Características y funciones de las CGIs 44

I-5.4.1

Stakeholders consider that the Commission has selected those private sector representative organisations that have a real impact

I-5.4.2

Intermediary Organisations supported by the Commission have, during the period of support, implemented activities designed to increase capacity of private sector enterprises to obtain funding from bank or non-banking institutions

Findings at JC level - Tunisia Evaluation

No specific information available in the report.

Findings at JC level –

Moldova Evaluation

On the selection of private sector representative organisations that have a real impact: The evaluation reports that the impact of the Business centres which have been supported was limited by the lack of the “Necessary partnerships and relationships of trust with local public administrations, local businesses, and other donor-financed SME project”. (p.45).“Since local authorities were not properly involved in the design of the Centres, they never entered into any commitment to be part of their future development, with adverse implications for financial sustainability”. “The poor sustainability of these Business Centres can be contrasted with the more long-term oriented Business Centres established in Ungheni (CBC finance) and Cahul (City Twinning finance). In these cases, a public-private partnership (local public authority and local Chamber of Commerce and Industry) was envisaged from the start. In general, “stand-alone” Business Centre projects have not proved successful.”, p. 46. Additionally, “A structural weakness was that local public authorities and businesses preferred to contract the services of Business Centre directors personally, rather the services of the Business Centre as an institution”.

Targeting only one set of needs was criticized by the report, the team arguing that:

“The experience with Business Centres indicates that simply making available advisory services and training is not enough. Local entrepreneurs and would-be entrepreneurs need a large and varied basket of services available at all points in the life cycle of their business, from start-up through expansion to, if necessary, termination. The team would recommend […] Address[ing] the entire range of problems faced by SMEs, from poor local infrastructure through lack of access to credit to lack of business skills, rather than concentrating only on a subset of needs”. P.103. On the implementation of Intermediary Organisations’ activities designed to increase capacity of private sector enterprises to obtain funding from bank or non- banking institutions, the evaluation contends that this was neglected in the Commission’s support and that this was detrimental. In turn the evaluation recommends that Business centres: “By serving as an unbiased broker of information between banks and entrepreneurs, [Business Centres] can help unblock the credit pipeline. An even more direct intervention would be joint participation with international financial institutions or bilateral donors to make subsidised lines of credit available to SMEs (perhaps targeted specifically on priority end-uses such as meeting international norms and standards in food processing)”. p.103.

Findings at JC level – El Salvador Evaluation

Support to Intermediary Organisations in charge of increasing thee capacity of private sector enterprises to obtain funding from bank or non-banking institutions was not the focus of the FOMYPE programme.

Findings at JC level

Burkina Faso (1999-2008)

As mentioned under JC 5.2, the Commission has supported the creation of CGAs (Centre de Gestion Agréé)

Another intervention consisted in subsiding the services of another intermediary organisation:

« Un mécanisme de subvention (chèques services) a facilité l’accès au marché de cette demande émergente et solvable ; la Maison de l'Entreprise du Burkina Faso (MEBF) a confirmé son aptitude en tant qu’interface pour la promotion des Services de développement de l'entreprise (SDE) au Burkina Faso. »p.72

The Evaluation Report emphasises however:

« L’Etat devra mobiliser suffisamment de ressources pour l’accompagnement du secteur privé comme moteur de la croissance durable et du développement et renforcer les capacités des institutions intermédiaires d’appui au secteur privé en leur allouant des moyens d’action. » p.75

Findings at JC level -

Microfinance

The EU/ACP Microfinance Programme did not provide support to intermediary organisations supporting enterprises to develop bankable dossiers or otherwise enhance their capacity to obtain financing.

Source: EC, EU/ACP Microfinance Programme Final Evaluation

Findings at JC

level - BizClim No evidence is provided in the final evaluation of BizClim to suggest that it supported intermediary organisations during its activities.

Source: EC, Final Evaluation Private Sector Enabling Environmnet Facility

Findings at JC level

MEDA II

EIB loans targeted on the private sector and trade were provided direct to private corporate bodies and financial intermediaries with a view to strengthening their capacity to finance SMEs (p40)

In MEDA II a variety of instruments has been used, including technical assistance programmes and twinning to strengthen institutional capacity, and transfer of know-how to SMEs, professional associations, tradefacilitating institutions, and others. (p38) Egypt 98-08 See J.C. 5.6 EIB IF/OR (2010) n.a. Channeling DBs and EIB (2008) n.a.

CDE (2011) The table below shows that the bulk of the CDE support for access to finance has been addressed to enterprises, either SMEs (65.8%) or financial intermediaries (8.2%). Assistance to IOs (23.8%), with few exceptions, was ad hoc and targeted on professional associations or on specific structures set up to enhance and facilitate access to investment financing of SMEs, such as Tanyo in Niger.

Table 1 – Distribution of assistance to the “Banking” sector

Source: ADE (for the European Commission), Evaluation of the Centre for the Development of Enterprise, 2011 (p44)

The evaluation further specifies that “As far as investment finance was concerned the financial intermediaries supported have mostly been investment and venture capital funds. Banks were the main beneficiaries for capital finance.

The financial intermediaries supported through the non-financial assistance of the CDE generally benefited from credit lines or capital participation granted by international financial development institutions, such as the EIB. The objective of such loans and capital participation was to provide the financial intermediaries with the means - and in the case of the banks to stimulate their willingness - to finance SMEs. The non-financial assistance of the CDE to the financial intermediaries was targeted on improving their capacity to interact with SMEs. In such cases the CDE assistance, funded from the EDF subsidy and a modest contribution from the beneficiary, permitted improvements in the effectiveness of the loan or capital participation without increasing significantly its cost to the beneficiary financial institution.”

Source: ADE (for the European Commission), Evaluation of the Centre for the Development of Enterprise, 2011 (p43)

But as detailed under JC 5.5, there is little evidence, despite efforts, that beneficiary SMEs have managed to obtain financing from a bank.

Banking Measures in the

The risk capital operations could support IOs, for instance:

 “private equity funds: participation in investment funds taking participations in private companies or other investment funds;

€ %

Assistance to financial institutions 202 675 8.2% Assistance to IOs 588 479 23.8% Assistance to services providers 6 200 0.3% Direct and integrated assistance to ACP

enterprises

1 630 282 65.8% Meetings and technical and thematic

seminars

50 000 2.0%

Mediterranean

area  co-investments with pre-selected local intermediaries ; loans on special conditions, notably to micro-finance institutions; and

 support to guarantee schemes. (p.18).

However, the Report found that the choice of Intermediary Organisations was not always adequate: “The Commission did not set up controls in order to detect whether the same beneficiary was benefiting from different risk capital operations, either managed directly or through financial intermediaries. This was due to the absence of a central database at Commission level of all beneficiaries benefiting from risk capital operations.” and “Several financial intermediaries and agents did not meet their monitoring, reporting and financial requirements or were acting as promoters instead of as independent intermediaries” (p.20).

Employment and social inclusion, over 1999-2008

Improving access to finance by enterprises was not the focus of the support to Employment and social inclusion looked at within this evaluation.

JC 5.5 The ability of enterprises to obtain financial products and services has been