The third meeting of the EU4Business General Assembly took place on 28 June 2019 in Brussels, and marked the 10th anniversary of the EU4Business Initiative. During this high-level event, the EU4Business Secretariat shared the results achieved during the last decade, as well as the progress made specifically in 2018.
The 2019 General Assembly provided a unique opportunity for 83 participants, among which high-level representatives from the six Eastern Partner governments, EU4Business implementers and the European Commission, to exchange their experience in implementing the EU4Business programmes and projects. The participants related EU4Business support to the present needs of SMEs, as well as to recent economic developments in the Eastern Partnership region, and they shared success stories as well as lessons learned. While highlighting the successful implementation of the EU4Business Initiative in the last ten years, discussions also focused on the way forward. After a decade of implementation, there is a lot to learn and achievements to build upon in order to reconfirm EU4Buisiness as one of the flagship initiatives of the European Commission.
In the decade since it was launched in 2009, EU4Business has continuously evolved to match the EU’s strategic priorities as well as to reflect the needs of the SME sector in the Eastern Partner countries. The current EU4Business portfolio of 49 projects accounts for an EU commitment of €417 million, which has triggered a total EU4Business budget of over €3 billion.
Presentation of EU4Business achievements
The Assembly was opened by Nicholas Cendrowicz (DG NEAR) who started by stressing the importance of the Eastern Partnership in strengthening relations between the EU and its Eastern Neighbours throughout the last decade, as well as its key targets, the 2020 Deliverables, which have allowed to measure the progress of the Initiative.
During the first session, EU4Business Team Leader Dr. Julia Djarova (EY) presented the EU4Business Jubilee Report by offering a brief overview of the Initiative’s path from the moment of its inception in 2009 until today. The achievements of EU4Business in the past ten years speak for themselves, a good reason to congratulate the Initiative on its 10th anniversary.
The top 10 achievements of the past 10 years of EU4Business were highlighted:
1. 49 projects with an EU contribution of €417 million, triggering a total EU4Business budget of over €3 billion;
2. More than 85,000 SMEs were supported across all six Eastern Partner countries;
3. Over 120,000 loans were provided to about 80,000 SMEs;
4. Almost €2.5 billion of loans were disbursed to SMEs;
5. Today, more than 50% of the loans are in local currency;
6. EU funding to the DCFTA Facility is €194.5 million, which has unlocked €2.5 billion;
7. More than 250,000 jobs in SMEs were supported and 34,000 new jobs were created through EU4Business;
8. Over €60 million were allocated to almost 7,250 women-led SMEs under the Women in Business programme;
9. Close to 77,000 people were trained and more than 57,000 people participated in events;
10. 72 new laws were implemented in all six partner countries, and another 137 drafted.
Dr. Julia Djarova stressed that in addition to these 10 main achievements over the last decade, there is also an indirect impact that should be mentioned. The SME contribution to both GDP and employment has increased substantially, confirming that EU4Business is paving the road to a growing sustainable and inclusive SME sector in the partner countries. EU4Business also contributed substantially to an improved business environment for the small and medium-sized business in the EaP. Today all countries in the region have SME development policies and dedicated SME agencies or support bodies.
During the second morning session, the EU4Business Secretariat presented the EU4Business Annual Report 2019, with an overview of the key results achieved in 2018. Analysing results across all programmes and projects implemented during 2018, the EU4Business Secretariat highlighted the substantial achievements of the Initiative and its increasing momentum:
• 6,024 SMEs have received loans from Participating Financial Institutions (PFIs) and International Financial Institutions (IFIs) through supported EU4Business programmes.
• Over 960 SMEs have received loans from Participating Financial Institutions (PFIs) and International Financial Institutions (IFIs) through the DCFTA Facility programmes.
• 4,870 women-led SMEs have received loans from Participating Financial Institutions (PFIs) and International Financial Institutions (IFIs) through supported EU4Business programmes.
• The value of loans disbursed to SMEs by PFIs and IFIs accounted for over €315 million.
• The total value of loans disbursed to SMEs by DCFTA Facility programmes accounts for almost €192 million.
• The total volume of loans/guarantees/capital investments to PFIs for on-lending to SMEs in local currency was over €220 million. Lending in local currency currently represents more than 50% of loans under the Initiative.
• Over 8,500 people from SMEs, PFIs and BSOs have been trained or coached, and over 27,000 people have attended events organised under the EU4Business initiative.
• 290 women entrepreneurs received training through supported EU4Business programmes.
• Over 66,000 jobs in SMEs have been supported and almost 6,000 new jobs have been created.
• Over 38,000 jobs in SMEs have been supported and almost 2,440 new jobs have been created by the DCFTA Facility under the EU4Business Initiative.
The results of stakeholder consultations, namely SME focus groups and national EU4Business round-tables, organised by the EU4Business Secretariat in the spring of 2019, were presented to the participants of the General Assembly. These country events discussed the way forward for EU4Business, and involved more than 250 participants. The highlights of the discussions include the following areas of support that require further attention in the near future:
• Eastern Partner countries’ access to the EU market takes much more adjustment time and investment than initially anticipated.
• Local currency lending seems the best way forward to increase SMEs’ access to finance.
• Investing in creating access to finance will remain important, including a focus on small companies.
• Linking financial instruments and technical assistance can accelerate the growth of SMEs.
• There is increasing demand for targeted expertise delivered to SMEs by peers.
• It is important to bring the EU market virtually closer.
• Learning from the past to maximise impact.
• It is vital to reach out beyond the capital cities.
10-year performance discussion
The afternoon session was held in the form of a moderated discussion on the key achievements of EU4Business over the past ten years, with EU4Business implementers and beneficiaries having the opportunity to share their major experiences related to the four priority areas under EU4Business, namely improving access to finance, strengthening policy and regulatory frameworks, improving knowledge base and business skills, and improving access to markets.
The afternoon discussion was moderated by Binh Adjemian (DG NEAR). The main presenters from the implementing partners were the EBRD, EIB, KfW, OECD, GIZ, and ITC. In their presentations, these implementers shared successes and lessons learned as well as concrete suggestions for the way forward of the EU4Business Initiative. The discussions on programmes’ implementation were followed by discussion on communication and awareness of EU4Business as a whole.
In addition to the implementers, SME representatives from the region shared their views that EU support has been most successful in the following areas: a) providing access to finance to SMEs and related advisory services; b) supporting a more competitive and attractive environment for SMEs; c) encouraging the internationalisation of SMEs; and d) strengthening institutional capacity and policy implementation related to SMEs.
Key conclusions mentioned by a majority of participants include:
• While most of the programmes included in the EU4Business portfolio have a regional focus, experiences from the implementation show that the social, economic and political contexts of the different Eastern Partner countries need to be taken into account. In this respect, bilateral projects do provide a more tailored approach.
• Long-term programmes, especially under the access to finance priority and also under the DCFTA Facility, are welcome. The process of scaling up SMEs needs time and this is especially valid for SMEs wanting to trade with the EU.
• Access to finance programmes are prevailing and this reflects the needs of SMEs in the region. The way forward is to continue providing loans in local currency as have been successfully implemented not long ago. Beneficiaries stressed the value that finances and advisory services should go hand in hand as experience shows that this combination is successful.
• There still seems to be a potential for developing instruments that would reach out to smaller businesses, even micro-enterprises and start-ups. In order to broaden the scope of financial instruments, and make them available to a broader range of SMEs, further investment is needed to strengthen the banking sector and deepen the non-banking financial market, supporting leasing, factoring and equity funding.
• The importance of technical assistance, training and mentorship, in particular for innovative SMEs, has been repeatedly highlighted in order to ensure appropriate absorption capacities and sustainable use of funding and other support. Using peers from EU Members States as mentors is appreciated by SMEs in the Eastern Partner countries.
• EU4Business is already well known in the EaP countries as well as elsewhere. However, access is still challenging. The awareness and communication work carried out by all parties, the EU4Business Secretariat, the implementers and the EC and the EU Delegations, should continue.
• The work on monitoring the EU4Business achievements and impact should deepen even further.
Binh Adjemian (DG NEAR) closed the General Assembly by stressing the diverse means of communication and how important it is that partners learn from each other as well as from the feedback provided from the partner countries.
The EU4Busuiness anniversary has been a moment to reflect and also look forward. Mature and yet fast growing, EU4Business has become one of the Eastern Partnership’s flagship initiatives, demonstrating the progress made in EU-EaP relations in the past ten years. At the same time, the Initiative has more ambitions for the future and there are still important challenges ahead if the SME sector is to become a true backbone of the economies of the EU’s Eastern neighbours.