Iskra Mihailova: ‘’SMEs will be essential partners in making positive change’’

Renew Europe
3 min readMay 25, 2022

In the Group SME Taskforce, I am representative of DEVE committee and I consider that it is necessary to answer the question from the perspective of what needs to be done for SMEs in developing countries, as well as European ones operating in developing countries.

In the developing countries, SMEs account for 90 percent of the private sector and create more than half of the jobs in their corresponding economies. In Africa, SMEs provide approximately 80 percent of jobs across the continent, representing an essential driver of economic growth.

I call on the EU to support small and medium-sized enterprises and start-ups in developing countries, to recognise that such companies will be essential partners in making positive change and will enable sustainable development and a way to achieve all this will be to assist in creating SMEs help portals in developing countries, which will serve as a trusted resources, that will permit SMEs to navigate and find the information and support they need, suited to local contexts and local opportunities;

To encourage the incorporation of the experience, achievements and potential of European micro, small and medium-sized enterprises (SMEs) in EU’s programs dedicated to supporting developing countries as they could share their knowledge and best practices, as well to assist with the provision of entrepreneurship training in developing countries;

I believe that the EU and the Member States should share their experience in building capacity to develop and use innovation, technology and scientific research, to encourage SMEs in developing countries to fully utilise their technology and innovative products, processes or methods;

I also think we need to encourage the Commission to increase efforts to offer qualified consulting services with the purpose to help innovative enterprises at the different stages of the research and innovation process, as well as to provide technical assistance and raise awareness about the significance of the new opportunities offered by new technologies and digitalisation and to display the benefits of RD&I as an engine for economic competitiveness and prosperity, and as a means to achieve resilience and technological sovereignty, as it will allow SMEs to delineate new priorities, to improve their strategic steering and will empower these companies to boost their economic gains and to create new employment opportunities;

To encourage and support businesses, which are founded by women and women entrepreneurship. An important aspect here is bringing women-owned businesses into the supply chain. According to recent estimates, the funding gap for women-owned businesses in Africa is over $2 trillion and a lot of steps need to be taken to make sure that these entrepreneurs are given equal chances to take part in the market.

I consider the new NDICI as important instrument, which contains an investment framework for external action financed from the geographic pillar in order to raise additional financial resources for sustainable development for the public and private sector. It consists of the European Fund for Sustainable Development (EFSD+) and the External Action Guarantee, with fire-power of €53,45 billion. Among other specific goals, the guarantee will serve to support micro enterprises and SMEs and support decent job creation. I call on the Commission to ensure that the EU supports those countries that need it most, with particularly addressing investment needs in the countries experiencing fragility or conflict, least developed countries, highly indebted countries, and regions with critical infrastructure and connectivity needs.

Due to their size, SMEs in the developing countries have limited access to finance and suffer from cumbersome bureaucratic procedures in setting up, operating and growing a business, as well as from poor state of infrastructure, lack of effective institutional structures and corruption. The removal of these constraints is a challenging but essential task calling for EU’s holistic SME support in the developing countries.



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