Enhancing smE financing in acp countries - ACP Business Climate

7
Recommendations
The Recommendations resulting from this study contains
various proposed steps to be taken according to the
responsible party, i.e.:
7.1. Recommendations to the ACP
Countries and their public institutions
A participant at the 13-14 October 2011 ACP High-Level
Meeting stated that: “Governments need to come to the table”.
Besides broader improvements in the macro-economic
framework and financial sector infrastructure, the following
areas lend themselves to priority action.
1. Create (or improve) credit bureaus
2. Improve collateral and insolvency regimes
3. Adapt banking regulatory/supervisory regimes
4. Facilitate commercial dispute settlement and consider
the use of Alternative Dispute Resolution mechanisms
(ADRs)
7.2. Recommendations to the EIB and the
European Union
1. Recommendation retained as Strategic Recommendation
– The European Union (EU)’s PSD activities should place
SME capacity building very high on their priorities in
the ACP, and vastly expand capacity building for SMEs
in the areas described in Chapter VI, Section 6.1 above,
by creating private sector managed structures in
ACP countries or regions which can deliver necessary
technical assistance. Such capacity building efforts are
by necessity largely grant-based, though beneficiary
matching funding might be appropriate.
Capacity building, a precondition for many SMEs to
even solicit finance, is considered by many authoritative
studies as the key step to increase SME access to finance,
as well as to support the transition from the informal to
the formal sector.
Delivery channels for capacity building should be grantbased,
and handled by private sector actors with the
assistance of banks. Country visits strongly yielded this
view, but foremost, the participants at the two High-
Level ACP Meetings of 15 July and 13-14 October 2011
forcefully insisted that the issue of the delivery vehicle,
which must be private sector-based, be made the core
element of this particular .
2. Recommendation retained as Strategic Recommendation
– EU grant funding should support the EIB’s efforts to
develop new guarantee and risk-sharing instruments.
Blending should be expanded from grant and loan
blending to other instruments. Blending of EU grant
funding with EIB instruments should be made a priority
for the EU in the ACP countries.
3. EU grant funding should support EIB/IF pre-project
country work, such as prior institutional restructuring,
SME market surveys and deeper involvement of local
actors (e.g., Employers’ Federations, or Chambers of
Commerce) in analysing the SME fabric and needs.
4. This can be done with the support of EU grant funding
for non-project related work, or by setting up Trust Funds.
The EIB/IF does not have access to such funding (unlike
e.g. the FEMIP trust Fund for the Mediterranean Region).
Enhancing SME financing in ACP countries
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