Gubad Ibadoghlu, Senior Analyst, Economic Research Center
In mid-September, the European Commission published its annual report on the EU4Business initiative, covering all EU support to SMEs in the Eastern Partnership countries. The 2021 report provides detailed information on EU assistance across the program’s three priority areas: access to finance, business development services and the business-enabling environment. In 2020, the EU provided support to nearly 72,000 SMEs, a third of which are owned by women. This has resulted in over 50,000 new jobs and €1 billion in extra income generated by EU-supported SMEs in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
StrategEast has interviewed leading EaP experts to hear their thoughts on factors for SMEs’ growth in their countries. Here are the answers from an Azerbaijani expert.
The main problem of Azerbaijani entrepreneurs is not financial access – loans are available, but interest rates are very high. As for business development services, the Small and Medium Business (SMB) Development Agency serves entrepreneurs in Azerbaijan. As a legal entity under the Ministry of Economy, the Agency is authorized to support the development of small and medium businesses (in the country by providing SMBs with several services and ensuring coordination and regulation of services rendered by government entities) SMBs.
As for the business enabling environment, Entrepreneurs in Azerbaijan need an independent court to protect their rights. Unfortunately, during the 30 years of independence, the judiciary has always depended on the executive branch. Besides, one of the leading entrepreneurship problems for Azerbaijan is civil servants’ entrepreneurship, which creates unfair competition in the market and strengthens the monopoly.
Finally, one of the main problems of entrepreneurs is the limited market and the declining purchasing power of the population. The COVID-19 pandemic has led to job losses and increasing poverty. As a result, entrepreneurs also suffered from this. The number of women entrepreneurs in Azerbaijan is 3.7 times less than men. If 836,679 men are engaged in individual entrepreneurship, the number of women in this field is 225,858.
