Video guest: Josephine Mwangi

October 2017
M T W T F S S
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5



SELECT_TAGS :
















Twitter

Follow the CTA Brussels Daily

 

twitter logo

 

facebook logo cta

Friday, 21 October 2011

High-level ACP-EU meeting on SME financing

On 15 July 2011, the ACP Secretariat had brought different stakeholders together for a workshop on SME financing. As a result of the meeting, the ACP Business Climate facility (BizClim) asked Investment Development Consultancy (IDC) to deliver a report about the challenges that SMEs in ACP countries are facing with regard to financing. On October 13-14, the High-level panel reconvened at the ACP House in Brussels to discuss the preliminary findings of the consultants’ report.

The meeting identified the cautiousness of commercial banks and development banks in ACP countries as the prime challenge in the financing of SMEs. Besides, SMEs often lack knowledge of how to acquire finance. To reduce the risks for the banks, the meeting discussed the option to make use of the EIB-managed Investment Facility among others.

Overall, participants agreed on the following main recommendations and mandated the Advisory Committee to finalise and operationalise these recommendations and craft a policy paper for submission to the ACP Secretariat by end November at the latest.

Main recommendations

  • Support capacity building focused on SME financing, which is paramount to their growth, requires grant funding that is private sector driven.
  • Greater proportion of financiers' funding, notably the EIB,  should address more forcefully the needs of the SME missing middle.
  • The EIB should enhance use of credit risk enhancement (mitigation) mechanisms, possibly with grant money, as well as its capital mobilisation ability.
  • Increase blending Grant money with DFIs’ money (e.g. European Union and EIB) in SME financing.
  • The EIB should operate pro-actively and achieve a larger reach, as well as wider country coverage.
  • Broaden the scope of grant money for project-related TA and other enhancement mechanisms and develop new blending instruments.

Other Recommendations for consideration by the Advisory Committee

  • Enhance partnering with private sector organisations when providing SME financing.
  • Engage Governments in partnerships with the private sector in SME financing and the creation of an enabling business climate.