Strategies of the Development of Entrepreneurship and SME

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The role of the state in technical support for SME and development of human resourcesis to improve information supply for SME, training and retraining of entrepreneurs andvocational training for SMEs, provide training, advocacy and information service on theentrepreneurship basis for youth finishing a military service, etc.In order to increase the development of regional entrepreneurship the following stepsshould be taken:- Attraction of investment to regions;- Providing speedy development of entrepreneurship in the regions;- Formation of local market infrastructure of entrepreneurship;- Development of farming enterprises.Reinforcement of protection of entrepreneurs’ rights:- Simplify state register of entrepreneurship subject;- Draft proposals on reinforcement of contract law norms and improvement of judgmentprocedure of contract argument through courts;- Removal of unlawful interference in entrepreneurship activity;- Technical and organizational support for public unions of entrepreneurs to renderprotection of rights and interests to their members.The financial support infrastructure to SMEs should be broadened. Major commercialbanks don’t have their divisions in the regions. The structure and situation of financial marketin the country cannot be considered suitable for business people as it doesn’t meet theirdemands and needs at all. First of all, the financial institutions should be diversified, specializedcommercial banks financing different sectors of economy, especially sectors such as processingof agricultural products, tourism, export - import operations should be established, investmentfunds and other financial infrastructure should be created.In order to establish information supply database for entrepreneurs it is necessary tocreate business centers in the regions. But, it is impossible to solve the problems concerningrendering of professional consulting services and information supply by increasing the numberof these centers only formally. In order to solve the problem deeply the program in nationallevel on training of professional specialists should be developed. It is important to create thenetwork of business consultants in national level and ensure the activity of this network on thebases of business centers’ resources established in the regions.The development of distributing, franchising, dealer services, establishment of businessincubators and free economic zones will assist in strengthening process of SME supportinfrastructure.5.3.4 Financing Start-upsThe key roles of the state in financing and investment support for SME development inthe country are to develop the state guarantee for investment, form beneficial tax system,broaden credit base of SME, expand opportunities of attraction investment resource in SMEsphere, etc.The SME sector in Azerbaijan is mostly financed by the local investment sources. Themain source of financing is the National Fund for Support to Entrepreneurship (NFSE). The fundprovides SMEs with the privileged credits. Every year USD 100 million are allocated by thestate budget to the Fund and these credits are distributed between SMEs with 7% rate a year.108
Table 28.The structure of the credits issued by the NFSECredits Maximum amount [USD] PeriodMicrocredits Up to 1,176 2 yearsLow volume credits 1,176 – 3,5294 2 yearsMedium volume credits 35,294 – 117,647 3 yearsBig volume credits 117,647 – 1,176,470 5 yearsLarge-scale credits 1,176,470 – 3,529,411 7 yearsDistribution of the resources of NFSE on the sorts of credits in 2005-2007Sorts of creditsNumber ofprojectsShare inprojects[%]Amount ofcredits[USD million]Table 29.Share incredits[%]Microcredits 2,309 53.3 2.2 1.1Low volume credits 548 12.7 3.1 1.5Medium volume credits 357 8.2 8.5 4.3Big volume credits 995 23 103.1 51.5Large-scale credits 122 2.8 83.1 41.6TOTAL 4,331 100 200.0 100DirectionsDirection of the use of resources of NFSENumber ofprojectsShare inprojects[%]Amount ofcredits[USDmillion]Table 30.Share incredits[%]Industrial products 598 13.8 883.5 44.2Processing of agro products 113 2.6 330.6 16.5Production of agro products 3,262 75.3 55.5 27.7Tourism 59 1.4 15.0 7.5Service sector 297 6.9 7.0 3.5Mass – Media 2 1.1 0.6The credits distributed by the commercial banks and other local and internationalfinancial institutions (European Bank for Reconstruction and Development, Asian DevelopmentBank, etc.) has very high rate (18 – 28% a year) and they are issued with hard mortgageconditions. By one word, the existing credit system in Azerbaijan, credit rates, duration,conditions related to mortgage guarantee, offered privileges are not satisfied business people,especially SMEs in the country, the credits issued by the NFSE isn’t sufficient and not relevantto the increasing demand of SMEs. That is why the amount of the credits allocated by the statebudget to NFSE should be increased, the distribution mechanism of credits should be reviewed,and more simple and minimum bureaucratic mechanism should be established, the mechanismshould be transparency and conditions for corruption should be eliminated.109
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1. SME DECLARATION AND WORKING GROU
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While comparing the BSEC and EU doc
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cooperation with the United Nations
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GENERAL ASSESSMENT OF THE BSEC WG O
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“Armenia's new law introduces a n
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(iii)Share of the labor force of SM
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The following data represents some
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RankDocuments for export(number)Tra
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• Industrial zones/Business incub
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3.1.4. FINANCING SMEsProf. Dr. Sela
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• the loan is secured with movabl
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3.1.4.3. Mutual and loan guarantee
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introduction of e-signatures, only
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The Code of Conduct for Civil Serva
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Trading Across Borders Enforcing Co
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as with all non-governmental organi
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Bulgarian SMEs obtain additional ca
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• Project BG 2004/016-711.11.04 -
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usiness is not approaching them oft
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• Romanian citizens are recognize
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The preparatory project of the NDP
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• To support participation in eco
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In 2004, the National Institute of
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Incubators host on average 11 SME,
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Programs. The program is implemente
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development instrument is extremely
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accounting standards, including med
Page 58 and 59: corporations and open held corporat
Page 60 and 61: promoting SME sector, cooperation w
Page 62 and 63: • for unemployed (micro credit)
Page 64 and 65: are private pension funds, broker h
Page 66 and 67: very early steps of its democratic
Page 68 and 69: Another negative factor that is mor
Page 70 and 71: economy. The so called in the organ
Page 72 and 73: Federal funds, private capital, esp
Page 74 and 75: 4.3. MOLDOVATable 14.Dimensions Neg
Page 76 and 77: Related andsupportingindustriesDome
Page 78 and 79: Technological:Internetaccessibility
Page 80 and 81: Domesticdemand• Still not many pe
Page 82 and 83: international investments• Govern
Page 84 and 85: 3. Hamel, G., Prahalad, C.K. (1994)
Page 86 and 87: 5.2 DEVELOPMENT OF THE SME SECTOR I
Page 88 and 89: General Characteristic of SME Devel
Page 90 and 91: Index of SME Development in Armenia
Page 92 and 93: The same problem exists in getting
Page 94 and 95: SME support infrastructure in Armen
Page 96 and 97: 5 million was provided by UNDP and
Page 98 and 99: 5.3 DEVELOPMENT OF THE SME SECTOR I
Page 100 and 101: Diagram 1. The number of small ente
Page 102 and 103: The privatization process of object
Page 104 and 105: 13.Cabinet Provision on “Distribu
Page 106 and 107: 5.3.3. SME support infrastructure i
Page 110 and 111: General situation of credit marketT
Page 112 and 113: After creation and starting impleme
Page 114 and 115: At the meantime, small enterprise s
Page 116 and 117: Table. 32.Ease of businessDoingBusi
Page 118 and 119: people who start small businesses t
Page 120 and 121: are salaried and the medium - sized
Page 122 and 123: Technology Foresight in Greece 2001
Page 124 and 125: Greek VC market started to develop
Page 126 and 127: In the area of bankruptcy and restr
Page 128 and 129: enterprises. According to TURKSTAT,
Page 130 and 131: small size enterprise or micro ente
Page 132 and 133: industrial enterprises. Undersecret
Page 134 and 135: individuals, rather than well struc
Page 136 and 137: 7. SUGGESTIONS FOR THE SME DEVELOPM
Page 138 and 139: Annex 1.MAP OF THE BLACK SEA COUNTR
Page 140 and 141: 17-18 June 2005 1 st Moscow Interna
Page 142 and 143: ARMENIASTRENGTHS• Application of
Page 144 and 145: BULGARIASTRENGHT• Flexibility and
Page 146 and 147: GREECESTRENGHT• They have a vital
Page 148 and 149: ROMANIASTRENGHTWEAKNESS• Stabilis
Page 150 and 151: REPUBLIC OF SERBIASTRENGHT• Longe
Page 152 and 153: UKRAINESTRENGTHS• Well educated l
Page 154 and 155: In compliance with the Resolution m
Page 156 and 157: 1. Please provide definition of SME
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7. Did you establish a dedicated bo
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11. Do you have any suggestions for
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Strategies of the Development of Entrepreneurship and SME

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