The OECD Brasilia Action Statement

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The OECD Brasilia Action Statement for SME and Entrepreneurship Financing calls for innovative policy measures to improve access to finance for entrepreneurs and SMEs

On the invitation of the Brazilian Government, the OECD Global Conference on Better Financing for Entrepreneurship and SME Growth, took place in BRASILIA on 27-30 March 2006. Convened in the framework of the OECD Bologna Process(1), the meeting brought together the key stakeholders – Small and medium-sized enterprises (SMEs), the financial community, and government participants at senior level – from OECD member countries as well as from non-member economies.

The Conference assessed to what extent SMEs are held back by constraints that give rise to a costly “financing gap”. Taking stock of current facts, practices and issues, it proposed ways forward to improve statistical data and valuation methods, and to identify and diffuse innovative solutions for SME financing, spanning the role of markets, governments and international organisations.

The Conference stressed the importance of better access to finance especially in early stages of firm formation, and for innovative, potential high-growth firms. SMEs are agile and flexible but also vulnerable. Policymakers need to make sure that the needs of SMEs are understood and they should work to remove red tape, regulations and taxes that hamper SMEs’ access to financing.

On debt and credit financing, the Conference stressed the importance of competition among lending institutions. Government guarantee schemes can help boost lending to SMEs, but measures are needed to promote better risk sharing between lenders and SMEs. Knowledge exchange can be strengthened via private sector bureaus. Also, micro-credit and micro-finance schemes play an important role in developing countries and efforts should be made to boost their effectiveness and diffusion.

On risk capital, there is a need to enhance awareness, educate and communicate broadly the value of equity financing. Regulations and taxes should ensure neutrality between different kinds of risk capital. Orderly, equitable and transparent exit routes need to be safeguarded for investors. But there is also a need of removing obstacles currently hampering venture capitalists and business angles, and to promote “business angel networks”.

Participants also call upon the OECD to take the lead in establishing international benchmarks to facilitate comparisons of the relative performance of markets in providing financing to SMEs and entrepreneurs and to shed light on outstanding financing gaps and issues.

Finally, participants express their wish to establish an OECD Global Forum for Tripartite Dialogue convening Governments, the Financial Community and SMEs in OECD and non-OECD economies, to review progress in policy to strengthen SME and entrepreneurship financing.

Click here for the OECD Brasilia Action Statement.

Click the links below for presentations & speaker's papers:

OFFICIAL OPENING

The Role of SME Policy and the Current State of SME Finance in Japan

Takao Suzuki, Chairman, Organization for Small and Medium Enterprises and Regional Innovation Japan (SMRJ)

PLENARY KEYNOTE SESSION: “THE SME FINANCING GAP: THEORY AND EVIDENCE

Keynote Paper “SME ACCESS TO FINANCING: ADDRESSING THE SUPPLY SIDE OF SME FINANCING”

Mr. André Laboul, Head of Division, Directorate for Financial and Enterprise Affairs - OECD and Mr. John Thompson, Consultant, Centre for Entrepreneurship, SMEs & Local Development, OECD,

The Financing Gap for SME’s in Brazil

Mr. Roberto Luis Troster, Chief Economist of Febraban, Brazilian Federation of Banks Brazil

“Finland as a Knowledge Economy Elements of Success and Lessons Learned Overview”

Mr. Jorma Routti Partner CIM Funds Finland; Edited by Carl J. Dahlman Jorma Routti Pekka Ylä-Anttila 4. Mr. Andrzej Kaczmarek Under Secretary of State Ministry of Economy Poland “Polish Entrepreneurs: Access to Capital “

Workshop A: CREDIT FINANCING FOR SMEs: CONSTRAINTS AND INNOVATIVE SOLUTIONS
Session 1
The Institutional, Legal and Regulatory Framework and its Impact on SME Financing in India

Sumant Batra, Managing Partner, Kesar Dass B. & Associates.

Fact Sheet

Mr. Ladislav Dvořák, Česká spořitelna (Czech Savings Bank) Director of Special Programmes Department Czech Republic

“Micro, Small and Medium Enterprise Credit: Constraints and Innovative Solutions”

Mr. Matthew Gamser Program Manager SME Finance International Finance Corporation
World Bank Group paper by: Matthew Gamser and Jessica Schnabel, International Finance Corporation

“The access of micro and small enterprises to credit in Brazil”
José Mauro de Morais, Expert, Applied Economic Research Institute IPEA, Ministry of Planning, Brazil, Applied Economic Research Institute – IPEA/Diset.

Mr. José Mauro Morais, Expert, Applied Economic Research Institute, IPEA, Ministry of Planning, Brazil Credit Support Programs for Micro, Small and Medium Enterprises in Brazil

6.”Credit Allocation and Efficiency: The Case of Japan” Iichiro Uesugi, Research Institute of Economy, Trade and Industry,

7. Iichiro Uesugi Koji Sakai‡ Guy M. Yamashiro, Effectiveness of Credit Guarantees in the
Japanese Loan Market

Session 2

1. Mr. Bernd Balkenhol, flyer, “Evaluations of Guarantee Funds” Director of the Social Finance Programme, International Labour Organisation (ILO)

2. Barbara Bartkowiak
Polish Association of Loan Funds, Polish Entrepreneurs Foundation, POLFUND Loan Guarantee Fund
Poland, “SME Loan and Guarantee Fund System in Poland: Lessons Learned and Perspectives”

3. “SMEs’ Financing Gap and Related Policy Efforts- The Case of Korea” Cho, Young-Sam, Research Fellow, Korea Institute for Industrial Economics & Trade

4. “Financing to small enterprises: case study of the Internal Credit Insurance”Fernando Nogueira da Costa, Vice-president of CAIXA ECONÔMICA FEDERAL, Brazil

5. Development of Hungarian SME Financing Programmes, Tamas LESKO, Deputy Head of Department, Ministry of Economy and Transport, Hungary, Department for SME Development,

6. Osamu Tsukahara, Managing Director, Japan Finance Corporation for Small and Medium Enterprise (JASME),

7. Salvatore Zecchini and Marco Ventura, “THE ROLE OF STATE-FUNDED CREDIT GUARANTEE SCHEMES FOR SMES: ITALY’S EXPERIENCE”

Workshop B: EQUITY FINANCING FOR SMEs AND THE ROLE OF GOVERNMENT
Session 1
“EQUITY FINANCING FOR SMEs : The Nature of the Market Failure”
Jean-Noel Durvy
Head of Unit, Financing SMEs, Entrepreneurs & Innovators, DG Enterprise and Industry, European Commission

The Financing Gap of Micro, Small and Medium Business in Brazil,ABDI – FGV/EAESP Research Paper
Mr. Claudio Vilar Furtado,
Executive Director of the Center for the Study of Private Equity and Venture Capital of FGV-EAESP, Editor, Brazil

For more information, please contact SME.Division@oecd.org

Press contact: Carole MOINARD tel : +33145241358 ; mail: carole.moinard@oecd.org

(1) The OECD Bologna Process on SME and Entrepreneurship Policies is a dynamic political mechanism which:

Fosters the entrepreneurial and SME agenda at the global level through extended analytical work;
Promotes high-level dialogue on SME and Entrepreneurship policies worldwide; and
Encourages co-operation between OECD countries and non-member economies, other international organisations/ institutions, and non-governmental organisations in the field of SMEs and entrepreneurship.