SME Development National Center of Armenia Karen Gevorgyan Deputy Executive Director SME Development National Center of Armenia Enterprise Europe Network Correspondence Center in Armeniaevorg

“Small and Medium Entrepreneurship Development National Center” Fund (SME DNC of Armenia) Established by the decree of the Government of Armenia in 2002. SME DNC of Armenia is the first national structure in Armenia called to implement state support to small and medium entrepreneurship (SME) and programs directed to development of the sector, as well as to ensure a dialogue between small and medium enterprises, government and other structures. The Board of Trustees is the supreme governing body of the SME DNC of Armenia, the members of which represent several government structures and NGOs advocating the interests of SMEs. The Board is headed by the Minister of Economy.

Regional network of the SME DNC of Armenia 10 regional branch offices 3 representative offices

SME THRESHOLDS IN ARMENIA Headcount: Annual Work Unit (AWU) MEDIUM SMALL MICRO Enterprise category Annual turnover balance sheet total < 250 < 50 < 10 ≤ 1500 mln AMD Eq. to 3 mln Euro ≤1000 mln AMD Eq. to 2 mln Euro ≤ 500 mln AMD Eq. to 1 mln Euro ≤ 100 mln AMD Eq. to 200 thousands Euro

Distribution of SMEs by size, 2012

Distribution of SMEs by regions

SME support directions Information and Analytical Consulting Training (Start-up business support program) Financial Support Local Economic Development Business Internationalization (EEN Activities)

Information & Consulting Awareness raising of SMEs on business legislation and recent changes Consultancy on taxation issues and customs procedures, Licensing, Standardization, Certification, Financial Management and Accounting , etc. Seminars, workshops, trainings Publication of Business Manuals, Guides, Reference books

Goals and Objectives: Start-up Business Support Program establishment of new SMEs and workplaces in the marzes of Armenia, Support in realization of new business initiatives, upgrading business knowledge and skills of start-ups, facilitating access to finance.

Program Phases Selection of participants and group formation Decision making on CEFE organization Preparatory stage Presentation and evaluation of Business Plans Financial Support Main training Coaching: Brain pools Monitoring and evaluation

Main topics Business idea development Marketing Management Production planning & net cost calculation Financial planning & cash flows How to register a legal entity in Armenian Basic Accounting Tax Legislation Duration is 80 hours As a result of the training business ideas turn to realistic and sustainable business plans

FINANCIAL SUPPORT Credit Amount Maximum 5 mln AMD , equivalent to 20000 USD Annual interest rate 10% Duration Maximum 5 years Collateral 100% Guarantee provided by SME DNC of Armenia Target group Start-up businessmen Participants presenting most realistic business plans get financial support and remain under the support umbrella of the SME DNC of Armenia on the way of their growth and development

Financial Support Loan Guarantees to operating SMEs Loan Guarantees to start-ups and operating SMEs Main priorities: SMEs operating in manufacturing and services sectors SMEs SMEs operating in the regions with low level of economic activity (close to the border and countryside settlements, disaster zone, former industrial and scientific sites) Import substituting, exporting SMEs and those with export potential SMEs introducing and using new technologies and innovations Loan Guarantees to operating SMEs Maximum Duration – 5 years Guarantee - up to 70% of loan amount, but not more than 15 mln AMD (36000-37000 USD)

Local Economic Development Economic mapping of the communities PACA exercises Identification and support in implementation of reviled economic initiatives Sector Specific Business Trainings for Beneficiaries Technological Trainings for Beneficiaries Small Grants in a for of Equipment and Infrastructure Set Up Access to Market Continuous Monitoring

Business Internationalization Enterprise Europe Network Business Cooperation Center in Armenia since 2008

Enterprise Europe Network More than 50 countries 600 partner organisations 4000 experienced staff www.een.ec.europa.eu

The WEB site of SME DNC www.smednc.am

The objectives of the Network Increasing of awareness of European SMEs on business environment of Armenia and cooperation opportunities. Improvement of business skills of Armenian businessmen for doing business in European market. Formation of internationally competitive SMEs and increasing of trans boundary cooperation opportunities of SMEs by provision of internationalisation and innovation support. Development of research and innovation capacities of Armenian SMEs promoting the trans boundary technology cooperation.

Main activities of the Network Promotion of the Network in local level and increasing of awareness and consciousness on Network functions, supporting the Network common trademark and culture. Provision of information and practical consultancy on market opportunities, as well as on European laws and policy corresponding to the sphere of activity of the companies. Provision of informative and practical consultancy to European SMEs on internal market demand, legislation, importing/ exporting activities, clarifications on certain problems, activities or suppliers of different spheres. Searching of possible partners for Armenian SMEs in business and technology database, as well as in research projects’ database using the searching corresponding tools of the Network and presenting Expressions of interests.

Main functions of the Network Provision of support to SMEs on negotiations and cooperation agreements’ signing. Implementation of technology audit in client companies which are acting in the priority spheres of Armenian economy, assessing their technology by the view of using of new technologies’ presentation service. Trans boundary cooperation and/or visit to company in foreign countries, or ensuring of participation in brokerage events organized by other Network partners. Providing the information on FP7 projects as cooperating with the National Academy of Science of Armenia.

SME DNC web-site www.smednc.am News and Events Subscription

BCD Business Cooperation Database Business/technology cooperation profiles www.smednc.am

Description of Armenian companies included in EEN partnership opportunity database

Business profiles Code: BOBE20140716001 Belgian company specialized in the manufacture of pharmaceutical products focusing on women’s health, fertility, family planning and disease prevention is looking for major distributors in order to penetrate new markets. Code: 20101015009 A Romanian IT company supports the full project lifecycle, from application delivery and testing through to support, hosting and managed services for some of the world's leading financial services, telecommunications, sports and media companies. The company is looking for trade intermediary services or subcontracting/ outsourcing agreement.

Technology profiles Reference: TOPL20140714001 A Polish IT company has developed a computer algorithm for optimal operation of the order capacity. The SME is looking for partners or investment to further develop and commercialize their solution. The company would like to sign a license agreement or technical cooperation agreement. Reference: 12 GB 4704 3PLF SME in North East England wants to develop an innovative nursery product for babies and toddlers and seeks manufacturer of natural, organic fabric for use in nursery products with a majority of certified-organic natural fibers (cotton, wool, silk, linen). The SME are looking to establish a license (commercial) agreement or joint further development.

Brokerage events Armenian “Researchers for bioheating solutions” has participated in “Let's connect: business & innovation - Biomass and Energy Efficiency in Buildings Brokerage Event” in February 2014. Armenian “E-works” IT company has participated in brokerage events within “CEBIT” Conference in Hannover, Germany in March 2014. The information on “Polagra food” international event has been disseminated among Armenian companies in March 2014. In the result 1 Armenian company named “Bee city” has participated in B2B meetings.

SME DNC of Armenia has supported the Italian EEN partners from Milan “EEN SIMPLER” for finding a partner for implementation of R&D projects in medical sphere. The Partnership Agreement between Italian “Kos Genetics” company and Armenian “Preventive cardiology center” has been signed in December 2010. The visit of Spanish company to Armenia (which is interested in establishment of company in Armenia) has been organized within the framework of cooperation with Chamber of commerce and Industry of Toledo. Within the cooperation framework with “Business Innovation Centre of Trento”, the SME DNC of Armenia has supported the Armenian IT company to find correspondent partner. As a result the Partnership Agreement between Italian “Editel” and Armenian “E-works” IT companies has been signed in December 2010.

Network data 200+ Armenian profiles of Armenian SMEs have been inserted in the Network database 600+ Expressions of interests have been received 450+ Expressions of interests have been sent 3000+ Companies periodically are receiving cooperation offers and other informative materials 12 Partnership Agreements have been signed

Cooperation with stakeholders Union of Manufacturers and Businessmen (Employers) of Armenia (UMB(E)A) Union of IT enterprises Republican Union of Employers of Armenia (RUEA) Ministry of Economy of the RA EU Advisory Group to RA Chamber of Commerce and Industry of the RA

Thank You For Your Attention Deputy Executive Director Karen Gevorgyan Deputy Executive Director Fund “Small and Medium Entrepreneurship Development National Center of Armenia” Tel.: (374 10) 54 16 45 Fax: (374 10) 54 16 42 E-mail: kgevorgyan@smednc.am, info@smednc.am URL: www.smednc.am