Tag Archives: SME

The ‎EU4BUSINESS‬ Week kicked off on Monday 22 February. The week was full of events organised by the EU Delegation to Armenia and its partners. Each day expert presentations, round tables, or discussions were held with international experts and members of the business community.
During the EU4BUSINESS week, the “SME Policy Index: Eastern Partner Countries 2016” was presented. The project co-funded by the EU, OECD, ETF and EBRD, was introduced by the EU Ambassador, and the Armenian First Deputy Minister of Economy, on 23 February 2016.
ARS_6494The Head of the EU Delegation to Armenia, Ambassador Świtalski, underlined that, for the EU in Armenia, the main priority is to support private business: ‘Small- and medium-sized enterprises (SMEs) are considered by us to potentially be the main engine for growth in Armenia and, at the same time, one of the main untapped potentials in Armenia. If you consider the level of entrepreneurship among Armenians, their intellectual capacity and creativity, and their involvement in SMEs – a lot of benefits can be brought to Armenia’s economy. These are difficult times in Armenia – there are many challenges to economic development. Therefore, it is strategically important that the EU works together with the Armenian government and other international organisations to support the development of SMEs. This index will act as a point of reference for the government to check whether the direction in which the country is going is right. We know that Armenia has made good progress in many areas. The other issue is whether this progress is meeting the expectations of Armenian people, in particular businessmen. Indeed, there is a perception gap: indexes are good as they show a good picture, but when you go and ask people, in particular young people who want to start new business, they say it could be better. I would agree. Therefore, lots still needs to be done. I am sure that together we can make progress, because the international community and organisations have a clear interest in a positive SME index for Armenia. Why is that? Well, when the foreign investors see that the SME index looks secure, they will feel more comfortable investing’.
ARS_6455During the event, the Armenian Deputy Minister of Economy, Garegin Melkonyan presented the SME policy index and its importance for Armenia: ‘The assessment monitors implementation progress for ten principles of the Small Business Act (SBA) for Europe, and measures convergence towards EU practices and standards. The SBA principles are designed to create a level-playing field for SMEs and to foster entrepreneurship and competitiveness. The SBA assessment provides policy makers with a detailed overview of SME policy performance and recommends improvements within each policy area. Moreover, it identifies strengths and weaknesses in the design, implementation, monitoring and evaluation of policies and support programmes, while comparing country progress with previous assessments. The 2016 assessment reveals significant, albeit uneven, progress. There are many directions and suggestions that should be implemented in Armenia, including SME development, which is key to strengthening economic competitiveness in Armenia. There are also strong and weak sides of SMEs in Armenia, which should be taken into consideration’.
After the opening remarks, Daniel Quadbeck, the Project Manager, introduced the SBA results for Eastern Partner countries, presented key messages of the assessment, and made suggestions for the future.

In a continuing effort to contribute to the development of sustainable infrastructure for local business advisory services, the European Bank for Reconstruction and Development (EBRD) SME Finance and Development Group in Armenia, in collaboration with the Head of the Yerevan Resident Office, initiated the second tailor-made course on “Financial Investment Preparation”. This initiative again became possible through the European Union, the EBRD’s core donor in advisory support activities to support the development of sustainable private sector in Armenia, which brings international best practice and local know-how to local SMEs. During the press conference, which took place on 14 October, EBRD and EU representatives talked aboout the courses that will take place on 15-16 October in Yerevan.
The overall objective of the “Financial Investment Preparation” course is to increase demand for local consultancy services to prepare local enterprises for the various stages of financial investment and to increase shareholder value as a result of obtaining funding within the engagement spectrum. It will reflect the latest developments in financial products and instruments, and will facilitate the transfer of knowledge and skills to local consultants.
ARS_3652Ludovic Ciechanowski, International Aid/Cooperation Officer in the EU Delegation in Armena, talked about the importance of EU’s support to SME development: ‘We are going to implement many programmes here in Armenia; all of them will be possible with our partners support. Investment is key in our cooperation with Armenia – this week we will launch a twinning project to support this sector further. For us it is very important to show that we stand here to support SMEs’.
ARS_3643Mark Davis, the Head of the Yerevan Resident Office, went into detail about what was required on the Armenian side: ‘More modern business processes, such as strong corporate governance, transparency, environmental and social policies, and investor relations are key in attracting junior forms of capital, including mezzanine and equity investments, as well as market instruments such as bonds and listed equity, which can provide the critical long-term capital firms need to grow and prosper’.
Taking into consideration the recent positive experience in the EU’s “SME Flagship Initiative”, the EBRD again invited Gavin Ryan to deliver the “Financial Investment Preparation” course to local consultants. Ryan is an international expert with over 25 years’ experience in the financial industry and private equity markets, and will share his expertise of exposing local SMEs to investment opportunities, allowing them to grow and become genuine catalysts for local economies.
Ryan gave more details on the course: ‘The training course is a practical one, based upon relevant experiences and cases from Central and Eastern European countries. We aim to equip SMEs and their consultants with the necessary skills to secure the financial resources for growth. This we will do by exploring equity and quasi-equity products on the marketplace. We will look at the positive actions an SME can take to position itself, such as corporate governance upgrading and good business planning’.

Two handbooks entitled Linking multinational enterprises and Armenian SMEs in the case of the construction materials sector and Connecting Armenian SMEs to global values chains: The case of agribusiness were launched at an event devoted to “Supporting SME competitiveness in the Eastern Partner countries: Focus on Armenia” held on 4 March 2015. Speakers at the event included Dirk Lorenz, Acting Head of the EU Delegation to Armenia, Garagin Melkonyan, the Armenian First Deputy Minister of Economy, Gregory Leconte, Project Manager of the Organisation for Economic Cooperation and Development’s (OECD) “Eurasia Competitiveness” programme, and Cornelia Skokov, GIZ Team Leader.
Armenia was included in the OECD “Eurasia Competitiveness” programme in December 2013, after which working group meetings and roundtables were held. The publication and presentation of these handbooks is proof of the work carried out by SME competitiveness experts and working groups. The titles of the handbooks call for action plans for reforms that may connect Armenian SMEs in the fields of agribusiness and construction materials to partners in the EU and worldwide. “Eurasia Competitiveness” is being implemented by the OECD in partnership with GIZ, and is co-financed by the European Union.
ARS_2863Lorenz emphasised the importance of the project and expressed confidence that the results of cooperation will contribute to the improvement of the business environment in Armenia: “We think that handbooks are instrumental when it comes to further paving the way for SME internationalisation in the country. It is crucial to take concrete actions that do not just remain on paper, so that SMEs can feel the concrete results and improvements. In this regard, we are looking forward – the European Union will receive regular updates from the ministry on how these actions are being performed and implemented”.
Melkonyan introduced the role of the Ministry and other organisations involved in the programme, talking about its implementation: “Two main directions were chosen: construction materials and agribusiness. Extensive work has been carried out to study these directions, to raise problems, and to develop proposals – all of this has been reflected in the reports. Several working groups have investigated these areas, including experts from international, governmental and non-governmental organisations, as well as the private sector. We wanted to involve all interested parties in this process. Our goal is to attract investors to the construction materials sector and, as a result, improve production capacity. The main objective in agribusiness is to promote the development and internationalisation of SMEs to be able to increase export volumes”.
ARS_2805Leconte summarised the key recommendations of the published handbooks: “There are some challenges and recommendations to connect Armenian SMEs to agribusiness global value chains. Some of those challenges include little knowledge of foreign markets, lack of efficient export promotion, and poor export-related business skills. In the handbooks you can find recommendations for such cases. For example, experts recommend improving export promotion efforts and disseminating export skills. There has been a lot of research done in this area, and these handbooks will be very useful for relevant stakeholders”.

On 22 October the European Union and the European Bank for Reconstruction and Development (EBRD) organised a meeting concerning the ways of supporting local small- and medium-sized enterprises (SMEs) to have access to finance and know-how.
The Head of Cooperation of the EU Delegation to Armenia, Hoa-Binh Adjemian, stated that the development of SMEs was one of the EU’s main priorities in cooperation with countries like Armenia: ‘The EU’s Small Business Support Programmes, which have made this event possible, is specifically aimed at promoting and improving the work of SMEs here. This is only one of several projects and facilities that are available to Eastern Partnership countries thanks to the European Union’. Mark Davis, Head of the EBRD Yerevan Office, said: ‘It is necessary to develop a viable private sector in Armenia that will enhance the supply chain and exports’. To ensure the development of a strong private sector, the EBRD in Armenia is providing both finance and know-how to SMEs, including business advice in how to access finance.
Under the EU SME Flagship Initiative, the EBRD has invited Gavin Ryan, an international expert with over 25 years’ experience in the financial industry and private equity markets, to share his expertise on linking local SMEs to investment opportunities for growth and the possibility of becoming genuine catalysts for local economies. IMG_1354
Ryan delivered a course on management and investor factsheet preparation for SMEs to financial advisers on 23-24 October, during which he stated: ‘Both countries and companies are competing for the attention of investors. A quality factsheet should stand out, capture the attention of investors and make them curious to know more. It will do this only by both containing credible information and by presenting it well. I hope my course will help financial advisers to achieve this objective and thus better serve their clients’.

On 7 October a working meeting on the “Promotion of SMEs’ competitiveness in Eastern Partner countries: Armenia” project took place in Yerevan. The Head of Political Section of the EU Delegation to Armenia, Dirk Lorenz, and the Armenian First Deputy Minister of Economy, Garegin Melkonyan, and the Head of the “Eurasia” competitiveness project, Gregory Lecomte, participated in the event.

Armenia was included in the reform research programme of the Organisation for Economic Cooperation and Development (OECD) “Eurasian Competitiveness” project in December 2013. This involved research on raising competitiveness in the local economy and now, under the new stage of the project, two working groups studying possible reforms.

Participants at the meeting discussed the work being carried out by the two working groups and the reports they had written. Additionally, further perspectives for development were explored.

On 26-27 November, the second roundtable on the “Eurasian Competitiveness” project will take place. Armenia will be represented by its Ministry of Economy. The rountable will synthesise current results, and examine the research undertaken. Independent experts will evaluate the results achieved and determine future plans. The implementation stage of the “Promotion of SMEs’ competitiveness in the Eastern Partner countries: Armenia” project will be launched in early 2015.

The project is implemented by OECD with the support of German Federal Enterprise for International Cooperation (GIZ), and funded by the European Union. Several experts from EU Member States (Germany, Italy, and the Czech Republic) have already visited Armenia to provide consultancy.