Brussels, 17 January 2020

EaP Platform 2 Meeting

During EaP Platform 2 meeting that took place in Brussels, on 17 Janaury 2020,  David Tsiskaridze (International Business and Economic Development Center, Georgia) and Tatul Manaseryan (Research Center ALTERNATIVE, Armenia) advocated for leveraging the untapped potential of EaP-based SMEs through increased access to finance and the development of more blending opportunities. They have also highlighted the importance of increased support for the harmonization of legislation across EaP countries in the field of telecom rules, cybersecurity, eHealth and eTrade.

2020’s first meeting of EaP Platform 2 on Economic Development and Market Opportunities facilitated an open discussion between civil society representatives and their EU counterparts. The Platform meeting shall contribute to this year’s Eastern Partnership Summit, where objectives and activities for economic development and market opportunities beyond 2020 will be established.

EaP CSF’s representatives, David Tsikaridze and Tatul Manaseryan, brought to the attention of the audience that access to finance is one of the major factors hindering further development of SMEs in EaP countries. Loan Guarantee Funds, venture capital, business angels, growth stock markets, or crowd funding could be appropriate means to increase access to financing in EaP countries. However, they are still largely absent. The Forum representatives acknowledged that the EU’s experience in supporting its own SMEs might help the further development and improvement of the situation in the EaP countries. Especially, instruments such as the European Investment Fund (EIF) or the InnovFin SME Guarantee Facility seem to be pertinent. Furthermore, EaP SME is lacking collateral loan schemes, which negatively affects the financing of small agribusinesses in EaP countries: For small farmers and small farmer cooperatives, an adequate collateral is the key primer to attain loans. As they largely lack sufficient collateral, SMEs cannot guarantee loans, and hence, face serious barriers in gaining access to necessary financing.

In order to break this vicious circle, the Forum representatives suggested initiating Loan Guarantee Funds as a pilot project. Interested stakeholders should consider loan guarantee schemes that are already in use throughout the EU for the support of access to finance for small farmers and start-ups. Evaluating the applicability of these schemes, an acceptable model could be found for the local realities of the EaP region. The Forum representatives urged the EaP countries to utilize their cooperative advantages, to focus on common economic threats, and to work closer with the expert community of EaP member countries. So far, EaP governments frequently ignore the opinion of civil society experts. Common efforts should also address issues related to gender equality, the green agenda and digital transformation.