SME Policy Index: Western Balkans and Turkey 2016

Assessing the Implementation of the Small Business Act for Europe

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The SME Policy Index is a benchmarking tool designed for emerging economies to assess SME policy frameworks and monitor progress in policy implementation over time. The Index has been developed by the OECD in partnership with the European Commission (EC), the European Bank for Reconstruction and Development (EBRD), and the European Training Foundation (ETF) in 2006 for the Western Balkans. The South East European Centre for Entrepreneurial Learning (SEECEL) joined as an additional partner in 2014. The SME Policy Index has since 2006 been applied in four regions and nine assessment rounds overall.

The SME Policy Index: Western Balkans and Turkey 2016 presents the results of the fourth assessment of the Small Business Act for Europe in the Western Balkans and, since 2012, Turkey. The assessment framework is structured around the ten principles of the Small Business Act for Europe (SBA). It provides a wide-range of pro-enterprise measures to guide the design and implementation of SME policies based on good practices promoted by the EU and the OECD.

The Index identifies strengths and weaknesses in policy design, implementation and monitoring. It allows for comparison across countries and measures convergence towards good practices and relevant policy standards. It aims to support governments in setting targets for SME policy development and to identify strategic priorities to further improve the business environment. It also helps to engage governments in policy dialogue and exchange good practices within the region and with OECD and EU members.


Access to finance for SMEs (Dimension 6) in the Western Balkans and Turkey

Facilitate SMEs’ access to finance and develop a legal and business environment supportive to timely payments in commercial transactions (Small Business Act Principle 6)

Access to finance is an important challenge for many SMEs in the Western Balkans and Turkey. According to the latest Business Environment and Enterprise Performance Survey (BEEPS V), obtaining credit is one of the top five challenges to doing business. This chapter focuses on government policies that can help SMEs access financing of different types, in line with Principle 6 of the Small Business Act for Europe. Bank lending remains the main source of financing for SMEs even though access to bank loans has been tightened as banks reduce their leverage and lending is held back by high levels of non-performing loans. Some governments provide support programmes but they tend to be based on interest rate subsidies rather than more commercially viable tools such as credit guarantees. Alternative non-bank sources of finance such as leasing and microcredit are generally available but not used to their full potential. Adequate legal frameworks might support their wider use. Generally the legal frameworks for secured transactions are reasonably well developed across the region, but enforcement can still be an issue and some economies lack out-ofcourt mechanisms. Financial literacy levels are relatively low and programmes to raise them could benefit from further co-ordination and focus.


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