EBRD Small Business Support Building stronger businesses EBRD Small 1

Private sector development through a multi-tier approach Development of a competitive and innovation-driven private sector economy Financial support through loans and equity financing through LEF SME credit lines through EBRD partner Banks Technical assistance through SBS (Policy Dialogue)

EBRD financing options for MSMEs Indirectly: via local partner financial intermediaries FIs and through many FI MSME dedicated facilities, deployed across all countries. In Western Balkans FI partners include Banka Intesa, UniCredit, Societe General, Raiffeisen, Opportunity Banka, Erste Banka etc. Semi-indirectly: via co-financing mechanisms (e.g., the Medium-sized Co-Financing Facility (MCFF), available in ETCs Directly: through several facilities created mostly in the context of the strategic ETC and WB Initiatives for direct “tailor-made” financing: In the Western Balkans EBRD operates the Local Enterprise Facility (LEF) and the WB SE Direct Financing Facility (WeBSEDFF) 18/09/2018

LEF - instrument of direct financing for local enterprises The Local Enterprise Facility (LEF) was established in 2006 jointly by the EBRD and the Italian Government. A delegated facility for equity, quasi-equity investments and tailor-made debt financing. Investments encompass the Western Balkans, Turkey, Bulgaria and Romania, An extension to the Southern- and Eastern Mediterranean region is currently processed Private equity funds 3

Local Enterprise Facility (LEF) A delegated facility for equity, quasi-equity investments and tailor-made debt financing Developed to support financing needs of dynamic local enterprises € 400 million of capital provided jointly by the EBRD (€ 380 million) and the Italian government (€ 20 million) Total cumulative commitment of € 277 million, out of which € 200 million (72%) disbursed, through the total of 108 projects to date Immediate pipeline (H2 2013) - € 229.6 million in 45 projects Project Composition Number of LEF Deals in Western Balkans

LEF Investment Criteria Eligible investments: expansion, restructuring or acquisitions of existing private businesses Eligible sectors: a wide range of sectors, with only few exceptions (weapons, liquors and tobacco). All investments must be in line with sound environmental principles Size of investments: LEF individual investment in the form of debt, equity or quasi equity in the amount of up to € 10 million. Minimum individual investment is € 1 million Time horizon: a period from 3 up to 8 years

SME Financing Provided Through Credit Lines to Local Banks Improve access to longer term finance for private enterprises for urgent capital investments, as well as working capital; Facilitate upgrades of SME operations towards EU production standards; Promote sustainability and competitiveness of the SME sector through crisis and beyond; Capacity building at the level of participating banks to assess and finance environmental investments. Who EBRD works with in Serbia Banca Intesa Beograd Komercijalna Banka Societe Generale Unicredit Bank Serbia Alpha Bank Serbia Erste Bank Serbia Cacanska Banka

Business know how in addition to financing EBRD’s Small Business Support (SBS) team has been helping SMEs since 1993 SBS works on a not-for-profit basis with donor funding from 24 countries, with two instruments: the Enterprise Growth Programme (EGP) and Business Advisory Services (BAS) SBS promotes good management in small businesses in the EBRD region, by providing direct assistance to individual enterprises, helping them to grow their businesses and become more competitive Market and sector development activities strengthen the local consultancy markets and disseminate sector best practices SBS at a glance Over €200m donor funding 1,800+ EGP projects 12,500+ BAS projects Nearly 800 market development activities Active in 25 countries

EGP Brings International Know How BAS Fosters Local Expertise EGP operates on a cost-sharing basis (minimum 10% of client contribution), utilising international consultants with over 15 years of experience in the specific industry. EGP focuses on substantial managerial and structural changes within companies, focusing on financial management, strengthening organisation, management, operations, sales and marketing. Project implementation period is between 12 and 18 months BAS assists individual enterprises to engage local consultants on a cost sharing basis (25 -75% of the total net project cost, capped at €10,000) BAS supports projects of market analysis and planning, feasibility studies, business plans, information systems implementation, quality standards introduction, energy efficiency studies etc. Project implementation period is between 2 and 6 months BAS develops infrastructure of local consultants through different trainings, roundtables, visibility events and workshops. Private equity funds 3

SBS eligibility criteria EGP BAS Ownership Majority privately- and domestically-owned Size Usually between 50 – 1000 employees, turnover up to €50 million Up to 250 employees (target group up to 50 employees) Industry All sectors except banking and financial services, military products or services, gambling, tobacco and liquor. Viability Acceptable debt structure depending on the industry and business type, sound accounting standards, ability to demonstrate potential growth Integrity Enterprise and management must be credible and respectable Maturity Operate from a minimum of 2 years Management attitude Management must be open and committed to achieve objectives and participation in the project costs. Cost share Between 0% and 50% of total project cost (€50.000 on average), dependent on size and other investments Between 25% and 75% of total project cost (€9.700 on average), dependent on size, location and type of service

SBS helps its clients in both pre and post investment stages to make companies creditworthy and suitable for further investment SBS clients in the Western Balkans received a total of €370 million of EBRD investments, both in debt and equity SBS clients often obtain non-EBRD financing, such as through local commercial banks. In 2012, 15% of SBS enterprises received non- EBRD investments with a total value of €84 million SBS closely cooperates with the EBRD LEF, through improving financial reporting and accounting standards Both a BAS and EGP client, a beverage manufacturer in Skopje received € 1 million from Stopanska Banka, and € 2 million from Komercijalna Banka In total (not just 2012): 25% of SBS clients secured external finance (€800+ million) General points on pre and post investment support Stats

SMEs using external finance - barriers Access to different financing instruments offering more favourable terms – specific credit lines, business angels, development funds Misunderstanding that banks are partners and support in developing SME’s business Lack of management’s finance knowledge and skills to do business with FI

SBS Serbia – with EU support

“Support to SME Development in Serbia” Funded by €3.48 million from the EU IPA Co-financed and implemented by the EBRD In partnership with the Ministry of Economy Programme Objectives: Enhance the competitiveness and productivity of the Serbian private sector economy Main activities: Direct enterprise assistance through SBS over a period of 36 months Trainings for individual entrepreneurs and local consultants in priority areas Expected results: A minimum of 210 BAS projects A minimum of 30 EGP projects A minimum of 90 entrepreneurs trained A minimum of 60 consultants trained

Small Business Support European Bank for Reconstruction and Development Blue Centre Serbia B1/VI Spanskih Boraca 3 11070 Novi Beograd Tel: +381 11 2120642 basserbia@ebrd.com www.ebrd.com/sbs 15