SME Policy Index: Western Balkans and Turkey 2019

Assessing the Implementation of the Small Business Act for Europe

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Robust SME sectors are critical to the prosperity of the six Western Balkan economies and Turkey, accounting for over 70% of those employed in the business sector and generating 65% of value added in these seven economies. Yet their potential remains untapped, as SMEs across the region grapple with numerous challenges that hamper their growth and productivity. They are still under-represented in international trade, and their contributions to value-added remain comparatively low as they have difficulties in moving or expanding into high value-added activities.

This report provides a comprehensive overview of the implementation of the ten principles of the Small Business Act for Europe (SBA) in the seven EU pre-accession economies over the period 2016-18. It monitors progress against similar assessments performed over the past decade and identifies the outstanding challenges affecting SMEs. It also provides targeted recommendations to remove barriers to SME development and unleashing their potential for driving inclusive economic growth.



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

This chapter assesses the policies in the Western Balkans and Turkey that support SMEs’ access to external sources of finance. It starts by providing an overview of the assessment framework and progress since the last assessment in 2016. It then analyses the five sub-dimensions of Dimension 6: 1) the legal and regulatory framework, which looks at the legal and regulatory environment for creditor rights, collateralisation options, credit information systems, banking regulation and capital markets; 2) bank financing, focusing on the provision of bank loans and government support schemes to facilitate access to credit; 3) non-bank financing, which considers the legal framework and availability of alternative financing instruments such as microcredit, leasing and factoring; 4) the venture capital ecosystem, examining the financing environment for start-ups and young firms; and 5) financial literacy, focusing on efforts to broaden financial management skills among the business community and the wider population. Each sub-dimension concludes with key recommendations for helping to resolve specific challenges in facilitating SMEs’ access to finance.


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