority in the EaP countries, stressed Francis Malige, the EBRD’s Managing Director for Eastern Europe and the Caucasus. The EaP countries include Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

“SMEs as well as larger firms in the region need stronger banking systems that can offer lending and facilitate access to capital markets,” he said.

“That’s why the EBRD, which is the largest financial investor in the region with about 1000 projects and over €18 billion invested over the past two decades, operates across the entire spectrum: from SMEs to banks and capital markets.”

Transparency and a healthy investment climate are also essential to strengthen local financial institutions, pointed out Gerhard Schumann-Hitzler, the European Commission’s Director for Neighbourhood East.

Heinz Olbers, the European Investment Bank’s Director for Eastern Neighbours and Central Asia, stressed the importance of clear business plans and the support of technical cooperation for accessing more financing.

“It is about skills and knowledge as much as it is about finance”, Francis Malige agreed. Often, it is about seizing the kind of opportunities on offer, for example, in the Deep and Comprehensive Free Trade Area (DCFTA).

Georgia, Moldova and Ukraine, which signed Association Agreements with the EU for the creation of a DCFTA, will benefit from increased finance to SMEs through a dedicated Facility.

The DCFTA Facility for SMEs, worth approximately €200 million of EU grants, allows implementing partners such as the EBRD and the EIB to support businesses in raising product and service standards to prepare them for the DCFTA and boost trade with the EU, the world’s largest market.

The Facility combines financing through direct lending and lending through local partner banks, plus business advice and policy dialogue to improve the business and investment climate in the three countries.

Only last week the EBRD and EU launched the first project under DCFTA Facility in Georgia. A local broadcast operator Stereo+ Ltd, obtained an EBRD loan through local TBC Bank to manage Georgia’s switch from analogue to digital broadcasting.

The digital switchover is critical for modernising the information technology and communications sector and help Georgia to meet EU standards. The European Union (EU) supports this transaction through a risk-sharing facility.

This is just one example of the potential impact that the DCFTA could have in not only improving small businesses but also in modernising the countries involved.

Its success, all on the panel agreed, will depend on the committment of all actors – from SMEs to the banking sector – and the support of international financial institutions such as the EBRD.

MEDIA CONTACTS

###

EBRD pledges support to EU for Deep and Comprehensive Free Trade Area (DCFTA) Facility for SMEs in Eastern Partnership countries

EBRD pledges support to EU for Deep and Comprehensive Free Trade Area (DCFTA) Facility for SMEs in Eastern Partnership countries

Follow EuropaWire on Google News
EDITOR'S PICK:

Comments are closed.