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SMEs in the EU: Challenges and Opportunities


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Presentation by Andre Kilesse, IFAC SMP Forum June 2013

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SMEs in the EU: Challenges and Opportunities

  1. 1. Standing for trust and integritySMEs in the EU:Challenges and OpportunitiesAndré Kilesse, FEE PresidentIFAC SMP Forum, Kampala, Uganda5 June 2013
  2. 2. Standing for trust and integrity2FEE and its Members 45 professional institutes of accountants 33 European countries, including all 27 EU
  3. 3. Standing for trust and integrity3Representing the European Profession FEE is a Recognised Regional Organisation of IFAC Combined membership of more than 700.000 professional accountants In public practice, small, mid-tier and large accountancy firms,businesses of all sizes, public sector and education Providing a large range of services: audit and other assurance, taxservices, financial and other advisory services Committed to the public interest and the highest ethical principles Contributing to a more efficient, transparent, and sustainableEuropean economy
  4. 4. Standing for trust and integrity4What is an SME in the EU? Defined in EU law: (EU recommendation 2003/361) SME comprises of Medium-Sized, Small and Micro enterprises The main factors determining whether a company is an SME are: number of employees ; and either turnover or balance sheet total.CompanycategoryEmployees Turnover or Balance sheettotalMedium-sized < 250 ≤ € 50 m ≤ € 43 mSmall < 50 ≤ € 10 m ≤ € 10 mMicro < 10 ≤ € 2 m ≤ € 2 m
  5. 5. Standing for trust and integrity5EU SMEs in numbersSMEs:constitute 99.8 % of all EU companies (Source: ESBA Press Release 11 January 2013)• micro businesses 92.2 %• small businesses 6.5 %• medium-sized businesses 1.1 %contribute over 50% of total value added in the non-financial businesseconomyprovide 67.4 % of all private sector jobsprovided 80% of all new jobs from 2006-2011 (Source: Structural Business Statistics (Eurostat)difficult access to finance is among top concerns (Source: SMEs access to finance Survey 2011) In 2011 about one third of the SMEs did not get the finance they had planned for.• 11% of the applications were rejected• 17% received less than they applied for• 4% declined the loan offer from the bank because they found the conditions unacceptable
  6. 6. Standing for trust and integrity6Challenges for EU SMEs Administrative and regulatory burden Access to finance Taxation Lack of skills Access to public procurements Unfair/too strong competition Labour law Access to Single Market Access to EU programmes Late payments Access to international markets Access to information and advice Instability world economy/energy costs SME definition(Source: Small Business Act for Europe Report on the results of the open consultation 22/04/2008)
  7. 7. Standing for trust and integrity7Opportunities for EU SMEs - EU ActionsSmall Business Act (SBA) (2008):first comprehensive EU SME policy framework, including legislative proposals, which aims to:Design rules according to the Think Small First principle‘ (lighten administrative burdens)Facilitate SMEs access to fundingHelp SMEs to get most out of the EUs Single MarketCreate an entrepreneurial environmentEuropean Commission activities based on SBA (since December 2011):SME Finance Forum (Periodic stakeholder meetings on strategy; FEE is invited to those)Action Plan to improve access to finance for SMEsPrograms based on this Action Plan Horizon 2020: combine all research and innovation funding Program for Competitiveness of Enterprises & SMEs (COSME) (planned budget of€2.5bn).providing SMEs with flexible financial instruments (such as EIB loans)
  8. 8. Standing for trust and integrity8European Small Business PortalThis portal gathers all information the EU provides on, and for, SMEs, ranging from practical adviceto policy issues.
  9. 9. Standing for trust and integrity9Access to EU financeThis site helps SMEs to apply for finance supported by the European Union.
  10. 10. Standing for trust and integrity10Opportunities – FEE ActionsSMEs/SMPs are a strategic priority! Therefore FEE has taken the following actions:Set up the SMP Forum, as the working structure to: connect SMP/SME related interests on a national level to those on EU level integrate SMP/SME perspective in all FEE activitiesOptimise FEE’s contribution, therefore close cooperation with: European Commission FEE Members (professional accountancy organisations)• Knowledge building & sharing• Best practices• Innovation tools (CPA Ireland app for SMEs to track companyperformance)Organized events for wide range of stakeholders: 4 FEE Access to Finance Roundtables IFAC-FEE SME Regulation Roundtable
  11. 11. Standing for trust and integrity11FEE Access to Finance Roundtables
  12. 12. Standing for trust and integrity12Opportunities – Expertise of SMPsEnlisting SMPs as their preferred business advisors, to: help entrepreneurs finance and manage their business; enhance their trading partners’ trust expand their operations seize the opportunities of the internal market properly apply regulation and discharge their obligations solve the daily problems of SMEs across Europe and INNOVATE
  13. 13. Standing for trust and integrity13SMEs Turning Opportunities into Actions Remain innovative (crowd funding, use innovation platforms) Seek (alternative) access to finance Improve financial knowledge Increase cross border operations
  14. 14. Standing for trust and integrity14Standing for trust and integrityVisit us @