Presentation by Ms. Charlotte Ruhe, Director, SME Finance and Development, European Bank for Reconstruction and Development - SME financing in the EU enlargement region, at the Launch of the SME Policy Index for the Western Balkans and Turkey 2016. 28 April 2016, OECD, Paris, France.

1. Finance and Advice for Small Businesses
SME Financing in the EU enlargement countries
Charlotte Ruhe, Head, SME Finance and Development, EBRD
Launch of the SME Policy Index for the Western Balkans and Turkey 2016
Paris, April 2016

2. Finance and Advice for Small Businesses
Setting the scene… SME access to finance
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Informalsector
Accesstofinance
Electricity
Corruption
Taxadmin.
Politicalinstability
Workforceskills
Crime
Transport
Accesstoland
Customs&trade
Labourregulations
Courts
Telecoms
Businesslicensing
Western Balkans (unweighted average)
Turkey
• Access to Finance 2nd most severely
perceived obstacle to business in the WB,
5th most severe obstacle inTurkey
• Banks are very liquid, but in light of high
NPL levels (esp. in the WBs), banks are
very risk averse
• Lack of creditworthy borrowers
• Bank lending remains expensive, and
especially long-term financing is difficult
to access
• Non-bank finance virtually non-existent
• Financial inclusion remains a key
challenge
BEEPS 2012, perceived business obstacles (0-5)

3. Finance and Advice for Small Businesses
• Limited awareness of SMEs about the variety of financing opportunities available in
addition to standard bank-lending.
• Incomplete legal and regulatory framework that ensures investors’ confidence and
reduces legal uncertainties.
• Need for local buy-in and support to market-friendly incentives to increase lending
appetite of banks.
• Lack of investment readiness of SMEs, including sound financial management and
transparency.
Additional challenges

4. Finance and Advice for Small Businesses
The EBRD Small Business Initiative
Financing
through financial
institutions
Direct financing
for small
business
Policy dialogue
Co-financing
with financial
institutions
Business advice
• 200+ partner
financial
institutions
• €1+ billion of
finance each year
• Benefitting
hundreds of
thousands of
small businesses
• Providing direct
financing for
small businesses,
coupled with
business advice
• Instilling higher
standards of
corporate
governance and
financial
transparency
• Taking targeted
policy actions
alongside our
investments
• Engaging
effectively with
policy-makers
across our region
• Lessening the
risk of financing
small businesses
• Helping partner
financing
institutions to
make their
money go further
• Providing
business advice
• Ranging from
strategy to
operations,
financial
reporting, energy
efficiency and
much more.

5. Finance and Advice for Small Businesses
 Almost 55,000 SMEs reached annually inTurkey and theWestern Balkans
 SME credit lines channelled through partner financial institutions to provide long-
term financing (EUR 1.8 bn inTurkey and EUR 1.1 bn in the Western Balkans)
 Facilities and integrated programmes targeted sub-segments in agribusiness, energy
efficiency, trade finance and competitiveness (planned)
 Dedicated SME instruments for debt, equity and quasi-equity investments
 Advice for Small Businesses activities to improve competitiveness in enterprises at
pre- and post-investment stage (over 340 SMEs and 4330 SMEs assisted inTurkey and
theWestern Balkans)
 Targeted policy dialogue to strengthen financial sector legislation
 Close coordination with partner organisations under the multi-donorWestern Balkans
Enterprise Development and Innovation Facility, EDIF
EBRD response in facts and figures

6. Finance and Advice for Small Businesses
• Strong focus of the EBRD on financial inclusion, with a view to decrease regional
disparities and increase access to finance for underserved groups such as women
entrepreneurs and refugee-impacted communities
 Dedicated integrated product to close the gender inclusion gap through the EBRD’s
flagship Women in Business Programme
 EUR 175 mn in credit lines for women-led enterprises inTurkey and EUR 20
mn in the Western Balkans to date
 Incentives to partner financial institutions to promote lending to new segment
 Business advice for women-led SMEs, training, mentoring and coaching
Technical assistance to partner financial institutions
 Strong focus on underserved regions, especially inTurkey, where activities largely
focus on the south and east regions
 A comprehensive refugee response package forTurkey and surrounding countries
currently under preparation
Financial inclusion

7. Finance and Advice for Small Businesses
Thank you