Strategies of the Development of Entrepreneurship and SME

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SME support infrastructure in ArmeniaScheme 1Government of theRepublic of ArmeniaSME DNC of Armeniawith the central office inYerevan and subsidiaries andrepresentations in the regionsNGOs representingthe interests ofentrepreneurs“Andron”TechnoparkBusinessServiceProviders(BSPs)SMEsBanking andnon-bankingfinancialinstitutionsWB EnterpriseIncubator(IT sector)ArmenianDevelopmentAgency(ADA)International and foreignorganizations running SMEsupport activities in ArmeniaIt must be noted that one of the most important component for the SME supportinfrastructure, such a business incubators and technoparks have a quite insufficient number inArmenia. Enterprise Incubator Foundation focuses its activity on assisting Armenian technologyfirms in a variety of areas including business development, marketing and promotion,management, accounting and finance, legal and other directions. Taking into consideration thecriteria for definition of SMEs in Armenia, it can be concluded that companies engaged in ITsector are mainly SMEs, but it is obvious that these companies by their financialresults/turnover are far from being SMEs.The “Andron” technopark, was established in the scope of the SME state supportprogram for 2004 and during the 3 years of its activity could attract only a limited number oftenants.Banking system is still far from being a sound part of SME support infrastructure inArmenia having into consideration the risk factor still existing while making decisions forfinancing SMEs. Only some banks which collaborate with the SME DNC of Armenia in terms of94
financial support to SMEs can be included in the support infrastructure. Considering to nonbankingfinancial institutions, some part of them get funding from international/foreign donororganizations which task is to support mainly SMEs.Armenian Development Agency (ADA) mainly assists to companies, which are dealingwith foreign investment and import and export activities. Hence large enterprises are still themain target of the ADA’s support.Summarizing the analysis of the SME Support infrastructure it is worth to mention thatthe SME support infrastructure is not complete in the country, having into consideration theabsence of many important components, the absence of linkages, as well as lack of counterinfluence and collaboration between some components of the infrastructure, indifference andinactiveness of the banking sector to SMEs etc.5.2.4. Financing Start-upsSupport to establishment and further development of new businesses has recentlybecome an issue of crucial importance for Armenian economy, although until recent years therewere no mechanisms for financing start-up businesses in Armenia.Despite positive changes in the attitudes of banks, more difficult access of SMEs to loanspersists. The banking sector is placing more emphasis on reducing risks in loans they grant,which is reflected in loans for SMEs. Banks concentrate on financing current operations ofcreditworthy SMEs and perceive increased risks in long-term loans for their investment plans.Moreover, banks and other financial institutions operating in Armenia request to includethe financial history of applicant in loan application in order to get loan. In the result of this,start-up businesses have no chance to get loan from banks.Since 2004 the Government elaborated a program measure on support to start-ups, whichinitially was called “Successful Start” and had technical character (training support). Forimplementation of this program measure the SME DNC of Armenia has collaborated withpartner international/foreign organizations, such as German Project “ProSME”, UNDP throughBSPs selected by tender. This program measure has been mainly implemented throughoutregions of Armenia in order to even out the development imbalances between Yerevan andregions formed in the last decade. Starting from 2005 the scope of this program measure hasbeen enlarged thus containing not only training, but also professional consulting andinformation components. At the ground level start-ups have been assisted by professionaltraining courses and personal counseling in formation of a business concept and developmentof their own business plans. At the end of the program with more succeeded start-upbusinesses long-term cooperation has been conducted. According to statistics since 2004technical support has been provided 282 start-ups, 92 of which have been registered as soleproprietors and legal entities thus initiating entrepreneurial activities in the country.In 2006 for expansion of loaning opportunities for start-up businesses and improvementof loaning terms, the SME DNC of Armenia worked out a mechanism for provision of financialsupport to start-ups and herewith envisaged funding for business plans of start-ups awarded tohigh assesssment. The loaning is performed by ACBA Credit Agricol bank, the partner bank ofSME DNC of Armenia: the maximum amount is AMD 1 million (about 3200 USD), with 12%annual rate and up to 3 year repayment term. The SME DNC of Armenia provides 100%guarantee for loan obligation provided to start-up businesses.Initially for attraction of corresponding financial means negotiations were conductedwith foreign and international donor organizations and with projects implemented by them. Inthe result of these negotiations, for provision of financial support to start-up businesses ''topcapital'' amounted for AMD 12 million was established. For establishment of ''top capital'' AMD95
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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
Page 44 and 45: The preparatory project of the NDP
Page 46 and 47: • To support participation in eco
Page 48 and 49: In 2004, the National Institute of
Page 50 and 51: Incubators host on average 11 SME,
Page 52 and 53: Programs. The program is implemente
Page 54 and 55: development instrument is extremely
Page 56 and 57: 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 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 108 and 109: The role of the state in technical
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
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BULGARIASTRENGHT• Flexibility and
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GREECESTRENGHT• They have a vital
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ROMANIASTRENGHTWEAKNESS• Stabilis
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REPUBLIC OF SERBIASTRENGHT• Longe
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UKRAINESTRENGTHS• Well educated l
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In compliance with the Resolution m
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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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