10th FEMIP Conference: Mediterranean SMEs: ready to break new ground

Small and medium-sized enterprises (SMEs) make up the core of the economic fabric of the Mediterranean partner countries but do they have the means to develop and break new ground? This is a particularly crucial question in the aftermath of the Arab Spring when the economic and social expectations of the local populations, especially of young people, in terms of employment are becoming more and more pressing. And in a region where according to experts, 20 million jobs have to be created by 2020 in order to stabilise the unemployment rate. This is why the future of SMEs will be at the centre of the discussions and debates of the 10th FEMIP Conference which will be hosted in Tunis on 8 Match 2012 by the European Investment Bank (EIB) in collaboration with the Tunisian Ministry of Investment and International Cooperation and PROMOS[1].

Throughout the conference policymakers, experts and professionals will discuss the specific financing, training and competiveness requirements of Mediterranean businesses with a view to helping them support job creation and more inclusive growth by means of appropriate concrete measures. 

The conference will focus on three key development themes for SMEs:

• improving and diversifying financial services for SMEs and micro-enterprises. In other words, given the limited access of SMEs to credit, how can alternative methods of financing outside the traditional banking sector be developed and found? There are many avenues that can be explored: development of guarantee and credit risk assessment mechanisms for banking institutions,  opening up of the capital markets,  widening the scope for financing through support to private equity funds and micro-finance. Addressing this issue, the EIB decided in 2011 to enhance its credit lines in order to mobilise the resources available for Tunisian SMEs. Other concrete measures are currently being examined at the EIB, such as the introduction of a guarantee facility to encourage local banks to finance Mediterranean SMEs;
• promoting entrepreneurship and management and technical training for businesses, including local financial institutions. Shared and prepared entrepreneurship is an undeniable guarantee of innovation and sustainability for business and of profitability and attractiveness for investors and financiers.  This is an area where the EIB makes a very active contribution through its technical assistance operations in the Mediterranean region, under which it provides technical and financial support and expertise, as illustrated by its cooperation with the Tunisian private equity investors association ATIC. The EIB also makes every effort to implement the principles of the Euro-Mediterranean Charter for Enterprise with respect to “access to financial services”;
• reinforcing the international competitiveness of businesses. SMEs have to innovate and improve their production, distribution and marketing strategies and methods in order to access new markets and increase their economic efficiency by developing new specialisations.

This conference is consistent with the EIB’s operational priority to promote the private sector in accordance with its remit firmly focussed on supporting the real economy. It also deals with one of the six priority areas of the Union for the Mediterranean. For this reason, the Euro-Mediterranean finance ministers at their meeting in May 2010 in Brussels asked the EIB to devote one of its 2012 conferences to the crucial theme of SMEs.   In parallel with its long-term lending, the EIB assists investment in the local private sector by providing equity or quasi-equity to private enterprises. This support for SMEs was consolidated in 2011, accounting for 63% of total loans compared to 37% for the public sector. Serving as effective leverage for other sources of financing for SMEs and innovative businesses,  it took in 2011, for example, the form of the Private Sector Facilities III Project in Lebanon, whereby the Bank granted a loan of EUR 30 million to Bank Audi to enable it to provide long-term financing for projects undertaken by SMEs in Lebanon.  Also in 2011, the EIB advanced a loan of EUR 10 million to the limited company Capital Invest International (CII) to support SMEs in North Africa. Since 2002, 2 300 Mediterranean SMEs have been financed by the EIB and thus benefited from Bank’s experience and know-how acquired within the European Union.

This conference is also an important milestone for Tunisia:   it is the first major international debate to be held in this county since a new chapter in its history was begun. During the conference, the tenth anniversary commemorative year of the EIB’s operations in the Mediterranean will be launched. Further details are available under http://femip10.eib.org.