On January 19, a press conference was held on the results of the activities of the Small and Medium Business Development Agency (KOBİA) for 2022.
Chairman of the Board of KOBİA Orkhan Mammadov delivered a speech about the work done by the Agency last year and long-term plans. He also stated that in 2022, KOBİA actively took part in the process of improving the business environment, legislation in the SMB sector and government services for business, as well as supported the establishment of new SMB entities and the development of existing SMBs through various mechanisms, promoted the protection of entrepreneurs' legal interests, access to markets, expertise and innovations, and financial resources.
Improving the business environment
It was noted that, last year, as part of the Agency's engagement in the formulation and regulation of the state policy in the field of entrepreneurship, 2 of the regulatory legal acts developed at the initiative of KOBİA were approved, 3 draft laws were agreed upon, and the Agency passed remarks and gave suggestions on 122 regulatory draft documents developed in various directions.
The "Model Regulation on clusters of micro, small and medium enterprises" was approved by the Decree of the President of the Republic of Azerbaijan dated December 15, 2022. The draft law "On the development of micro, small and medium enterprises" passed all three readings in the Milli Majlis. This law will regulate relations in the field of development of micro, small and medium entrepreneurship and determine the forms and methods of promoting the state support.
9 surveys were conducted with the involvement of more than 2,500 SMB entities covering the city of Baku and country regions to study the needs, challenges and suggestions of SMBs.
137 meetings with the participation of about 3,000 entrepreneurs and 7 public discussions with the participation of more than 550 entrepreneurs were organized respectively by the Agency and the Public Council under KOBİA.
Applications received by the Agency
In 2022, more than 6,000 citizens applied to the Agency, of which more than 1,200 were on the protection of SMB interests. 21.2% of more than 1200 applications were handled in a positive way within the framework of state-business and business-business platforms, 64.8% were given relevant recommendations by providing explanations on the requirements of the legislation, and 9% were assigned to other relevant institutions.
Services provided by SMB houses
In 2022, more than 73 thousand "G2B" (government-business) and "B2B" (business-business) services were rendered to entrepreneurs in Yevlakh and Khachmaz SMB houses. At present, more than 250 services are provided to entrepreneurs by state and private institutions in Yevlakh, Khachmaz and "Baku SMB House", which started operating on January 6 of this year. All in all, the level of satisfaction with the services provided by SMB houses stands at 98%. In the next stage, it is intended to establish an SMB house in the city of Ganja.
SMB Friend network expands
In 2022, 11 SMB Friends (in Zagatala, Aghdam, Aghjabedi, Aghstafa, Dashkasan, Goygol, Gakh, Khizi, Zangilan, Tovuz, and Gadabey) started operating. At the moment, the SMB-Friend network covers 38 cities and regions of the country. Operating as local representatives of KOBİA, SMB friends render prompt support and services to business entities on entrepreneurial activity.
Expertise and skills of SMBs increase
Last year, over 730 trainings were held by the SMB development centers included in the structure of KOBİA, more than 11,300 hours of consulting services were provided, and more than 9,700 SMBs, startups and people who intend to start a business benefited from these services. Likewise, in 2022, SMBs rendered free support to entrepreneurs in the development of more than 300 business plans. Last year, with the support of SMB Development Centers (SMBDC), the establishment of 30 new SMB entities in the agricultural and service fields, including Baku and the regions, was promoted.
In 2022, about 1,000 SMBs benefited from the online training platform, which consisted of 180 training videos. 46 businessmen and managers in 2022 and 526 entrepreneurs and managers in 2009-2022 enjoyed "The German-Azerbaijani Joint Program for Professional Development of Managers in the Azerbaijani Business Community" coordinated by KOBİA on the part of Azerbaijan and the German International Cooperation (GIZ) on the part of Germany.
Funding of SMB projects is underway
In 2022, in accordance with the relevant Decision of the Cabinet of Ministers, funding of SMB projects in the fields of education, science, research and support continued. 12 of the projects submitted to the 2nd grant competition held were financed. As a part of this support mechanism, the amount of financing for each project is up to 20,000 manats. At present, the projects submitted to the 3rd grant competition are being evaluated and the results will be announced in February. In total, more than 500,000 manats have been allocated to finance 26 SMB projects in the fields of education, science, research and support.
Benefits of "Startup" certificate
Last year, the Agency received 98 applications for a "Startup" certificate and 54 "Startup" certificates were awarded to micro and small enterprises (for agriculture and agribusiness, mobile application, fintech, online platform, production areas containing innovative solutions, e-commerce projects). The "Startup" certificate exempts SMB entities from profit and income tax on their income from innovation activities for a period of 3 years from the date of receipt of the certificate.
Support for access to markets for SMBs
In 2022, internal market research was conducted in 6 areas, and in 1 area at the initiative of KOBİA with regard to the requests of entrepreneurs. As a part of the internal market research mechanism, 80% of the cost of each internal market research conducted in relation to the application of a micro enterprise, 50% of the cost of the research conducted at the request of a small business entity was covered by the state. As a part of this support mechanism, medium business entities are encouraged to benefit from the free training and workshop, information support. The maximum amount of support is up to 20 thousand manats.
Support provided for the expansion of sales opportunities of SMBs
In 2022, more than 1,000 SMBs were supported at no cost to take part in 26 exhibitions and fairs (including 7 abroad and 19 in the country) to promote the access of micro, small and medium enterprises to internal and external markets and sales.
As a part of the support mechanism for the access of micro and small enterprises to trade networks, the Agency brought about favourable environment for the sale of the products of 24 business entities at 3 sales points in trade networks. It is worth highlighting that a micro business enterprise pays 20% of the rent for the sales space provided for its’ use, while a small business enterprise pays only 50%.
Potential activity of SMBs in liberated territories
As of January 1, 2023, 1339 applications have been received from entrepreneurs who intend to start a business in our liberated territories. 873 of the applications were submitted by local investors, and 466 were submitted by investors from 37 foreign countries. Majority of the applications are from foreign investors of Türkiye, Kazakhstan, Hungary and Russia. 90% of investment projects are local, and 10% are investment projects of foreign entrepreneurs. 36% of the applications for investment projects cover trade and services, 27% industry, 26% agriculture and another 11% construction, tourism, health, education and culture.
In 2022, the service window of KOBİA, which offers services for small and medium business enterprises in Agali village of Zangilan district, a sewing factory in line with the public-private sector partnership with the support of the agency, and a market were established with the support of KOBİA, TUIB and company of Türkiye, “Kolin” to meet the needs for daily necessities of the residents of Agali village.
In 2022, business trips to 15 countries were arranged to study the advanced practises in the field of support and services for SMBs, expand the relations of local SMBs and implement joint projects, find potential foreign partners, mediate between investors interested in cooperation and local entrepreneurs, 24 documents were signed with various partner institutions, 7 international events were held, and the Agency became a member of 2 international organizations in the field of SMBs.
Support for social entrepreneurship
Last year, KOBİA held various events and implemented projects together with relevant government agencies and the private sector to develop social entrepreneurship.
In 2022, as a part of the project "Social support on single mothers` well-being" together with partner institutions, the social enterprise in Shamakhi and Social Entrepreneurship and Employment Center has been launched in Masalli for persons belonging to vulnerable social groups, including members of martyrs' families, veterans to acquire relevant professional expertise. Moreover, the book "Development of social entrepreneurship in Azerbaijan" was published within the framework of the grant presented by KOBİA. As a part of the "Youth Business Workshop" project, a business plan was developed for 24 people who successfully completed business and professional training, and 6 people were already provided with the necessary equipment. Other stakeholders will be provided with appropriate equipment this year. 134 applications were received for the "Women's Power in Business" project conducted by the partnership of KOBİA, Rabitabank, ASK and Association for Development of Women Entrepreneurship in Azerbaijan (ADWEA). Trainings within the project will be commenced soon.
The questions from media representatives were addressed at the event.
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