2. EMN 4 th Annual Conference Berlin, April 07 Maria Teresa Zappia EBRD - Group for Small Business

3. EBRD'S EXPERIENCE IN NEW EU COUNTRIES Examples from Romania and Bulgaria: ProCredit Bank model Working with specialised Microfinance Institutions Downscaling with local commercial banks

4. LESSONS LEARNT Subsides are needed to attract more commercial banks to enter the microfinance market, but these should be ring-fenced (TA for capacity building). Importance of demonstration effect (e.g. ProCredit Macedonia). Long-term commitment is crucial to succeed in the microfinance/SME sector, and significant start-up investments are required.

5. RECOMMENDATIONS Facilitate close cooperation with private sector actors to ensure long-term sustainability (via syndications and equity partnerships). Facilitate the integration of different types of financial intermediaries (e.g. guarantees for local currency financing). Reduce subsidies distorting the market.