On January 24, a press conference was held on the results of the activities of the Small and Medium Business Development Agency (SMBDA) for 2021.

Chairman of the Board of SMBDA Orkhan Mammadov made a presentation on the work done by the Agency over the past year and future plans.

Improving the business environment

It was noted that within the framework of participation in the formation and regulation of a unified state policy in the field of SMEs, 3 of the normative legal acts prepared at the initiative of SMBDA last year were approved, 4 were agreed, and the Agency provided comments and suggestions on 73 draft regulations.

Surveys with the participation of SMEs

15 surveys with the participation of more than 2,000 SMEs covering Baku and regions of the country to study the needs, challenges and proposals of SMEs (utilities, catering, construction permits, agriculture and horticulture, electricity connection, risks faced by SMEs and  their management, the use of digital technologies by SMEs, foreign trade operations, the study of training and qualified personnel needs, the study of clustering opportunities, the assessment of corporate governance, measuring the level of satisfaction of entrepreneurs in the business environment) were conducted.

Appeals received by the agency

In 2021, the Agency received more than 5,000 citizens' appeals, 1264 of which were related to the protection of SME interests.  26% of 1264 appeals were resolved within the framework of state-business and business-business platforms, 61% were given relevant recommendations explaining the requirements of the legislation, and 8% were directed to other relevant agencies.

Provision of services to SMEs in a single space - SME houses

In April 2021, the Small and Medium Business House (SME House) opened in Yevlakh, bringing the number of SME houses to two (including in the cities of Khachmaz and Yevlakh).

Last year, more than 50,000 G2B (government-business) and more than 3,000 B2B (business-business) services were provided to entrepreneurs by SME houses, which provide state and necessary business services to entrepreneurs in a single space. Thus, in Yevlakh SME House, 8 government agencies provide up to 150 services, and 7 private companies provide up to 100 services. In 2021, Yevlakh SME House provided 24,947 services to businesses, of which 91% are "G2B" and the other 9% are "B2B" services. The Khachmaz SME House has about 150 services from 9 government agencies and about 100 from 8 private companies. Last year, Khachmaz SME House provided 27,021 services to businesses, of which 97% were G2B and the other 3% were B2B services. Recently, two new services were launched at the Khachmaz SME House.  The level of satisfaction with the services provided by SME houses is 98%. 

Currently, work is underway to establish SME houses in Ganja and Baku.

At the same time, the "Regulations on the e-SME House portal” were approved by the Decree of the President of the Republic of Azerbaijan dated 09.08.2021.  Currently, work is underway to organize the activities of the portal.

SME friendly network

In 2021, 7 SME friends started operating in Shirvan, Goychay, Sabirabad, Salyan, Ismayilli, Tartar and Astara regions.  Currently, the SME-friendly network covers 27 cities and regions of the country.  SME friends provide on-site operational support and services to businesses related to entrepreneurship.

Improving the knowledge and skills of SMEs

In order to provide entrepreneurs with access to knowledge and skills in business, in 2021, 17 SME Development Centers (SMEDCs) were launched. Thus, the number of SMEDCs in the country has reached 21. In 2021, a total of about 1,600 training sessions were conducted by SMEDCs, more than 17,000 hours of consulting services were provided, which were used by about 23,000 SMEs, startups and those wishing to start a business. All services provided by SMEDCs are free of charge.  SMEDCs supported the creation of 76 new SMEs in 2021. 

In addition, an online training platform (free of charge) consisting of 180 training videos has been launched, which has been used by about 500 people to date.

The implementation period of the "German-Azerbaijani joint program to improve the skills of managers in the business community of Azerbaijan", coordinated by SMBDA on behalf of Azerbaijan and the German Society for International Cooperation (GIZ) by Germany, has been extended for another 3 years.  29 entrepreneurs in 2021, and a total of 480 entrepreneurs and managers in 2009-2021 benefited from the program.

Grant competitions

In accordance with the relevant decision of the Cabinet of Ministers in 2021, funding for SME projects in education, science, research and support has begun.

The first grant competition included 329 projects, 15 of which were funded (in the areas of fuel saving, development of various devices and software, recycling, waste-free production, obtaining international certificates and patents, women's employment).

Under this support mechanism, the maximum amount of funding for each project is up to 20,000 manat.  In November 2021, the second grant competition in science and support was announced (200 projects were submitted) and the results will be announced in February 2022.

Startup certificate

The Cabinet of Ministers approved the "Criteria for determining the startup" by the decision of 29.01.2021. Starting from May last year, micro and small businesses have been issued Startup certificates. Last year, the Agency received 66 applications for the Startup certificate, and 8 meetings of the Expert Council were held. 

So far, micro and small businesses have been issued 32 Startup certificates (for agriculture and agrarian business, mobile applications, fintech, online platforms, production areas with innovative solutions, e-commerce projects).

The Startup Certificate exempts SMEs from income and income tax on their income from innovation activities for a period of 3 years from the date of receipt of the certificate.

Supporting SMEs' access to markets

In 2021, on the basis of applications from entrepreneurs in 10 areas (production of carbonated and non-carbonated water, lemonade, soap, disposable cardboard and plastic products, potato free, access to domestic sales channels of almonds, production of decorative items, sale of auto parts, medical and  social services), and at the initiative of SMBDA in 4 areas (production of semi-finished boards from the body of the cotton plant needed in the furniture industry, the establishment of a fiberless cotton seed processing plant, the establishment of a plant for the preparation of food oil products from cottonseed, sunflower and corn, consumption of mobile coffee and by-products) domestic market research was conducted. 

Under the internal market research mechanism aimed at stimulating the competitive production of SMEs, the state covered 80% of the cost of each domestic market research conducted on the basis of the application of a micro-business entity, and 50% of the cost of research on the application of a small business. Medium-sized businesses can benefit from free training and seminars and information support under this support mechanism. The maximum amount of support is up to 20,000 (twenty thousand) manats.

In order to support the access of micro, small and medium enterprises to domestic and foreign markets, sales, the participation of more than 30 SMEs in 6 exhibitions and fairs (2 abroad and 4 in the country) in 2021 was provided free of charge. Within the framework of these exhibitions, SMEs held more than 70 bilateral meetings on expanding sales opportunities and new partnerships. With the support of SMBDA, the kobmarket.az portal was launched in 2021 to expand the sales opportunities of entrepreneurs, especially micro and small businesses. Entrepreneurs registered on the portal have already created more than 90 online stores, about 1,500 products (food, equipment, household appliances, cleaning, repair and construction products, clothing, souvenirs, handicrafts, accessories, books and stationery, music  tools, etc.) were posted. 

The Decree of the President of the Republic of Azerbaijan dated 01.12.2021 approved the "Rules to support the expansion of sales of products produced by micro and small businesses in trade networks."

Starting from January 21,  the accepting micro and small businesses applications to support access to trade networks has started. Support will be provided by SMBDA.  The support is available to micro and small entrepreneurs. As part of this support, the size of the point of sale to be used by the entrepreneur in the trade facility is 50 cm, and the period of placement of products in the sales area is 3 months. The micro-business entity will pay 20% of the rent for the sale area, and the small business entity will pay 50%.

Potential opportunities for SMEs to operate in the liberated areas

Immediately after the 44-day war, applications from local and foreign businesses interested in setting up businesses in the liberated territories began to be received, and the process is still ongoing. So far, SMBDA has received 945 applications from entrepreneurs wishing to set up businesses in the liberated territories. Of these, 446 applications are related to investment projects, and 499 are related to the implementation of other works and services (mainly contract-based).  27% of applications cover construction, 27% trade and services, 21% industry, 18% agriculture and 7% tourism, health, education, culture, transport and logistics. The public-private partnership (PPP) model is aimed at the wide application in the construction work carried out to restore the liberated territories and re-integrate them into the economic value chain. within the opening ceremony of Fuzuli International Airport in 2021 the Presidents of Azerbaijan and Turkey were informed about the activities of the souvenir production enterprise and greenhouse established in Jojug Marjanli village of Jabrayil region. More than 40 villagers will be employed in the souvenir production enterprise and greenhouse farms established with the support of the Jojuq Marjanli Development Foundation, SMBDA, TUIB and TIKA. 

SMBDA was also instructed to organize the process of assessing the damage caused to entrepreneurs during the 44-day war. In total, 294 business entities were compensated in the amount of about 4.7 million manat.

International cooperation

In 2021, 12 memorandums of understanding were signed with various partners to study best practices in SME support and services, expand local SME relations and implement joint projects, find potential foreign partners, and mediate between investors and local entrepreneurs interested in cooperation. Business visits were organized to 9 countries.  Two international events (Azerbaijan Investment and Culture Summit, 25th International Business Forum (IBF)) were organized by the Agency in Baku.

SME Volunteers

In 2021, about 150 young people, and so far more than 360 young people have been involved in volunteering at SMBDA.  Last year, 2 young people who were "SME volunteers" and a total of 11 young volunteers were employed by the Agency.

Support for social entrepreneurship

In order to develop social entrepreneurship, SMBDA last year implemented various events and projects together with relevant government agencies and the private sector.

So far, including 2021, more than 400 citizens have benefited from the Agency's support and services to join the self-employment program.

At the same time, with the participation of low-income families in the "Prosperous Absheron" project, support for their additional income and development of family farms was continued. In order to develop women's, youth and disabled entrepreneurship, the agency together with partner organizations launched projects such as "My School", "Business Workshop", "Support for Disabled Entrepreneurs", organized trainings and various events for them (II Forum of Young Entrepreneurs, etc.). 

In order to support the development of employment and entrepreneurship in the regions, 15 rural guest houses were commissioned in Ismayilli region in 2021 within the project "Development of entrepreneurship and self-employment in rural areas" jointly implemented by SMBDA, the State Employment Agency and the State Tourism Agency. Thus, about 40 women and young people from 15 families were employed.  The project will be continued in 2022 in Guba, Gusar, Khachmaz, Sheki, Zagatala, Gakh, Lankaran, Astara and Lerik districts.

Another 50 village guest houses will be created within the project.

In the end, the questions of the media were answered.

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