Small and Medium-sized Enterprise without Access to Cheap Financial Resources

In the framework of the Global Entrepreneurship Week - 2016 organized by USAID with financial support from the US government a conference on SME Development in Azerbaijan was held in Baku on November 18.

The event was organized by the partner of USAID, Foundation for Assistance to Market Economy and attended by MPs, representatives of government agencies, international organizations, embassies, NGOs and think tanks.

According to the head of the Foundation for Assistance to Market Economy, Sabit Bagirov, to support small and medium-sized enterprise (SME) it is important to maintain dialogue and partnership of the government with the private sector.

A member of the Milli Majlis committee on economic policy Vahid Ahmadov said the Azerbaijani parliament passed 80 laws to ensure favorable conditions for the development of SME.

In turn, the US Ambassador to Azerbaijan Robert Cekuta noted that many people dream of creating a personal business, and opening a business, play an important role in economic development.

The Ambassador welcomed the steps of the government for the development of entrepreneurship. “The US government is ready to partnership with Azerbaijan for the stability and effectiveness of the reforms,” ​​he said.

The head of a department in the Economy Ministry Elchin Ibrahimov told about the measures of the authorities to improve the environment for SME: a two-year moratorium for inspections of businesses except for tax audit. As a result, this year the number of inspections has been 1,000 times less than it was last year.

In addition, from 59 to 37 reduced the number of licensed activities. Moreover, these licenses are issued by ASAN.

To encourage investment in the regions a seven-year tax holiday for businesses has been announced.

The head of the public legal entity ABAD (Simplified Support for Family Business), Elchin Shirinov said ABAD was created to support family business in production planning, providing consulting, marketing and financial services, etc. In particular, it provides assistance to family farmers in promoting their goods in the market.

An expert of the Center to Promote Economic Initiatives Samir Aliyev noted that today the main problem of entrepreneurs is the lack of cheap finance. SME is almost unable to raise loans. The volume of lending the economy in 2016, according to official figures, fell by 23%, but in reality the situation is even worse.

On the other hand, the Central Bank of Azerbaijan has reduced monetary support for the economy. The surplus in the trade balance fell to 237 million dollars and by the end of the year a deficit is not excluded.

The volume of bad loans is 20%, and in some cases 50%.

Among the recommendations Aliyev called support only to SME entrepreneurs by the National Enterprise Support Fund, the creation of specialized banks - investment, agribusiness, export, and others.

Global Entrepreneurship Week - 2016 is held in 160 countries on November 14-20.    -06D--