EBRD Small Business

Support (SBS)Support (SBS)

Natalia Meylunas

SBS Head of Regional

Programme, Western Balkans

Small Business Support (SBS) overview

� EBRD fosters entrepreneurship not only through capital funding but also by providing business expertise

� Small Business Support (SBS) has been helping MSMEs to adapt to the demands of a market economy since 1993

At a glance

Number of projects to date (EGP and BAS combined): 12,000+

EGP projects: 1,870

2

economy since 1993

� 2 instruments of the SBS, the Enterprise Growth Programme (EGP) and Business Advisory Services (BAS) are essential components of the EBRD transition toolkit

� Run on a not-for-profit basis in over 20 EBRD countries of operations

� Over €200m in funding utilised to date from bilateral and multilateral donors

BAS projects: 10,200

Market development activities:595

Total investments secured by client companies:€ 1.45 billion

EGP and BAS

� Complementary technical assistance programmes, Donor funded, Not-for-profit

� Combine direct assistance at the enterprise level with systemic market development interventions

� Business Advisory Services (BAS):� Business Advisory Services (BAS):

o Use of local consultants by giving grants to MSMEs to obtain a diverse array of consulting services

o Systemic Market Development Activities to develop a sustainable infrastructure of advisory services and SME support

� Enterprise Growth Programme (EGP):

o Substantial managerial and structural improvements in SMEs by engaging experienced senior executives and industry experts as advisors

o Sector Development Activities to disseminate best practices and lessons learnt

Enterprise Growth Programme(EGP)

Entrepreneurial Professional

More structured

Board governance with

Involved in everything

Taking all decisions (no

Transition from Entrepreneurial to a Professional Company

Challenge is to maintain entrepreneurial culture in a more structured environment

Board governance with

records of decisions

Delegated authority to

‘specialists’ (e.g. CFO)

‘Systems’ + ‘culture’

*Equipped for growth*

4

Taking all decisions (no

delegation, no records)

Informal

Spontaneous

*Limit on growth potential*

EGP Methodology

� Project lasts 12-18 months, visits every 6-8 weeks

� Experienced senior executives work with CEOs and management teams

Project team consists of Senior Industrial Advisor (SIA), � Project team consists of Senior Industrial Advisor (SIA), Specialist(s) and Team Coordinator / Local Manager

� Scope tailored to the needs of the individual enterprise

� Typical areas: General management, Sales and marketing, Financial and strategic planning, Attract finance, Organisational restructuring, Production and design, Export opportunities, International standards

EGP Project Cycle

• Identification and screening of candidate enterprises (referrals

from EBRD teams, local institutions, chambers etc)

• Selection and approval by EGP management team (HQ)

• Senior Advisor selected and appointed to the project

• First visit, Project work plan & Objectives agreed

• Team visits, actions followed on

• Mid term review, Final project review

• Evaluation

EGP Enterprise criteria

� Medium size enterprises, normally >100 employed, >€1 million t/o

� All sectors, except banking and financial services, military

products/services, gambling, tobacco and hard liquors

� Private, majority locally owned businesses with significant

importance for the local economyimportance for the local economy

� Acceptable debt structure, potential to be commercially viable in the

longer term

� Strong commitment to undergo restructuring / development

programme agreed

� Willing to co-share minimum 10% of total project cost (~ €5,000)

EGP in the Western Balkans

� Until present, EGP has implemented around 500 projects, of which 38 were in Bosnia and Herzegovina, 35 in Croatia and 184 in Serbia

� Project Impact:

Bosnia and Herzegovina (since 1997)

Croatia (since 1999)

Serbia (since 2001)

No. of assisted 71% 47% 67%

� €25.7 million of donor funding from the European Union, Austria, Canada, Denmark, Finland, Greece, Ireland, Italy, Japan, Korea, Luxembourg, Netherlands, Portugal, Sweden, Switzerland, TaipeiChina and the UK.

No. of assisted

enterprises to report an

increase in turnover

71% 47% 67%

No. of assisted

enterprises to report an

increase in pre-tax profit

75% 29% 48%

No. of assisted

enterprises to report an

increase in employment

38% 20% 29%

Business Advisory Services (BAS)

� Objectives:

• Achieve enterprise change in potentially viable MSMEs

• Develop sustainable infrastructures of local business advisory services

� BAS operates on both the demand and supply side:

• Stimulates demand by raising the understanding of MSMEs of the potential benefits of using external consultants

• Increases supply and quality of local advisory services

� BAS projects:

• MSMEs provided with a grant to cover 25-75% of consultants’ costs or max. € 10,000 (Grant only paid on successful completion of project)

• Market development activities including MSME and consultancy training; support to relevant institutions; visibility and dissemination activities

BAS Project types

� Market performance:• Market analysis• Business planning• Feasibility studies

� Management effectiveness:• Financial management / MIS• Reorganisation / restructuring• Reorganisation / restructuring

� Cost reduction:• Computerised manufacturing systems• Engineering studies• Product management

� Quality management:• ISO certification• Product management

� Environmental management:• Energy efficiency• Environmental impact assessments

BAS Project cycle

1. Project screening and selection

2. Consultant selection (Enterprise)

3. Project TOR development, grant agreement with enterprise3. Project TOR development, grant agreement with enterprise

4. Project implementation, monitored by BAS team

5. Project completion and grant disbursement upon successful

project completion

6. Project Evaluation 12 months after disbursement

BAS in Serbia

Achievements

Inception – 2006

Number of projects 290, of

which 36 On-going,

66 Completed and 188

Feasibility Studies

4%Reorganisation/Restructu

ring

15%Environment

5%

66 Completed and 188

Evaluated

Over 150 Consultants engaged

Number of Market Development

Activities (MDA) 11

35% of enterprises secured an

external investment

12

To Introduce Quality

Management &

Certification

40%

Energy efficiency

1%

Computerised

Financial/Management

Information System

20%

Development Planning

6%

Market Analysis &

Planning

9%

BAS Serbia funding

2,000,000

2,500,000

3,000,000

EBRD Shareholder Special

Fund (ESSF) EBSF-2011-07-

100F

EU Private Sector Support

13

1

0

500,000

1,000,000

1,500,000

EU Private Sector Support

Facility for the Western

Balkans ECWB-2011-06-14F

Netherlands NEBS-2007-12-

01F

Taipei China TWTC-2011-08-

17F

Established in 2002, Knjazevac

Activity:Wood industry -Pressed plywood chair seats production

Challenges:

BAS Project case study – SCS Plus KnjazevacImplementation of Computerised Management and Financial System

Challenges:

Difficulties in monitoring the production easily, accepting the orders, follow the stocks, plan the future production, submit the salaries and work orders

Difficulties in financial and operational management of all business activities

BAS Support

BAS support in the project was crucial in providing financial support and facilitating the consultancy project for the implementation of a Computerised Management and Financial System

14

BAS Project case study – SCS PlusImplementation of Computerised Management and Financial System

Project outcome

� Improved management procedures and decision making process

� Generation in real time of company financial reports such as on orders, sales, production flow etc for each of the business activities

� Information on costs and profitability for each of products

� Increased staff efficiency and performance quality

� Significant decrease of costs

BAS - DEVELOPING CAPACITY OF UPKS (ASSOCIATON OF MANAGEMENT CONSULTANTS OF SERBIA) FOR CMC PROGRAMME

DELIVERY

Serbian Association of Management Consultants (UPKS) have initiated introduction of CMC (Certified Management Consultant) programme in Serbia in 2010 and Croatian Association of Management Consultants – HUPS was chosen as a partner in this process.

BAS supported second part of this project - building of internal capacities of UPKS that will enable UPKS to maintain CMC programme in the future and consequently lead to UPKS sustainability.

Participants: 14 CMC certified consultants

Project included: Project included:

1. Establishing UPKS procedures for CMC certification procedure according to the ICMCI Competence Framework and Body of Knowledge

2. Preparation and delivery of training of trainers, mentors and assessors for 14 local consultants

3. Certification process for additional eight trained consultants that resulted with two more local consultants being certified for CMC standard.

Outputs:

-UPKS procedures according to the ICMCI defined,

-UPKS received confirmation from ICMC that it is accepted and Serbian Association is now member of this reputable international organisation.

BAS in Croatia

� Since 2001

� Funded by European Union, Luxembourg, UK, Austria, Central European Initiative, ESSF

� 471 BAS projects, 259 consultants engaged

14 Market Development Activities� 14 Market Development Activities

Highlights:

� A training on IPPC standards for companies and consultants, in cooperation with the Ministry for Environment

� Series of trainings for Croatian winemakers on technology and organic winemaking

� Study tour to Poland for Croatian consultants

BAS in Bosnia and Herzegovina

� Since 2001

� Funded by the European Union, the Netherlands, Luxembourg, United Kingdom, Portugal, Central European Initiative, EBRD

� 530 BAS projects, 258 consultants engaged

20 Market Development Activities� 20 Market Development Activities

Highlights:

� Development of a Voucher Scheme for the Republika Srpska SME Development Agency to strengthen the infrastructure of MSME support

� Trainings on waste management, environment management standards for consultants and SMEs

Women in Business in Western Balkans

� The programme aims to support at least 90 projects in 3 countries with BAS grants

� Train the Trainers scheme will prepare at least 18 experts who will then deliver practical, custom-designed trainings for start-up entrepreneurs

� A minimum of 150 women entrepreneurs (or willing to start their own � A minimum of 150 women entrepreneurs (or willing to start their own business) will be trained through 9 workshops (3 per country)

� 15 women per country will participate in mentoring programmes

� In 2013 BAS will deliver up to 12 specialized trainings for women-owned businesses on topics identified by the owners as priorities

� Facilitating access to finance is achieved through partnership with financial institutions – Opportunity Banka in Serbia, PBZ and HBOR in Croatia, MI BOSPO in Bosnia and Herzegovina

Support to Women in Business in Western Balkans – a new programme

1.Projects with start-ups and existing women owned and

managed businesses featuring higher grant

percentages for start ups and MSMEs in rural areas

2. Workshops, courses, business training for female

entrepreneurs - start-ups and existing businesses in

areas such as business planning, quality

management and certification, sales and marketing,

Financed by Luxembourg, Taipei China and EBRD Shareholders Special Fund

management and certification, sales and marketing,

financial management

3. Access to finance by establishing linkages with

EBRD partner and other local relevant financial

intermediaries

4. Visibility and dissemination activities of best practices and success stories of women in business

5. Mentoring by matching women entrepreneurs with successful women in business leaders

6. Business matching trips to set up women entrepreneurs with potential business partners, introducing new technologies and knowledge transfer

7. Networking by establishing partnerships with local stakeholders, and organizing events and networking opportunities for women entrepreneurs

ICT- A business matching trip to Taipei China (June 2012)

� Participants: Active senior-level executives from a leading ICT sector (5 ICT leaders per country)

� The objective: Explore business matching opportunities, create linkages with other companies in the same industry, exchange knowledge and foster potential import and export links and franchising opportunities.

� The trip consists of:

- Visit to COMPUTEX, one of the biggest ICT exhibition in the world- Visit to COMPUTEX, one of the biggest ICT exhibition in the world

- Accessing new products and latest development of ICT technology

- Exploiting the business opportunities for cooperation and forming partnerships with leading Taipei China ICT companies

- Visit leading Taipei China ICT companies

- Emulating the Taipei China public-private partnership in ICT

- Transferring knowledge of Taipei China’s innovation and ICT strategies to participants to encourage information sharing to the delegate’s country authorities.

- Professional lecture/workshop on business practice for managing relations with major international vendors, and government role in supporting ICT development

SBS Impact

� 18 years in operation, continually expanding since 1993

� Covering 31 countries historically; currently operating in over 20 countries

across the EBRD region

� 1,870 EGP and 10,200 BAS projects with individual enterprise to date

� Utilizing over 1,500 advisors from 60 different nationalities

� Over 1,600 active local consultants ready to be engaged in projects

> 60% of enterprises are located outside the main cities� > 60% of enterprises are located outside the main cities

� 18% average increase in turnover after EGP projects and 33% after BAS

projects

� 29% average increase in productivity after EGP projects and 15% after BAS

projects

Investment Linkages

� Over 25% of BAS supported enterprises secure external financing after a

BAS project

� In 2010, 23 SBS clients received €106m from EBRD investments. A further

18 SBS clients have reached concept review stage, amounting to €59m.22

Thank you!

www.ebrd.com/sbs