WBIF Private Sector Funding Presentation to Chambers of Commerce of Western Balkans
In order to support the companies from the Western Balkans region in their sustainable growth, WB6 CIF, within the framework of the Project: “EU support to the Western Balkans 6 Chamber Investment Forum for the Development of the Common Regional Market“, in cooperation with the Directorate-General for Neighbourhood and Enlargement (DG NEAR) and Western Balkans Investment Framework, held a joint online information session on 26 April 2024. The session, titled: “WBIF Private Sector Funding Presentation to Chambers of Commerce of Western Balkans, “ had more than 40 participants from the Western Balkans Chambers of Commerce.
The event brought greater insights and awareness to participants regarding accessing EU Funds, what is available for SMEs in the region, and the vital role Chambers of Commerce play in channeling this information to interested companies.
“The access to finance has been identified as one of the main obstacles or pending issues for the economies of the Western Balkans Region and reasons for that are multiple. The Western Balkans Investment Framework has a set of blending, private sector blending opportunities which are being offered, which you would agree are welcome to the market but on behalf of the companies from the Western Balkans are at any point not sufficient. That means more additional and new instruments are needed for the companies in the Western Balkans to support in some sort also the private sector blending and access all the opportunities that our companies can tap in the region“- addressed Tatjana Shterjova Dushkovska, Secretary General of WB6 CIF.
The online information session was led by Ms. Mirjona Sadiku and Mr. Roberto Estelles Colom, as representatives of Western Balkans Investment Framework (WBIF) and ended with a Questions and Answers time slot.
Since 2009, the WBIF has facilitated over €600 million in IPA (Instrument for Pre-accession Assistance) resources, which has leveraged more than €6 billion in loans and other financial products for SMEs.
To enhance financing support, WBIF employs a strategic approach known as blending. This method optimizes the use of their grants for the private sector by combining them with other partner financing.
Blending is particularly effective in supporting infrastructure projects and small and medium-sized enterprises (SMEs), where it can significantly increase the scale of investment and enhance the sustainability of funding. By using this method, organizations can ensure that their support goes further and has a more substantial impact on development goals.
WBIF as a public institution, the focus is on aligning investments with policy priorities to achieve specific goals. By supporting SMEs, WBIF aims to contribute to various policy priorities such as the Economic and Investment Plan for the Western Balkans, the Green Agenda, the Agenda on Research, Innovation, Education, Culture, Youth and Sports, as well as initiatives like the Global Gateway, the Green Deal, Jobs and Growth Strategies and the Growth Plan. This approach ensures that investments through the Western Balkans Investment Framework (WBIF) are targeted towards areas that can have a meaningful impact on the region`s development and alignment with broader policy objectives.
There is a comprehensive approach to supporting the competitiveness of SMEs, focusing on facilitating access to finance for green investments, sustainable agriculture, innovation, digital transition, trade and value chain integration, financial inclusion, and financing diversification. This approach aims to empower SMEs to invest in energy efficiency, digital technologies, and sustainable agriculture practices, and to meet EU standards to bolster their exports within the region or with the EU.”
As well, the difference between the blending and guarantees was emphasized. The difference between blending and guarantees lies in the nature of the support provided.
Blending involves cash-based support, where a grant component is provided either for technical assistance, mixed with a loan from an international financial institution (IFI), or used as equity for a project. Blending operations are regional-based solutions that come free of charge from the commission, without any fees involved.
On the other hand, guarantees are unfunded support, meaning nothing is provided upfront. Guarantees function as insurance, promising to cover losses that may occur and they are provided by the Western Balkans Investment Framework (WBIF) intended for local financial institutions, commercial banks, or leasing companies. These institutions understand that the guarantee promises to cover a portion of their losses if they materialize.
This assurance encourages these actors to extend financing to SMEs and other projects with reduced risk, ultimately facilitating greater access to finance in the region.
The approach taken with the European Investment Fund (EIF) involves setting specific criteria that must be met. This allows the EIF to engage with multiple banking institutions at once. In the current press release , a strategy recently highlighted by a new guarantee program that involves 11 different banks and financial intermediaries in the Western Balkans across the region. Instead of evaluating each bank individually, the EIF uses a set of rules to choose which banks are eligible to participate, focusing on small and medium-sized enterprises (SMEs), the purpose of the loans, and the types of financial intermediaries involved.
The Western Balkans Investment Framework (WBIF) uses guarantees to encourage financial institutions to create a new set of loans specifically designed for SMEs. By offering these guarantees, the WBIF takes on some of the risk, allowing the benefits—like lower interest rates or less need for collateral, or extend of loan period—to reach the SMEs. This means financial institutions/banks must offer these favorable terms to new SME clients, particularly targeting groups like young entrepreneurs, women, or those in agriculture. The idea is to ensure that WBIF’s support helps these businesses grow and develop by providing them with better loan conditions than they would typically receive.
Conclusion:
The event concluded by emphasizing an action plan to facilitate the assimilation of information regarding accessing finance for companies, and to effectively raise awareness among companies about accessing EU funds. The actions suggested were:
Role of the Chambers of Commerce: The role of the Chambers of Commerce in the Western Balkans will continue to be crucial in bridging the gap between EU funding opportunities and SMEs. They act as intermediaries, providing regular updates and tailored information to businesses that might benefit from such funds.
Strengtheningq Cooperation: It is essential to fortify the ongoing collaboration between the Western Balkans 6 Chamber Investment Forum and the Western Balkans Investment Framework. This strengthened partnership ensures that precise and actionable information about funding programs reaches SMEs directly and efficiently.
Regular Communication: There should be a consistent flow of information to SMEs through regular updates and press releases about new programs. The Chambers of Commerce of Western Balkans can play a significant role in this by distributing these updates to their members.
B2B events: The importance of having dedicated sessions that simplify the dissemination of information about accessing EU funds. These sessions should focus on presenting the information in a clear and accessible manner by the companies of the Western Balkans region.
By focusing on these actions, the aim is to make it easier for SMEs in the Western Balkans to understand and access EU funding, ultimately supporting their growth and development in the region.
