Transcript Preparation for EU Entry by Developing Sustainable SME in

Bulgarian Small and Medium Enterprises Promotion Agency
PREPARATION FOR EU ENTRY BY
DEVELOPING SUSTAINABLE SME IN
BULGARIA
Bulgarian Small and Medium Enterprises Promotion Agency
Promotion of SMEs in Bulgaria:
•Encouragement of Start-ups
•Promotion of SME Development
•Increasing the SME Competitiveness
Bulgarian Small and Medium Enterprises Promotion Agency
SIGNIFICANCE OF THE SME SECTOR IN BULGARIA
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Total number of SMEs in 2003: 220 000
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Share of SMEs in Number of Enterprises: 99,1%
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Share in private sector employment: 60.3%
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Share in gross value added (GVA): 34%
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Share in foreign trade: 29%
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SME Direct Foreign Investment: 31%
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SME Share in total volume of commodity exchange: 39%
Bulgarian Small and Medium Enterprises Promotion Agency
SMEs by SECTORS
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Agriculture, fishery, forestry- 3.45%
Mining industry- 0.08%
Processing industry- 11.73%
Electricity, gas and water supply and
distribution - 0.07%
Construction -3.87%
Trade, car repairing and home
appliances - 50.64%
Hotels, boarding and catering - 9.42%
Transport, communications, travel
agencies - 7.59%
Financing, loans and insurance- 0.71%
Real estate operations, renting- 9.02%
Education- 0.67%
Health care and veterinary- 0.59%
Other operations and services- 2.06%
Bulgarian Small and Medium Enterprises Promotion Agency
NATIONAL STRATEGY ON SME
PROMOTION 2002-2006
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Simplification of administrative and legislative environment
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Financial environment improvement
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Innovations and technological development support
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Global market integration of SMEs
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Improvement of the access to information and services
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Provision of conditions for SME development in regional aspect
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Encouragement of the entrepreneur spirit and skills
Bulgarian Small and Medium Enterprises Promotion Agency
New Legislation on SME
Law on the amendment of the Law on Small and Medium Enterprises
was adopted by the National Assembly and came into force on 24 August 2004
Main objectives:
 Improvement of the co-ordination of the SME policy
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Full harmonisation of the definition for SME with 96/280/EU
recommendation: except for the ceilings for the annual turnover and the balance
sheet value with the SME Law the SME definition is completely aligned with the EC
Recommendation
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Creation of a mecanism to ensure the provision of a full package of
public services as close as possible to the enterpreneur: in compliance with
the Law a merger of SME Agency with the Trade Promotion Agency into an Executive
Agency for Small and Medium Enterprises Promotion with the Minister of Economy.
Bulgarian Small and Medium Enterprises Promotion Agency
The Law provides for two major groups of measures for
SME promotion:
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First major group: encouraging the creation of SME, under the
conditions and criteria of the law on State Aid when the latter is
applicable, through: creation of appropriate conditions for access to
capital, incl. provision of financing for SME, providing loan
guarantees for SME, development of projects;
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Second major group: promotion of development and increase of
competitiveness of SME through: development of projects, directed
towards promotion the distribution of technologies and innovations,
realization of projects for increase in competitiveness of enterprises
by increase in their productivity.
Bulgarian Small and Medium Enterprises Promotion Agency
Simplification of the legislative and administrative
environment
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Improvement of the business environment through streamlining of
the existing regulatory regimes
(licensing, permission and
registration) – under the implementation of recommendations approved
by the government to alleviate and eliminate some 192 regimes where 160
regimes are already in process of elimination or alleviation;
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The Law on Reduction of Administrative Regulation and
Administrative Control (adopted on 4 June 2003). The law stimulates
general systematized rules for implementation and reduction to a realistic
extent of the administrative regulation and control of economic activities
by introducing unified definitions for the types of regimes and setting up
clear limits of administration competences;
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Adoption of Conception (Decree 878/2002) for Improvement of
Administrative Service in the context of “one-desk service”
principle and basic model of the same principle.
Bulgarian Small and Medium Enterprises Promotion Agency
Access to finance
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The Project “Guarantee fund for microcrediting of investment
projects, credits for small companies starting family business and
economic activities of self-employed individuals is implemented by
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the Ministry of Labour and Social Policy. The maximum loan lended to
SME is increased from €7500 up to €10000 in the year 2004.
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Encouragement bank was incorporated as a fully state-owned
institution with the special purpose of providing in priority medium- and
long-term financing to the Bulgarian small and medium-sized enterprises
(SMEs) and of promoting Bulgarian export. The Bank’s loan portfolio is
formed entirely by loans granted to SMEs.
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An agreement for a guarantee line amounting to €7 million was
signed between the European Investment Fund (EIF) and the
Encouragement Bank. The credit line aim is to lend credits to SME on
relieved conditions. The amount has been increased to €21 million in 2004.
It should be pointed out that Encouragement Bank is the first financial
intermediary among all candidate countries for accession to the EU,
which was approved by the European Commission and EIF.
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Bulgarian Small and Medium Enterprises Promotion Agency
Access to finance (2)
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In 2004 the Ministry of Economy started the project “Competitive
Start-up Business Creation” (Project 100) with the support of
UNDP as a component of Project “Employment through business
support – JOBS”. The project has been implemented in four districts –
Shumen, Vidin, Silistra and Dobrich, which were determined by
particular criteria for unemployment level and standard of living. In
2005 the project except in the above four districts – Shumen, Vidin,
Silistra and Dobrich will be also implementing in four new districts Montana, Pazardjik, Sliven and Yambol;
Bulgarian Small and Medium Enterprises Promotion Agency
European Charter for Small Enterprises
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In June 2002 the European Council has adopted the European
Charter for Small Enterprises, which defines ten areas of actions in
order to establish a favourable environment for small and medium-sized
enterprises as: access to finance, getting more out of the single market,
enterprises’ technical capacity improvement etc.
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In April 2002 in Maribor, Slovenia, Bulgaria together with the rest
of the candidate countries has joined the Charter and expressed its
interest to participate in the reporting process. The process of reporting is
a tool for evaluation of the progress achieved according to the Charter
and dissemination of the good practices. The Agency for Small and
Medium-sized Enterprises was the coordinator of the Bulgarian Charter
reports preparation. The final report 2005 shall be presented to the
European Commission in September 2005.
Bulgarian Small and Medium Enterprises Promotion Agency
Multiannual Programme for Enterprise and
Entrepreneurship, in particular for SMEs (2001-2005)
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The Council of Ministers of Bulgaria adopted a Decision (№185/1 April
2002) for the participation of Bulgaria in the Multiannual Programme
and appointed the Agency for Small and Medium-sized Enterprises as a
National coordinator for the Multiannual Programme since the main
programme’s objectives continues to be the SMEs support;
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Bulgaria takes part in EC Multiannual Programme through BEST
initiative (Business Environment Simplification Task Force), which aims
to compare the business environments of the member-countries and
candidate-countries in order to outline the best practices;
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Providing better and faster access of business to services, programmes
and nets of EU and improving their coordination is realized through the
net of 8 Bulgarian Euro-Info Centres Network, financed by the
Multiannual programme. ( Bulgarian Euro Info Centres in Sofia, Plovdiv,
Stara Zagora, Yambol, Sandanski, Rousse, Dobrich and Vratsa).
Bulgarian Small and Medium Enterprises Promotion Agency
Global market integration of SME
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Bulgarian SMEs Competitiveness PHARE Project started its
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The project’s objectives, i.e. improvement of the competitiveness of
the Bulgarian enterprises from the production sector and preparing
implementation by the beginning of 2005. Project’s purpose is the
promotion of sustainable development of the Bulgarian enterprises and
improvement of their competitiveness;
them to resist the competitive pressure of EU will be achieved through
purposeful support to areas of their activities related to the future EU
integration of Bulgaria (achievement of harmonization of the production
processes with the European ecological standards, requirements for
labour and job safety, implementation of systems for quality management,
good laboratory practices, good production practices, increase of the
energy efficiency, stimulation of sustainable development of enterprises in
priority sectors and in slow regions.
Bulgarian Small and Medium Enterprises Promotion Agency
Global market integration of SME
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Within the framework of Working Program on the
implementation of National Strategy for encouragement of SME
development (2002-2006) started the project ”Providing assistance
to SME in meat producing and meat processing industry for the
Hazard Analysis and Control of Critical Points (“HACCP”)
introduction” – pilot project, funded through the Ministry of
Economy budget;
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The Project ”Providing assistance to SME in milk processing
industry for the Hazard Analysis and Control of Critical Points
(“HACCP”) introduction” started in May 2005 through the same
scheme (as the previous one).
Bulgarian Small and Medium Enterprises Promotion Agency
Innovations and Technological Development
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On the ground of understanding that competitive advantage in industry
is achieved through creation, introduction and dissemination of
innovation and in order to pursue purposeful policy for innovation and
R&D promotion, The Council of Ministers adopted in September, 2004,
Innovation strategy of Republic of Bulgaria and measures for its
implementation;
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Funds amounting to BGN 5 million are available for the
implementation of the first measure in the Innovation strategy –
“Establishment of National Innovation Fund” (NIF).The
operational goals of the fund are: to subsidize part of the costs for
market-oriented applied research, R&D projects intended to be
implemented in the industry; fulfill the measurements stated in the
Innovation strategy; to make use of the opportunities which are
provided in the Bulgarian Law on State Aid to support the innovative
companies.
Bulgarian Small and Medium Enterprises Promotion Agency
Sofia 1000, 1, Sveta Nedelya Sq.
tel: (359 2) 9329 273;
fax: (359 2) 980 5869
e-mail: [email protected]
web-site: http://www.sme.government.bg