SMB

We believe Azerbaijan’s socio-economic development is closely linked with entrepreneurship and its future development!

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Today International Day of Micro, Small and Medium-sized Enterprises is marked 27.06.24

In Azerbaijan, 96.8% of entrepreneurs are micro-enterprises, 2% are small enterprises, and 0.8% are medium-sized enterprises.

According to the United Nations General Assembly resolution, June 27 is celebrated as the International Day of Micro, Small and Medium-sized Enterprises.

Established in 2017, this day aims to highlight the contribution of micro, small, and medium-sized businesses (SMBs) to sustainable development and the economy, as well as to inform the public. SMBs are considered engines of economic growth and social development. They make a significant contribution to sustainable and long-term development, employment generation, poverty reduction, entrepreneurship and innovation stimulation, and the achievement of Sustainable Development Goals.

Approximately 90% of companies worldwide account for SMBs. SMBs provide 60-70% of employment and contribute 50-60% to GDP globally. In Azerbaijan, SMBs are also the driving force of the economy and key to sustainable and lasting development. In accordance with the decision of Cabinet of Ministers dated December 21, 2018, new criteria for classifying micro, small, medium, and large entrepreneurial entities were approved. According to these criteria, micro-enterprises are business entities with up to 10 employees and annual revenues up to 200,000 manats. Small enterprises are those with 11 to 50 employees and annual revenues from 200,000 to 3 million manats. Medium-sized enterprises are entities with 51 to 250 employees and annual revenues from 3 to 30 million manats. In Azerbaijan, 99.6% of active entrepreneurs are SMBs. Among them, 96.8% are micro-enterprises, 2% are small enterprises, and 0.8% are medium-sized enterprises. SMBs in our country are mainly engaged in trade, agriculture, construction, processing, logistics, industry, tourism, catering, transport, and other sectors. Over the past 5 years since the introduction of new criteria for classifying SMBs, the number of SMBs has increased by 54%. During this period, the share of SMBs in the value added of the non-oil and gas sector has increased from 23.5% to 27.2%. The value added created by SMBs has risen by more than 74%, reaching approximately 17.2 billion manats. The number of SMB employees has gone up by 31% during this period, exceeding 370,000 people. According to statistics from the previous year, the total turnover of the SMB sector in Azerbaijan amounted to 43.8 billion manats, which is 13% higher compared to the same indicator in 2022. In recent years, there has been positive dynamics in the number of companies expanding their criteria. In 2022, there were about 4,600 such companies, and in 2023, their number exceeded 5,300. The growth of companies is accompanied not only by an increase in their turnover but also by the expansion of technical capabilities, the introduction of progressive business processes, and increased productivity. This plays an important role in enhancing the country's economic resilience and diversification. Entrepreneurs in our country, including SMBs, benefit from extensive public interventions. This stimulates the creation of new SMBs across various sectors of the economy and the expansion of existing SMB activities, transforming micro-enterprises into small, small enterprises into medium, and medium-sized enterprises into large business entities. Support and services for SMBs cover the entire process from establishment of business to development, including various tax and customs privileges, infrastructure, and other institutional support measures, preferential loans, and subsidies.

Besides, to improve state policy in this sector, boost the effectiveness of implemented activities, and ensure institutional support, the Small and Medium Business Development Agency (KOBİA) was established that supports the creation of new SMBs and the development of existing businesses through various tools and services. The needs and problems of SMBs are always in the spotlight, regularly studied through industry meetings, forums, and surveys within the framework of public-private cooperation platforms.

Based on the information obtained, changes are made to legislation, additional benefits are introduced, and new support mechanisms are implemented.

In the medium-term socio-economic strategy developed under "Azerbaijan 2030: National Priorities of Socio-Economic Development," the development of small and medium-sized enterprises is identified as one of the strategic goals aimed at making SMBs the main source of economic growth and employment in the country.

Additional support for SMBs will last in accordance with the Law "On the Development of Micro, Small and Medium Enterprises," the resolution of the Cabinet of Ministers dated February 5, 2024, providing additional support to SMBs in priority sectors of the economy, as well as state priorities in the field of entrepreneurship and international challenges related to SMBs.

In the coming years, more attention will be paid to the digitalization of SMBs, increasing their role in transitioning to a "green economy," and organizing the activities of SMBs in the liberated territories.