Azernews.Az

By Leman Mammadova

New business support mechanisms are currently being applied to enhance the activities of the small and medium-sized enterprises (SMEs) in Azerbaijan.

Agency for the Development of SMEs, the Financial Market Supervisory Authority (FIMSA) and the Azerbaijan Banks Association (ABA) have signed a protocol of intent on mutual cooperation.

The documents says that FIMSA and АВА will create a joint platform for discussing the effectiveness of mechanisms used in private financial and credit institutions as well as the issues of state financial support to finance SMEs.

They will also explore the possibilities of applying innovative and alternative financing mechanisms based on international experience in financing SMEs, support SMEs for entering the securities markets and encourage the use of appropriate market instruments.

The parties will also implement educational measures to improve the financial literacy of SMEs in the regions as well as organize forums and round table discussions on the development of SMEs.

Speaking at the signing ceremony, the head of the Agency for the Development of SMEs Orkhan Mammadov noted that supporting the activities of SMEs and expanding their access to financial resources is a priority for the Agency.

In this regard, projects and activities that will be jointly implemented with the FIMSA and ABA are important for expanding access to financial resources of SMEs, holding joint discussions in this area and improving financial literacy, he said.

Ibrahim Alishov, Acting Chairman of the Executive Board of FIMSA, noted that the presidential decree on additional measures in connection with solving the issue of the individuals’ problem loans will provide banks with liquidity at the expense of cheap funds, which, in turn, will help SMEs to get access to cheap financial resources and revitalize the economy.

Stressing the importance of the signing of the protocol of intent, ABA President Zakir Nuriyev said that a new platform will be created that will improve existing mechanisms providing financial support for SMEs from both the government and credit organizations.

Small and medium-sized businesses play an important role in development of the country's economy. Development of SMEs leads to the growth of entrepreneurship which is one of the priority directions of Azerbaijan’s economic policy.

The Agency for the Development of SMEs was established in 2017 to ensure the consistency of reforms, as well as the improvement of the business regulation system and the application of effective coordination, enhancement of the role and competitiveness of small and medium-sized businesses in the country's economy, and the compliance of the management system of this sphere with modern requirements.

The goals of the Agency also include the creation of favorable conditions for the development of SMEs in the regions and the attraction of local and foreign investments to this area.

Simplifying access to financial resources for SMEs is an important aspect of the agency’s activities, as the main part of the appeals involves financing. The online platform to be created by the Agency will provide an opportunity for online communication between financial institutions and entrepreneurs. Entrepreneurs will have the opportunity to present their projects to all interested parties online, and this will also minimize the loss of time.

The share of SMEs in Azerbaijan’s foreign trade is planned to increase to 40 percent after 2025.

Recently, a new office of “Friends of Small and Medium Enterprises” network opened in Azerbaijan’s Sumgayit.

Friends of SMEs,which was formed by the Agency, is a mechanism that helps to identify and implement initiatives of small and medium-sized enterprises, realize their potential, provide them with support at all stages of their development and protect the rights of entrepreneurs.

Currently, “Friends of SMEs” operate in 11 regions and cities around the country.

Support for the development of small and medium-sized businesses is one of the most remarkable contributions to the economic reforms carried out in the country.

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Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888

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