EU funded projects in BiH

SME Development

PROJECT DETAILS

Sectors Competitiveness and innovation
EU Acquis chapters Enterprise and industrial policy
Programme Funding Year 2007, 2009, 2013
Value €10,673,000
Periods of implementation 2009, 2010, 2012, 2014
Locations BANOVIĆI, GRAČANICA, GRADAČAC, KALESIJA, KLADANJ, LUKAVAC, SREBRENIK, TUZLA, ŽIVINICE, ČELIĆ, DOBOJ-ISTOK, SAPNA, TEOČAK, BANJA LUKA, BIJELJINA, BILEĆA, KOZARSKA DUBICA, GRADIŠKA, BROD, NOVI GRAD, ŠAMAC, BRATUNAC, ČAJNIČE, ČELINAC, DERVENTA, DOBOJ, GACKO, HAN PIJESAK, KALINOVIK, KOTOR VAROŠ, LAKTAŠI, LOPARE, LJUBINJE, MODRIČA, MRKONJIĆ GRAD, NEVESINJE, PRIJEDOR, PRNJAVOR, ROGATICA, RUDO, KNEŽEVO, SOKOLAC, SRBAC, SREBRENICA, ŠEKOVIĆI, ŠIPOVO, TESLIĆ, TREBINJE, UGLJEVIK, VIŠEGRAD, VLASENICA, ZVORNIK, SARAJEVO-CENTAR, HADŽIĆI, ILIDŽA, ILIJAŠ, SARAJEVO-NOVI GRAD, NOVO SARAJEVO, SARAJEVO-STARI GRAD, TRNOVO (FBiH), VOGOŠĆA, GRUDE, ŠIROKI BRIJEG, LJUBUŠKI, POSUŠJE, ČAPLJINA, ČITLUK, JABLANICA, KONJIC, NEUM, PROZOR, STOLAC, RAVNO, ODŽAK, ORAŠJE, DOMALJEVAC-ŠAMAC, BIHAĆ, BOSANSKA KRUPA, BOSANSKI PETROVAC, CAZIN, KLJUČ, SANSKI MOST, VELIKA KLADUŠA, BUŽIM, BOSANSKO GRAHOVO, TOMISLAVGRAD, GLAMOČ, KUPRES, LIVNO, DRVAR, BUGOJNO, BUSOVAČA, DONJI VAKUF, FOJNICA, GORNJI VAKUF - USKOPLJE, JAJCE, KISELJAK, KREŠEVO, NOVI TRAVNIK, TRAVNIK, VITEZ, DOBRETIĆI, FOČA - USTIKOLINA, GORAŽDE, PALE - PRAČA, FOČA, BREZA, KAKANJ, MAGLAJ, OLOVO, TEŠANJ, VAREŠ, VISOKO, ZAVIDOVIĆI, ZENICA, ŽEPČE, DOBOJ - JUG, USORA, PALE, BRČKO, BERKOVIĆI, NOVO GORAŽDE, DONJI ŽABAR, ISTOČNA ILIDŽA, ISTOČNI DRVAR, ISTOČNI MOSTAR, ISTOČNI STARI GRAD, ISTOČNO NOVO SARAJEVO, JEZERO, KOSTAJNICA, KRUPA NA UNI, KUPRES (RS), MILIĆI, MOSTAR, OSMACI, OŠTRA LUKA, PELAGIĆEVO, PETROVAC, PETROVO, RIBNIK, STANARI, TRNOVO (RS), VUKOSAVLJE

SUMMARY

BiH’s economy has been slower than neighbouring countries to adapt to the market changes and the effects of the global economic and financial crisis are still being felt. The impact of devastating floods in May 2014 is further hampering recovery and economic growth. The private sector economy is dominated by SMEs, which constitute 99.3% of all enterprises. According to statistics, only ¼ of registered SMEs – approximately 32,000 – are economically active. Out of those, 73% are micro enterprises with less than 10 employees. This explains why SMEs account for only for 62% of the labour force. Despite constituting the overwhelming majority of enterprises, SMEs also generate only around 60% of value added. SME contributions to exports are also limited, and the country’s largest 100 companies generate 70% of all exports. Small Business Act for Europe (“SBA”) is the guiding strategy for SME development in the European Union. Implementation of the Stabilisation and Association Agreement (SAA) calls for the creation of a favourable climate for private investments, essential to economic and industrial revitalisation of BiH. It further promotes strengthening of regional and local development cooperation to contribute to economic development and reduced regional imbalances. More specifically, the SAA places an emphasis on the improved cooperation for SMEs and private sector development based on the relevant EU policies, in particular the European Charter for Small Enterprises and the SBA. At sector level, it focuses on industrial development and tourism by promoting the transfer of knowledge and partnerships to support an improved management and development of business environment. Despite increasing efforts by the authorities to promote and support the development of the SME sector, the SME Policy Index for the Western Balkans and Turkey shows that the gap in the implementation of the principles of the SBA, the fundamental guidelines for SME development in the EU, between BiH and other EU pre-accession economies has further widened. To stimulate sustainable economic development in Bosnia and Herzegovina, the European Union has supported the SME sector through capacity building of all stakeholders responsible for implementation of SME policies which are targeting business services, infrastructure, introduction of standards and export promotion. To increase the competitiveness of SMEs in BiH, both within the domestic, regional, and international markets, the European Union supports implementation of the SBA through awareness raising and transfer of knowledge on the best SBA practices, as well as by providing business on SBA principles for the improvement of SME performance.

RESULTS

- Enhanced local partnerships for defining and implementing local economic development measures: 120 BiH municipalities trained and 50 project proposals identified, targeting improvements in local business environment, such as construction of business infrastructure and cluster development, provision of business services and financial instruments for SMEs, etc. Some of these ideas have been further elaborated in the project proposals of an ongoing IPA 2011 Local Economic development grant scheme. - Pilot SME voucher scheme: 143 SMEs supported through the Voucher Scheme worth 120,000 euro EU funding and 71,000 euro the SME contribution. Over 70 local business advisors were trained and accredited to provide consultancy services to some 100 SMEs, which received assistance in the fields of development of business plans, introduction of standards, marketing and improvement in production, value chains, etc. - International expertise provided to 18 medium sized enterprises in the following sectors: food & beverages, construction, wood, metal processing, etc. - Consultancy services and industry expertise provided to 136 companies in order to enhance their management skills improve production processes or introduce and promote new products, thus enabling these companies to move to the next level of operation. 80% of the companies have registered an increase in their revenues during the course of the project, average increase in employment in the assisted companies is 23%, and some 70% of assisted companies continued with consultancy services. 100 SMEs assisted with introduction of quality management standards according to ISO 9000 series 10 feasibility studies for bankable investment projects in business infrastructure developed - Increased awareness amongst SME and other stakeholders about the SBA within at least 300 companies reached through awareness raising and visibility events (representing close to 1% of active SMEs in BiH) - Best practice in SBA implementation exchanged and know-how transferred through a “people to people” approach demonstrated by improved business skills within at least 80 participating entrepreneurs and a quality of expertise by a minimum of 75 local consultants and increased demand by at least 40% for advisory projects. - Relevance and value of the SBA demonstrated through the implementation of advisory services by at least 130 companies assisted, of which at least 65% report an increase in turnover and over 55% an increase in the number of employees.