SME Policy Index 2014 Middle East and North Africa

Politiques en faveur des PMEAFRIQUE DU NORD ET MOYEN-ORIENT 2014

Évaluation sur la base du Small Business Act pour l’Europe

SME Policy IndexTHE MEDITERRANEAN MIDDLE EAST AND NORTH AFRICA 2014

Implementation of the Small Business Act for Europe

Meeting of the MENA-OECD Working Group on SME Policy and Entrepreneurship

Paris, 23-24 September 2014

Outline of the presentation

1. Background, methodology and assessment process;

2. SMEs overview of the MED region;

3. Key findings and messages at the regional level;

4. Key findings and messages with respect to the last evaluation in 2008;

5. Next steps

2

Background, methodology and assessment process

The assessment benchmarks SME policies: - Among MED economies (ALG, EGY, LEB, LIB, MOR, ISR, JOR,

PA, TUN);

- With respect to the Small Business Act for Europe;

- With respect to the past assessment (done in 2008).

Uses the SME Policy Index as analytical tool

3

1

Dimensions Sub -dimensions

6 Access to finance for SMEs

Sub

-

Dimensions

6.1 Sources of external finance for SMEs

6.2 Legal and regulatory framework

5.3 ACAAs

Sub- dimensions Indicators

6.1 Sources of external finance for SMEs

Indicators

6.1.1 Credit guarantee schemes

Indicators Level of Reform

Indicators

1 2 3 4 5

Credit guarantee schemes

Public start-up funding

Business angels network

Policy dimensions

1. Education and training for entrepreneurship, including women’s entrepreneurship.

2. Efficient bankruptcy procedures and “second chance” for entrepreneurs.

3. Institutional and regulatory framework for SME policy making.

4. Operational environment for business creation.

5. Support services for SMEs and public procurement.

6. Access to finance for SMEs.

7. Supporting SMEs to benefit from Euro-MED networks and partnerships.

8. Enterprise skills and innovation.

9. SMEs in a green economy.

10. Internationalisation of SMEs.


The Small Business Act for Europe The assessment grid

Who is involved

5

The partner organisations coordinate the assessment

and conduct analysis

National coordinators manage the assessment at

country level

Government officials in ministries of economy, industry or SME agencies

Perform self assessments in consultation with the private sector and other stakeholders

Local experts support independent assessment

Individual experts or institutions Collect data and information in consultation with

the public and private sector

Private sector associations provide feedback on policy

reach and performance

Chambers of commerce and industry Provide advice on policy effectiveness and areas for

policy improvement


Overview of SMEs in the MED region

There is an important potential for SME development in the MENA region

6

Formal employment in SMEs is relatively low… … As is enterprise creation

IndiaEgypt

AlgeriaJordan

MoroccoCanadaTunisia

MENA averageOman

UAEQatarBrazil

SwitzerlandFrance

IsraelRussiaOECD

UK

0 1 2 3 4 5 6 7 8 9 10

0.63

Sources: IFC (2014) MSME Country Indicators and World Bank (2014) Entrepreneurship Database.

New limited liability companies per 1 000 working age people, average 2004-2012

Algeria

Bahrai

nEg

ypt

Jordan

Kuwait

Leban

on

Morocco

OmanQata

r

Saudi A

rabia

UAE

MENA av

erage

Brazil

RussiaChina

Canad

a

France

Israe

l

Switz

erlan

d UKUSA

Source

: IDC (2

014) MSM

E Country

Indica

tors 0

102030405060708090

% of total employment SME density (per 1000 people)

SME “density” and employment, 2009 or latest

Key findings and messages at the regional level

Challenges• Regulatory and business

environments need to improve;

• Access to external finance remains limited;

• Insufficient enterprise support networks and services;

• Lack of quality vocational and managerial skills for SME growth.

7

Main challenges and opportunities for SME development in MENA countries

Opportunities• Growing domestic

markets;• Progressive integration

and economic openness;• New prospects for

entrepreneurship;• Improving literacy rates

and education levels.

Key findings and messages at the regional level

• SME policy should be seen as economic policy to raise the potential for growth and productivity of small enterprises;

• General (although incremental) progress achieved in key SME policy dimensions;

• Progress is more marked in economies with solid and structured institutional framework;

• SME policy institutions and support agencies have continued to operate in countries in transition.

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1. Education and training for entrepreneurship, including women's entrepreneurship2. Efficient bankruptcy procedures and “second chance” for entrepreneurs

3. Institutional and regulatory framework for SME policy making

4. Operational environment for business creation

5.a. Support services for SMEs and public procurement

5.b. Public procurement6. Access to finance for SMEs

7. Supporting SMEs to benefit from Euro-MED networks and partnerships

8.a. Enterprise skills

8.b. Innovation

9. SMEs in a green economy

10. Internationalisation of SMEs

0

1

2

3

4

5

Regional overview of the results

Key findings and messages in key policy dimensions

• Improving business environments- Morocco’s National Committee for the Business Climate (CNEA);- Lebanon’s Improving Business Environment Initiative (IBEL).

• Enhancing policy coherence and coordination- Morocco’s strategic initiatives in key economic areas;- Algeria, Israel and Egypt’s designation of a ministry to lead SME policy;- P.A. efforts to increase policy coordination among key actors;- Jordan’s adoption a national strategy for SMEs for 2014-2018.

9

Algeria Egypt Israel Jordan Lebanon Morocco PA Tunisia0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Regional aver-age


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008 2013

Dimension 3. Institutional and regulatory framework for SME policy making

2013 results Comparison 2013 and 2008


• Improving access to finance- P. A. new credit guarantee schemes, credit bureau, micro finance regulatory framework;- New private credit bureaus in Egypt and Morocco; Jordan moving in the same direction;- New registries for moveable assets in Algeria, Jordan and Tunisia.

• Enhancing enterprise support services- Egypt has specialised institutions;- Tunisia’s virtual one-stop-shop to facilitate foreign trade.

10


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Regional aver-age


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008 2013

Dimension 6. Access to finance for SMEs



• Supporting innovation in SMEs:- Israel and Morocco strategic approach to support innovation in

SMEs;- New initiatives in all MED economies, although coordination and

evaluation remain an issue.

11Algeria Egypt Israel Jordan Lebanon Morocco PA Tunisia

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Regional aver-age


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008 2013

Dimension 8.2. Policy framework for SME innovation


Next steps for MENA countries

1. Step up efforts to improve the business climatea) Undertake business climate assessments

b) Conduct regulatory impact analyses

2. Adopt strategic and comprehensive approaches to SME policy

a) Identify SME policy objectives, targets, milestones, responsible agencies

b) Establish coordination mechanisms and consult with the private sector

c) Put SME policy into the wider economic policy context

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Next steps for MENA countries

3. Strengthen monitoring and evaluation to assess policy effectiveness

a) Evidence on policy effectiveness is very limitedb) Consultation and coordination with the private sector is

essential c) More and better data on private enterprise development

is needed to improve diagnoses

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Next steps for international organisations and key partners

• Foster the exchange of good practices among MENA countries and beyond;

• Contribute to capacity building and strengthening of policy institutions;

• Reinforce and extend regional and international business networks;

• Encourage and support other MENA countries in participating in assessments like the SME Policy Index 2014.

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Small Business & Entrepreneurship

SME Policy Index 2014 Middle East and North Africa