June 27 is celebrated as the World Micro, Small and Medium-sized Enterprises (MSME) Day. 97.3% of SMBs operating in Azerbaijan are micro, 1.9% are small and 0.8% are medium entrepreneurs.

About 90% of companies around the world are micro, small and medium businesses (SMBs). SMBs play an important role in providing employment in the world - around 60-70%. 50% of the world's gross domestic product (GDP) is produced by SMBs.

SMBs are viewed as engines of economic growth and social development. The contribution made by SMBs to sustainable and resilient development, providing employment, reducing poverty, stimulating entrepreneurship and innovation and achieving the Sustainable Development Goals is of great importance.

Pursuant to the resolution of the UN General Assembly, June 27 has been celebrated as the Day of Micro, Small and Medium-sized Enterprises around the globe since 2017. The objective is to raise public awareness about the contribution of SMBs to sustainable development and the economy.

As all over the world, SMBs in Azerbaijan are the driving force of the economy and the key to sustainable and resilient development.

Pursuant to the Decision of the Cabinet of Ministers of the Republic of Azerbaijan dated December 21, 2018, "Criteria for the breakdown of micro, small, medium and large businesses" was approved. Subject to the above criteria, a micro-entrepreneur is an entrepreneur with up to 10 employees and an annual income of up to 200,000 manats. An entrepreneur with number of employees between 11-50 and with annual income up to 3 million manats is viewed as a small entrepreneur. An average entrepreneur is an entrepreneur with number of employees between 51-250, and with annual income between 3-30 million manats.

Over 99% of entrepreneurs operating in Azerbaijan are SMBs. 97.3% of active SMBs are micro, 1.9% are small and 0.8% are medium enterprises. In our country, SMBs mainly operate in trade, agriculture, construction, processing, logistics, industry, tourism, public catering, transport and other fields.

According to the information from State Statistics Committee, the number of SMB entities increased by 45% in 2018-2021 and reached nearly 360 thousand. During this period, the share of SMBs in non-oil GDP rose from 23.5% to 26.6%.

Compared to 2021, the turnover of SMBs in 2022 increased by 19%, income grew by 61%, the criterion of more than 4,600 SMB entities went up.

In the medium-term socio-economic development strategy developed within the framework of "Azerbaijan 2030: National Priorities for socio-economic development", the transformation of small and medium entrepreneurship into the primary source of economic growth and employment in the country is identified as one of the strategic goals.

In our country, entrepreneurs, including SMBs, are protected by extensive state support measures.

The Small and Medium Business Development Agency of the Republic of Azerbaijan (KOBİA) operates to regulate the SMB sector, improve the provision of government services to businesses, protect the interests of SMBs, boost their access to knowledge and innovations, markets and finance, and provide a number of support and services to SMBs. So far, for the purpose of expanding the business knowledge of SMBs, SMB development centers of KOBİA has held over 3,000 free trainings for the benefit of approximately 40,000 SMBs, provided consulting services for about 5,500 entrepreneurs, and developed free business plans for some 800 SMBs.

Given the importance of starting a business and expanding existing activities, 21 internal market researches were conducted at the request of entrepreneurs, and 26 at the initiative of the Agency.

Nearly 100 "Startup" certificates were issued by KOBİA to support the digitization of SMBs and their innovative ideas, exempting them from profit and income tax on the income obtained from innovation activities for 3 years.

With the aim of supporting the improvement of the financial capabilities of SMBs, over 750,000 manats of grants have been provided to 39 SMB entities as part of the funding mechanism for their projects in the fields of education, science, research and support. 

To promote the access of SMBs to the markets, some 1300 SMBs participated in 50 exhibitions and fairs held in Azerbaijan and foreign countries free of charge. Within the scope of the support mechanism for SMB entities' access to trade networks provided by the agency, the sale of products of 25 entrepreneurs in different trade networks was ensured.

The number of SMB Houses where state-business and business-business services are provided to entrepreneurs in a single space has reached three, and the number of services provided to business entities in these centers has exceeded 300,000. In other large cities and regions of the country, as well as in the liberated territories, appropriate measures are being taken to establish SMB Houses.

Now, SMB Friends of the Agency, operating in 41 cities and districts of the country, support the establishment of new SMB entities and the development of existing businesses, support of their investment initiatives, and protection of entrepreneurial interests as part of state support measures. To date, some 370 field meetings and educational events have been held with the involvement of about 17,000 entrepreneurs as part of the SMB Friend mechanism.

So far, KOBİA has received about 1,500 applications from entrepreneurs seeking to start business and invest in the liberated territories, of which about 70% are applications from local business entities.

The Law "On the Development of Micro, Small and Medium Enterprises" approved by the President of the Republic of Azerbaijan on December 2, 2022 stipulates the forms and methods of promoting state support for SMB entities. Pursuant to this Law, as well as the priorities of the state in the field of entrepreneurship and the challenges regarding SMBs at the international level, support to SMBs will be further   provided.

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