2010/SMEWG31/012 Agenda Item: 9.5 SMEWG Strategic Plan 2009-2012- Report on Progress of Activities Under Financing Purpose: Information Submitted by: Indonesia, Japan 31 st Small and Medium Enterprises Working Group Meeting Gifu, Japan 29-30 September 2010
SMEWG Strategic Plan 2009 20122012 Report on Progress of Activities under Financing Champion Economies : Indonesia and Japan 1 Recap of KPIs under Financing Best Practice KPIs Project KPIs 1. Financing assistance for micro enterprises (e.g., micro credit, pawn shop, workers remittances) 2. Availability of different forms of public / institutional financing (e.g., loan, grant, equity, export and trade financing, credit guarantee) 3. Availability of private financing (e.g., venture capital, angel capital funds) 4. Availability of technical assistance funds to facilitate access to credit 5. Other forms of financing i not covered above 6. Development of information systems for monitoring, provision of financial information etc Medium Term KPIs 1. Increase number of microenterprises which have access to financing assistance 2. Increase number of public and private financing schemes/programmes/ forums for SMEs 1
APEC SMEWG Related to Financing: 1 of 4 1. APEC Symposium on SME Strategies to Manage the Impacts of the Global Financial Crisis (Chinese Taipei, 2009) (1) To provide knowledge and information i about (1) Total 25 speakers from 10 APEC the ways in which SMEs manage the impacts of economies, and from OECD, the global financial crisis through the European Association of Mutual presentation of research reports and the sharing Guarantee Societies and other of best practices. organizations. (2) To identify policy tools that can be adopted in (2) Total around 400 participants from response to the financial crisis, and formulate 20 APEC economies. innovative strategies to help SMEs survive the (3) The symposium discussed a crisis. number of critical issues (3) To stimulate cross border cooperation on concerning SMEs capacity in surviving the crisis and managingtheimpacts impacts oftheglobal financial crisis between related stakeholders of the APEC region through constructive communication in the symposium. gained fruitful outcomes. (4) As an out put of the symposium, Principles and Checklist of Financial Crisis Management for APEC SMEs was delivered at the SMEWG meeting in Singapore in 2009. 3 APEC SMEWG Related to Financing: 2 of 4 2. Access to credit seminar (New Zealand, 2009) (1) To Improve access to finance for SMEs which is an agreed priority for the SME Working Group s Strategic Plan 2009 2012. (2) To facilitate a discussion on policies, programmes, regulatory frameworks and regulations regarding access to finance in member economies with the view to assisting officials identify and implement reforms that encourage more effective accessto finance by SMEs. (1) Approximately 30 people participated in the Access to Credit seminar from eleven different APEC member economies. (2) In addition to officials responsible for SME policy, the seminar was attended by representatives from the banking sector, the APEC Business Advisory Council, and academia. (3) The lessons learnt from this seminar will be compiled into a how to guidebook. 4 2
APEC SMEWG Related to Financing: 3 of 4 3. Seminar on Getting Credit for Small and Medium Enterprises (1st Phase of APEC Ease of Doing Business Action Plan) (21 st Sep in Sendai, Japan) (1) This EoDB getting credit project seeks to build the capacities of improve SMEs access to finance in member economies. (2) This seminar focused on (i) legal infrastructure for improving access to credit (collateralization law and bankruptcy law) and (ii) dissemination of credit information. (3) This seminar was supported by ABAC and synergy is expected between this project and ABAC s project on SME finance. (1) Around 70 participants attended and 2 panel discussions, working lunch and 2 sets of group discussion by all the participants were held. (2) The importance of good institutions for secured lending and systems that provide reliable credit information were confirmed. 5 APEC SMEWG Related to Financing: 4 of 4 4. ASEAN 5 countries SME finance survey (Japan, 2009 2010) 2010) (1) To recognize SME finance scheme in depth through ASEAN 5 countries situations of SME finance. (2) This survey will be implemented by Japan on their own fund. (1) This project will provide ASEAN 5 countries profiles and best practices in the field of SME including micro finance. (2) Findings report will be completed and shared with the APEC economies at the SME WG Meeting in U.S. 6 3
Usage Gaps Identified and Possible Future Type Gaps Need to improve SMEs access to finance and SMEs capacities to manage global financial crisis Need to build capacities of SME financial institutions Need for more collaboration between APEC SME Ministerial Meeting and other meetings such as APEC Finance Need to establish good institutions for secured lending such as collateralization law Need to provide reliable credit information Ministers Meeting and G20 Meeting Need to support the availability of private financing (KPIs financing no.3) especially for micro enterprises by promoting the establishment of microfinance instituions Need to promote capacities of the existing microfinance institutions by learning the experiences from MFIs in other economies 7 Gaps Identified and Possible Future Type Usage 1.Workshop on Microfinance Institutions (Indonesia, 2011) (1) This project seeks to hold a workshop which enable economies to exchange information and experience in developing microfinance institutions (2) The workshop is currently proposed for the APEC BMC assessment, and expected to be held in June/July 2011 (3) The project concept note has been submitted to APEC Secretariat. (1) This workshop will provide best practices in developing microfinance institutions including the necessary capacity building so that the APEC member economies are able to promote the financial assistances to micro enterprises 8 4
Annex 9 Brunei Darussalam s Related to Financing: 1 of 7 1. Export Refinancing Scheme (ERS) The Ministry of Industry and Primary Resources and Bank Islam Brunei Darussalam has launched the new Export Refinancing Scheme (ERS) on the 15 th April 2010. This new financiali scheme is to give SMEs abetter btt footing in business. The Export Refinancing Scheme (ERS) provides direct and indirect exporters short term financing before and after they make a delivery. These facilities are granted to companies registered and certified as an exporter. 1. The Minimum Financing Limit is BND50,000.00 and the Maximum Financing Limit is BND500,000.00. 2. Disbursed amount of loan. 3. Minimize amount of defaulted accounts. The pre shipment ERS facility helps exporters to finance the purchase of items such as raw materials and general costs. The post shipment ERS facility on the other hand aims to help defray the expenses of delivery. The main aim of this scheme is to provide financing facilities to local entrepreneurs in which they are capable of exporting their products. Secondly, it is a way for BIBD and His Majesty s government to help local entrepreneurs who have capabilities in venturing into export products. 4. Minimize duration of loan approval. 5. Rate of loan disbursement. 6. Declining rate of Non Performing Loan (NPL). 7. Time frame of loan approval. 5
Brunei Darussalam s Related to Financing: 2 of 7 2. Enterprise Facilitation Scheme (EFS) The Enterprise Facilitation Scheme (EFS) is one of the financing schemes initiated by the Ministry of Industry and Primary Resources to assist and expedite the development of SMEs in Brunei Darussalam. The scheme is wholly financed by the Government of Brunei Darussalam and managed jointly with appointed local banks responsible for the disbursement and administration of the fund. The objectives of this scheme are to provide financial support for SMEs in Brunei Darussalam, and to encourage and assist local enterprises to upgrade, modernize and expand. Interest rate is at 4% per annum based on annual reducing balance, and maximum period of repayment is 7 years. The relevant sectors which are targeted for the scheme are Agriculture, Fisheries, Forestry, Manufacturing, Tourism, Construction and ICT. 1. The Maximum Financing Limit for EFS is BND5 Million. 2. Btt Better utilization of allocated Industrial Development Fund budget (IDF). 3. Increase number of EFS 4. Increase amount (in $) of EFS 5. Success rate of fund application & utilization. 6. Cumulative rate on the average number of 7. Cumulative rate on the average amount of Brunei Darussalam s Related to Financing: 3 of 7 3. Micro credit Financing Scheme (MFS) The Micro credit Financing Scheme (MFS) provides opportunities to small and medium enterprises in support of the growth of the small/micro socio economy and to provide employment opportunities in Negara Brunei Darussalam. The objective of this scheme is to provide financial support for SMEs in Brunei Darussalam. Interest rate is at 4% per annum based on annual reducing balance, and the maximum period of repayment is 4 years. This Scheme covers all sectors such as production (includes Agriculture, Fisheries and Forestry), workshops, computer & telecommunication, tourism services, retailer/wholesaler, professional services and other services that provide business opportunities and employment. 1. The Maximum Financing Limit for MFS is BND50,000.00. 2. Increase number of MFS 3. Increase amount (in $) of MFS 4. Success rate of fund application & utilization. 5. Cumulative rate on the average number of 6. Cumulative rate on the average 6. Cumulative rate on the average amount of 6
Brunei Darussalam s Related to Financing: 4 of 7 4. AiTi Grant Scheme for Local ICT Industry 1. The objectives of this grant scheme are: a) to encourage R&D activities by local business in Brunei Darussalam to produce innovative products with significant commercial potential with emphasis on Brunei Made ; b) to strengthen R&D capabilities of Brunei SMEs; and c) to encourage the development of competitive local content developers in Brunei Darussalam. 1. Increase number of approved application. 2. Increase amount (in $) of 3. Success rate of fund application & utilization. Brunei Darussalam s Related to Financing: 5 of 7 5. The Local Enterprise Applications and Products (LEAP) Grants Brunei Economic Development Board (BEDB) has officially launched their Local Enterprise Application and Products (LEAP) program on the 03 rd August 2010. The LEAP program, the latest t in aseries of BEDB initiativesiti to support local SMEs, is established with the objective to support the development of new products or applications by Brunei SMEs as well as students and researchers of Institute of Higher Learning s (IHL). It is designed to provide financial support to develop an innovative idea into a credible working prototype or proof of concept. The LEAP program is hoped to pave the way for more of our own Made In Brunei products and applications to be tested and used to fulfill the requirements and needs within the Brunei Government and in the private sector. This program can motivate innovators to crystallize their bright ideas, encourage innovative solutions and eventually grow promising Brunei businesses founded on local ideas, skills and talents. In assessing the LEAP program applicants, the BEDB will be looking at the innovative technological content, commercial practicality of the product in the private and/or public sector, scalability and export potential of the product to be developed as well as the demonstrated commitment of the people behind each application. 1. Under the LEAP program, local SMEs with innovative ideas and good business plans can apply for grants of up to a maximum of BND150,000.00 per application for the purpose of developing promising product concepts into prototypes. 2. Increase number of approved application. 3. Increase amount (in $) of 3. Success rate of fund application & utilization. 7
Brunei Darussalam s Related to Financing: 6 of 7 6. Accel X Venture Capital Fund Initiated by the Brunei Economic Development Board and the Accel X Pte Ltd, a Singapore based venture capital fund, launched in 2009, is a $15to $20 million company that runs a so called business angels scheme, which allows young firms access to funds to finance their business expansion. At the moment, Brunei Economic Development Board has injected BND$5 millions dollars in the fund and the amount has been reserved for Brunei based high tech companies particularly in the areas of ICT, interactive digital media and engineering with high growth potential. 1. Increase number of approved application. 2. Increase amount (in $) of 3. Success rate of fund application & utilization. With the introduction of Accel X venture capital fund, the BEDB hopes that this initiative will not only complement the Ministry of Finance s initiatives in providing equity financing for strategic projects but will also be the right partner to guide startups in their quest to grow while making the business environment more conducive for SMEs. BEDB s first venture capital fund investment was made into one of the local companies and an icentre incubatee, namely Infindo Technology. Brunei Darussalam s Related to Financing: 7 of 7 7. Youth Development Resources Grant Scheme 1. In conjunction with the Youth Skills Development Program which was launched in July 2008 and initiated by the Youth Development Resources (YDR), the Brunei Economic Development Board (BEDB) awarded dmicro grants to help the young people of the Youth Development Centre to start their own small businesses. The YDR Grants given to the participants are not monetary, but are in the form of equipment disbursement. Youth are required to write a simple business plan, and provide a list of equipment they would like to receive in order to start their business. Once the BEDB has disbursed the equipment to the grant recipients, a close and periodic review of their business will be conducted. 2. The objective of this initiative is to help alleviate unemployment in Brunei by providing opportunities and financial grant for youths to become successful in business or in their careers. The contributing partners to this Youth Skills Development Program are Alcoa (USA), BIBD (Brunei) and Petroleum Geo Services (Norway). 1. Maximum amount of BND2,000. 2. Currently, 16 companies have received their financiali grants of $40,000 on 11 th March 2009, and 22 more micro grants were given to eligible recipients to start their businesses. Furthermore, 7 former recipients were also awarded with another micro grant based on their promising results dated 22 nd April 2010. 8