Baku, Azerbaijan, Oct. 19 / Trend /
Leyla Abdullayeva, expert of Trend’s analytical center.
Improving the mechanism of using the funds of the National Fund for Entrepreneurship Support (NFES) under the Economic Development Ministry of Azerbaijan will give an impetus to the development of small and medium enterprises in Azerbaijan, facilitating entrepreneurs’ access to preferential financing.
Last week, Azerbaijani President signed an order on changes to the process of providing loans. This order became another step in the development of entrepreneurship in the country in terms of easy access of entrepreneurs to soft loans, funded by the state. Its main importance is that both the term and the amount of loans issued were increased. These changes will affect those loans that are issued from the date of entry into force of the Presidential order.
The basic problem of small business is to open business in the financial plan. This is the issue of starting capital which is not available for everyone wishing to open business. Bank percentages for the commercial activity are maximally high (more than 20 percent), but privilege credits in the National Fund are unfortunately sufficient not for all. All these, plus to inflationary development leads to the fact that developing small enterprise is considered a risky matter.
The practice of world business testified that the small enterprises take an important place in the national economy of any state. Indeed, in many respects it determines the rates of economic growth, structure and quality of gross national product. In the developed countries worldwide, the small and medium business (SME) has long ago been named the motor of the economy. In the budgets of these countries, significant share fell on SME. And, it is understandable that the governments of these countries in every possible way try to support and develop such enterprises.
The situation in Azerbaijan shows that the conditions created in the country due to political and macroeconomic stability to accelerate the development of small and medium businesses are not fully used. The number of those engaged in entrepreneurial activity below the existing capacity and share in GDP is within 10 percent, whereas in Europe the share of SMEs in GDP reaches 20-30 percent or higher.
Today Azerbaijan should develop production, make them competitive so that tomorrow when the borders are opened, Azerbaijani products could take solid niche in the commodity market of not only Azerbaijan, but also other countries. And certainly significant role in settling this problem belongs to the SME. We expect joining the World Trade Organization (WTO), after which Azerbaijani market will be completely opened for the foreign products. Most probably, the market will be full of imported goods, which will be more qualitative and cheaper, and Azerbaijani producers will not be able to compete with them. It means that Azerbaijan’s economy will directly depend on foreign products.
Original Article: http://en.trend.az/capital/analytical/1946727.html