Financial Policies to Promote Small and Medium Enterprises through Microcredit and Credit Guarantee Schemes (Romania in cooperation with CEI)

The promotion of widespread entrepreneurship through the establishment of small and medium-sized enterprises (SMEs) was considered to be crucial for the transition to a market economy and the democratization of society in some SECI countries. SMEs were commonly accepted as indispensable to economic growth and as a source of sustainable development, and could secure job creation and self-employment in the SECI region.

Therefore this project aimed at facilitating the securing of capital which potential entrepreneurs need in order to obtain initial credit for starting their operations. The exchange of experiences and joint efforts of two or more countries in establishing credit schemes and providing credit guarantees could accelerate the process of promoting SMEs. The project involved governmental bodies dealing with entrepreneurship and employment, chambers of commerce, regional and local authorities, international and national financial institutions and the banking sector.

The Project Group has conducted a review of the existing national policies concerning financial services and microcredit guarantee schemes and has examined the development of relevant legislation and data on financial facilities in SECI countries based on a questionnaire worked out in cooperation with the EBRD. The group also conducted a study, “Best Practices for Financing SMEs” which evaluated existing experiences and results concerning microcredit schemes. The UNECE also established a network between SME focal points and financial intermediaries that can be found on the Internet.

The Project Group determined that the three essential things which need to be accomplished in the SECI region concerning the promotion of SMEs are: to improve the legal conditions and environment for SMEs in each SECI country; to assure against risks for private entrepreneurs; and to give access to credit through, for example, leasing.