___________________________________________________________________________ 2013/FMP/WKSP4/006 Session: III SMEs’ Participation in Regional Production Networks and Access to Finance: ASEAN Perspectives Submitted by: ERIA Workshop on Trade Finance Lombok, Indonesia 1 July 2013
20
Embed
SMEs’ Participation in Regional Production Networks and Access …mddb.apec.org/Documents/2013/FMP/WKSP4/13_fmp_wksp4_006.pdf · 2013-07-30 · SMEs’ Participation in Regional
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
SMEs in general face a number of obstacles in accessing
finance; mainly related to their limited resources and
perceived risks by lenders.
Classic issue: credit rationing for SMEs, because of
greater opaqueness and risks.
Access to finance seems to be the biggest problem.
14
SMEs’ Access to Finance (cont.)
Key findings from ERIA study:
Start-up and expansion mainly from internal finance.
External finance becomes more important for domestically-owned, smaller, making lower profit SMEs in less-developedeconomies.
There are evidences of credit rationing, or risk premiumexercised by financial institution on SMEs Larger SMEs in more developed economies tend to get bigger loans,
with longer terms and at a lower interest rate than otherwise
Net worth, collateral, business plan, and cash flow are necessary to getfavorable terms of financing.
Financial access significantly affect innovative and exportcapability of SMEs.
15
The Importance of Government Initiatives to Promote
SME Development and Internationalization
16 Source: Wong and Wirjo: ASEAN – BAC Survey (2011-2012)
Promoting SME development is a very difficult task -
complex; depends not only on policy or external condition,
but also on SME’s characteristics and how SME
perform/behave
Trade and investment liberalization and facilitation
Taking measures to facilitate financial access and enhancing
technology and innovative capability
ASEAN has its mechanism, ie. Strategic Action Plan - the
plan is not without weaknesses; but the process in ASEAN
allows for continuous refinement.
One way to accelerate SME development in ASEAN: improving
monitoring mechanism for the implementation of the SME
policy
4. Some Policy Implications
17
ASEAN is now adopting the similar (monitoring) process
taken by Western Balkan countries through their (OECD)
SME Policy Index
Having SME policy index in ASEAN facilitates and harmonize
policies, strengthens coordination of policy and programs, and
serves as instrument for capacity building
Guard the policy implementation within a robust policy
framework
The process (self- plus independent evaluation) ensures policy
makers to realize their weaknesses
The process (involves public consultation and discussion of the
evaluation results at regional level) allows countries to always
learn one from the other.
4. Some Policy Implications (cont.)
18
Economic Research Institute for ASEAN and East Asia