Albania has been proactive in strengthening its institutional, regulatory and operational environment for SME development since the 2012 SBA Assessment. The Business Investment and Development Strategy for 2014-2020 frames the country’s policy for promoting the SME sector. Albania has introduced a new e-government portal which eases business operations and launched a new tax filing system which allows for the online filing of all taxes. The National Business Centre acts as central one-stop shop for businesses. In addition, Albania has improved its policy framework for entrepreneurial learning. Going forward, the government should pay particular attention to formalising its regulatory impact analysis and developing a proportional approach to its use. It should strengthen the institutional support mechanisms for bankruptcy by developing an early warning system and second chance programmes. The Albanian government authorities should ensure that actions outlined in its strategies are systematically implemented, monitored and evaluated. Developing the necessary infrastructure and financial instruments will be necessary to promote innovation within SMEs. Targeted support services would help SMEs acquire the skills to move into knowledge-intensive sectors. Non-banking sources of finance remain limited and should be broadened.

Bosnia and Herzegovina has made incremental progress since the 2012 assessment, but its business environment continues to be cumbersome and it still lags behind its regional neighbours in small and medium-sized enterprise (SME) policy development. The weak co-ordination between public institutions at state and entity levels not only leads to the creation of disconnected policies but also impedes their implementation. More positively, a new public procurement law was adopted in 2014. The signing of the Stabilisation and Association Agreement with the European Union established access to EU public procurement markets. The country has made efforts to promote entrepreneurial skills with the introduction of a nationwide entrepreneurial learning strategy, and introducing entrepreneurial skills into school curricula. Bosnia and Herzegovina continues to face severe issues with bureaucratic procedures such as company registration and business licensing, which currently have to be performed twice, once in each respective entity, creating serious market distortions within the country. SMEs and start-ups would benefit from a strategic approach to innovation and financial instruments to promote it. Access to finance remains a major obstacle for SME development. These challenges, and others, highlight the growing need for increased policy co-ordination between the state and entities and the need to introduce a nationwide SME development strategy.

Kosovo has made significant progress since the 2012 assessment, in particular in improving its institutional environment for SME development through launching its new Private Sector Development Strategy 2013-2017. It has improved the business environment through simplifying company registration procedures and by introducing one-stop shops across Kosovo. Access to finance has been improved through a strengthened legal and regulatory framework but lending remains constrained by a challenging economic environment with high levels of informality. The implementation of the entrepreneurship and skills agenda has mainly involved higher education. Kosovo now needs to finally adopt its innovation strategy and help SMEs make better use of technology, research and innovation. The government should further expand e-services and raise awareness of them among the business community. The market for non-banking finance should be deepened and broadened. Export finance tools should be developed to help export-oriented SMEs expand into foreign markets. Finally, mechanisms to stabilise lifelong learning partnerships among public, private and civil society should be put in place.

The Former Yugoslav Republic of Macedonia is one of the most advanced economies in the region in promoting its SME sector. Its institutional framework and operational environment continues to have a high level of EU SME policy convergence. Although it has a fairly solid policy framework in place, it needs to make further efforts to ensure the proper delivery of services meeting the needs of SMEs. Its innovation framework for SMEs has been significantly improved by the introduction of a strategy, law and fund, building the foundations for the promotion of innovation among SMEs. The banking regulatory framework has been further strengthened by aligning it more closely with Basel II principles. Technical standards and regulations are fairly well aligned with the European Union. The e-procurement system has been further developed since 2012 and the entrepreneurship promotion and skills agenda is being successfully implemented. Moving forward, SME development policy should be anchored in a higher level national strategy, allowing these reforms and programmes to continue to effectively promote SME development. Regular monitoring of activities and light evaluation of support programmes should be encouraged to ensure that the needs of SMEs are met and to justify government funding. Sources of non-banking financing should be encouraged, to diversify the financial base for SMEs and ease their access to finance.

Montenegro has made some improvements in the institutional, regulatory and operational environment for SMEs since 2012, although SMEs still face challenges resulting from an uneven economic recovery. Its technical standards are now largely harmonised with the EU acquis, business registration requirements have been further eased and e-government services have expanded. Tax payment procedures have further been simplified and made available electronically, with the double benefit of increasing tax compliance and curtailing informal economy activity. The government has also made considerable efforts to harmonise entrepreneurial learning across different national strategies. It has established an institutional infrastructure and financial instruments to promote innovation in SMEs. However, although the country has relatively well-developed microfinance products, access to finance continues to be a major constraint for SMEs. Montenegro should now consider further steps to enhance access to finance: among them to facilitate the establishment of a private credit bureau and initiatives to enhance financial literacy. The government should increase its efforts to provide horizontal and targeted business support services, particularly in the key areas of supporting SME access to foreign markets and providing financial and nonfinancial support for innovation. Montenegro might also consider integrating the entrepreneurship key competence into the curricula.

With its small internal market dominated by services and a still intrinsically consumption-driven economy, Serbia’s key policy priorities are economic competitiveness and export-led growth. Building on a well-developed institutional framework for SME policy with a forward-looking SME development strategy, Serbia has improved its operational environment for SMEs, particularly on company registration and e-government services. Serbia’s strong focus on SME training needs analysis represents a further major step forward. It has further progressed in promoting innovation within SMEs, allowing entrepreneurs being more actively involved in international collaboration programmes. Going forward, a key medium-term priority should be the establishment of a monitoring system tracking progress in the implementation of its SME policies and measuring their effectiveness on the ground. Access to finance for SMEs should be strengthened by broadening options for non-bank financing. The government further needs to address burdensome regulations in key areas such as permits and licences. Environmental policies for SMEs have not been implemented yet and SME policy is not yet considered as an integral part of environmental policies.

Building on a solid track record and starting from a high base, Turkey has strengthened its SME-related policies since 2012, and provides an extensive range of support services. Despite an initial slowdown in GDP growth after the global financial crisis, Turkey has recovered and its businesses have proven fairly resilient to the crisis. Turkey has made noticeable efforts to implement its innovation strategy, putting in place substantial financial instruments and schemes to directly support innovative SMEs. Currently, Turkey is attempting to reduce delays in its bankruptcy system by introducing streamlining reforms such as eliminating multiple enforcement offices in the same location. The promotion of lifelong entrepreneurial learning has been supported by the establishment of a National Entrepreneurship Strategy and Action Plan. Despite encouraging signs of continued progress, Turkey still has cumbersome and costly registration procedures for businesses. Informal market activity remains high in part due to the burdensome bureaucratic system and the Action Plan of Strategy for Fight against Informal Economy 2011-2013 has yet to be renewed. Although access to finance has generally improved, Turkey still needs to establish a legal microfinance framework and to help improve the capacity of financial institutions to offer the sort of long-term funding options to SMEs which are currently often only available to large corporations.