Czechia performs below the EU average when it comes to SME access to bank loans, credit guarantees and equity finance. Credit market conditions worsened in 2023-24 due to surging interest rates meant to tackle higher inflation. Demand for credit guarantees is high among Czech SMEs, yet delivery is constrained by resource limitations within the national development bank, which also manages priority programmes for the green and digital transition of the business sector. Equity gaps are particularly acute at the early stage, where venture capital and angel investment remain limited. New venture capital policies, notably through a fund-of-funds approach, have aimed to expand early-stage finance for start-ups, as have recent regulatory improvements on crowdfunding, corporate bonds and the junior stock market. Additional measures, such as tax incentives for equity investors and the development of hybrid financing instruments, would further support these efforts. State-owned institutions providing trade finance offer valuable support but are constrained by stringent regulation. Finally, a more consistent combination of financial instruments with advisory services in government programmes would enhance SME capabilities and improve the effectiveness of public support.
SME Policy in Czechia
Abstract
Like in other EU countries, higher interest rates following the 2022-2023 energy crisis have negatively impacted the cost of business lending for SMEs in Czechia, resulting in reduced investment activities and a shift towards internal financing. Access to external finance remains challenging, with the country ranking below the EU average in terms of SME access to loans, credit guarantees, and equity.
There is a significant gap in the offer of equity finance for SMEs, particularly in early-stage ventures. Venture capital and business angel investment volumes are low in Czechia, thus limiting the growth potential of innovative SMEs. Additional support measures, such as targeted tax incentives for early-stage investors, could stimulate the development of the equity market, at a limited cost to the government.
Several regulatory measures have been implemented to improve access to finance, including new regulations for crowdfunding, corporate bonds, and Employee Stock Ownership Plans (ESOPs). However, more can be done to expand the capital market and provide better support for early-stage investments.
The demand for credit guarantees among SMEs is high, but the current supply is hindered by financial and staff constraints in the national development bank, which is in charge with the implementation of the main current credit guarantee schemes, as well as with other priority programmes targeting the green and digital transition. Although green and digital programmes for SMEs are current priorities, it would be important not to overlook a widely used programme like the national loan guarantee scheme, which could be expanded so as to have a limited fiscal impact.
VC policies in the form of funds-of-funds have been introduced by the Czech government to support innovative start-ups. However, the capital market remains underdeveloped, so additional measures, such as tax incentives for equity investors, would be recommended. Expanding the activities of the National Development Bank (NRB), including the development of hybrid financial instruments, could also enhance the access by entrepreneurs to early-stage financing options.
The START platform for SME listings works well, but additional support services could enhance its effectiveness, in particular through a network of dedicated advisors to guide SMEs in their listing process. In this regard, the Initial Public Offering (IPO) fund is a positive initiative that aims to stimulate SME access to equity financing through public matching of private investments in the junior stock exchange.
State-owned institutions like the Czech Export Bank (ČEB) and the Export Guarantee and Insurance Corporation (EGAP) play a small but useful role in providing trade finance to SMEs. Their operations are currently limited by a restrictive regulatory framework, which could be adjusted to offer greater flexibility and support for internationally oriented companies. However, this different role will require a change in the oversight entity of these institutions, currently the central bank, which needs to follow EU capital-market stability rules for all its supervised institutions.
While financial support is crucial, complementing it with non-financial measures such as mentoring, advice, and counselling can significantly enhance its effectiveness. Providing SMEs with the necessary knowledge and skills to navigate complex financial landscapes is often essential for business growth and would align Czechia with international good practices.
SME credit conditions are tight
Like other EU countries, Czechia has been characterised in recent years by higher inflation and higher interest rates, which have had a negative impact on the cost of business lending for SMEs. Based on information from the latest edition of the OECD SME and Entrepreneurship Financing Scoreboard, there is evidence that Czech companies have reduced investments and/or have used internal sources of finance to carry out investments (OECD, 2024[1]). The Survey on the Access to Finance (SAFE) of the European Central Bank (ECB) supports this argument, with most enterprises reporting tightening credit conditions, as well as rising input costs and shortages in skilled labour (European Central Bank, 2024[2]).
According to the European Investment Fund (EIF), Czechia ranks relatively low in the main SME financing indicators (Figure 2.1). The EIF SME Access to Finance (ESAF) Index, which monitors the state of SME financing markets in the EU, has consistently placed Czechia in the lower tier among EU countries, reflecting longstanding challenges that Czech SMEs face in accessing external finance, such as high interest rates for small loans (i.e., below EUR 250 000) and a large proportion of SMEs reporting barriers in access to finance (Torfs, 2023[3])
Composite indexes
Note: The EIF SME Access to Finance Index (ESAF) is a composite index that aggregates multiple indicators related to SME financing. A higher value (closer to 1) implies more favourable conditions for SME financing, while a lower value (closer to 0) suggests greater challenges in accessing finance.
Source: OECD based on (Torfs, 2023[3])
It follows that private-sector credit is relatively modest compared to other high-income countries (Figure 2.2). While these data can be interpreted in several ways, they may point to restricted access to finance for non-financial corporations, which could be the result of strict lending standards, high interest rates, or a small appetite for small business lending among financial institutions.
Percentage of GDP
Source: Bank for International Settlements (BIS) data
The offer of equity finance is not yet mature
There is also a pronounced gap for (early-stage) equity investments in Czechia (Figure 2.3). Venture capital investments are weak, while business angel investments are fragmented and barely visible. In 2022, venture capital investments amounted to 0.04% of GDP in Czechia, relatively low compared to other EU countries (OECD, 2024[1]).
Notes: Population data are sourced from Eurostat
The government has made significant progress in the implementation of the national Capital Market Action Plan
The “National Strategy for the Development of Capital Market in the Czech Republic, 2019-2023” has made a number of recommendations to stimulate the nascent national capital market in Czechia (Czech Ministry of Finance, 2019). Some recommendations have led to concrete actions and changes to the regulatory framework that are relevant to high-potential SMEs in need of capital market financing.
First, the government has implemented Regulation 2020/1503 on European business crowdfunding, and the central bank (Czech National Bank, CNB) has granted the operating license to four entities. The Regulation has had the merit of bringing clarity about the rules applicable to crowdfunding platforms, including consumer protection1.
Second, a new regulation has been enacted for corporate bonds whose value is below EUR 1 million (sometimes referred to as “mini bonds”) that do not require a prospectus. The regulation now mandates that these bonds must also have an International Securities Identification Number (ISIN) to enhance transparency. The issuance of an ISIN requires the company to obtain a Legal Entity Identifier (LEI), which is linked to anti-money laundering (AML) procedures.
Third, the National Strategy also seeks to address the education of retail investors about capital markets. The government approved the National Strategy for Financial Education 2.0 in January 2020, which had previously been prepared by the Ministry of Finance. While this new Strategy covers a broad range of target groups and topics, the role of the capital market and long-term investments for households with savings are both covered, as was suggested in the National Strategy for the Development of the Capital Market.2
Fourth, another recommendation in this Strategy was to create an association of Czech business angels, which was established in 2019 (the Czech Business Angel Association), not long after the publication of the National Strategy.
Fifth, the law has also been amended to introduce Employee Stock Ownership Plans (ESOPs) (January 2024). ESOPs provide employees with an ownership interest in the company through the offer of company stocks typically available at preferential price. Besides non-financial benefits, such as increasing employee retention, ESOPs offer SMEs a financing mechanism that can help raise capital without relying only on external investors or creditors.
Sixth, Act No 462/2023 Coll., effective from 1 January 2024, introduced a new form of pension fund, the so-called Alternative Participation Fund. This new type of fund has fewer regulatory restrictions (in terms of assets and fees) to invest in asset classes such as infrastructure, real estate and, above all, private equity funds.3 Although, as of mid-2025, no alternative participation fund had been set up, this legislation sets the conditions for channelling more investments into domestic start-ups and scale-ups.
Finally, the distributed ledger technology (DLT) initiative, which will enable the issuance and trading of SME bonds across Europe, is being developed under the EU pilot regime for market infrastructure. This regulation, which came into effect in March 2023, aims to create a framework for the issuance, trading, and settlement of digital assets, including SME bonds, using blockchain technology. Czechia is participating in this initiative by aligning its regulatory framework with the EU’s pilot regime. In fact, the Czech Central Securities Depository Prague was the first institution in the world to be allowed to operate the DLT Settlement System under the DLT Pilot Regulation. This means that entities operating in the Czech capital market can apply for authorisation to operate DLT-based platforms, facilitating the issuance and trading of SME bonds. This could enable Czech SMEs to access new forms of financing through tokenised bonds, potentially increasing their funding options and liquidity.
The role of credit guarantees could be strengthened
Czechia’s credit guarantee scheme has been effective but could be further expanded to satisfy unmet demand. The National Development Bank (Národní Rozvojová Banka, NRB), which is the public development bank of Czechia, offers various tailored guarantee schemes to support SMEs:
Inostart: This guarantee is designed for innovative startups (less than three years old) seeking loans of up to CZK 15 million, with guarantees covering up to 80% of the loan.
M-záruka: This guarantee is available for established SMEs needing financial support for investment or operational projects. It covers up to 70% of the loan amount, capped at CZK 5 million.
Záruka ZRS (Development Cooperation Guarantee): This guarantee is aimed at businesses expansion into developing markets outside the EU. This scheme supports projects in infrastructure and agriculture, covering up to 50% of the loan, depending on the project's risks.
Electromobility Guarantee: It supports businesses investing in electric vehicles or infrastructure like charging stations to promote sustainable practices (see also the chapter of the report on the green transition of SMEs).
Smart Guarantees for Digitalisation: It helps SMEs modernise their operations through digital transformation projects, offering guarantees for technology and software-related loans.
Záruka ZRS (for Social Enterprises): It is tailored for social enterprises focusing on social impact initiatives, including employment and social inclusion projects.
The Flood Guarantee: It offers SMEs a guarantee for an investment or operating loan to help with the restoration of business after floods.
The Vadium Guarantee: It reduces the amount of funds that SMEs must deposit as security when bidding for a public contract.
These schemes are provided free of charge for eligible businesses. Demand for these products is significantly higher than the available supply, and Czechia’s volume of credit guarantees, in relative terms, is below the volumes observed in other countries (0.19% of GDP in 2021). In addition, the current guarantee streams are meant for specific purposes, which means that many SMEs in need of credit to meet working capital requirements or more general investment needs are not eligible to apply.
Percentage of GDP
Source: (OECD, 2024[1])
A 2024 survey from the national Association of Small and Medium-Sized Enterprises and Crafts (AMSP ČR) confirms that 40% of Czech companies in need of credit find it difficult to obtain such credit without a state guarantee. Interestingly, the percentage is the highest among mid-sized companies (50-249 employees), manufacturing firms, and businesses that have benefited from guarantees in previous years.4 This last point suggests that some companies may have become dependent on government-backed guarantees for their operations.
Under the previous programming period, the Czech government was operating a more extensive credit guarantee scheme through the Expanze Guarantee Fund, which was positively regarded by representatives of the Czech business community interviewed for the preparation of this report. The volume of this fund was EUR 336 million and was matched by a loan fund with the same name totalling EUR 426 million.5 The Czech government should consider re-introducing national guarantee schemes at a similar scale of the Expanze Fund. Given the low level of defaults on guaranteed loans, this change would not involve high costs for the government budget. Guarantee schemes do not incur significant costs unless loan defaults are common, which is not the case in Czechia, making them a fiscally efficient form of support compared to direct subsidies.
In the context of Czechia, guarantees are provided free of charge. However, the pricing of credit guarantees often includes application fees and annual management fees, which can be charged to borrowers and/or lenders. The introduction of a more competitive fee structure for the Czech scheme could enhance its cost-effectiveness, allowing the government to offset part of the administrative costs while still providing affordable financing options to SMEs.
While it is possible that some SMEs, particularly the smaller ones, might be discouraged by such fees, this concern can be mitigated through careful design. For example, application fees could be applied only to approved loan guarantees, or deferred until a recipient business has demonstrated a certain degree of stability. This approach would ensure financial sustainability without restricting access, ultimately enhancing the reach and impact of the programme.
Another option in credit guarantee policies is the combination of guarantees with interest rate subsidies, which makes this policy even more attractive for businesses. This has been the prevailing approach in Czechia under the previous guarantee programme. A downside, however, is the higher cost per guarantee, which limits the number of beneficiaries if the budget is capped. A careful evaluation of this trade-off is, therefore, essential to find a balance between the scheme's accessibility and its fiscal sustainability.
Finally, an important consideration involves ensuring that the majority of the benefits of loan guarantees are passed on to SMEs in the form of lower interest rates, lower collateral requirements and longer tenures, rather than retained by the financial institutions involved in the delivery of the programme. This can be achieved through several mechanisms such as implementing monitoring and reporting requirements, fostering competition among participating banks, conducting regular evaluations of the scheme, and establishing clear risk-sharing arrangements with the banks involved in the delivery of programme.
The potential of corporate bonds finance could be further explored
Mini bonds have recently emerged as an important alternative financing instrument for SMEs, offering a flexible way to raise medium-term capital outside of traditional banking channels. By issuing mini-bonds directly to investors, generally through regulated platforms, SMEs can diversify their funding sources, strengthen their financial independence, and support growth activities such as innovation, expansion, or working-capital needs. For investors, mini-bonds provide access to higher-yield opportunities while supporting the real economy.
Although between 2013 and 2023 a total of CZK 634 billion of corporate bonds were issued in Czechia (data from the forensic agency “Surveilligence”), national stakeholders have highlighted that this product is not subject to the same level of protection as other retail investment products, potentially leading to pyramid schemes, frauds or misrepresentation of information.
There are, nonetheless., ways to address these issues. On the demand side, possible measures include requiring bond issuers to meet certain revenue, capital, or profitability levels, or to have a proven business and credit history. On the supply side, corporate bonds, especially mini bonds, could only be made available to qualified investors, based on wealth, income or financial knowledge.
Support measures for early-stage equity investments need scaling-up
The Operational Programme Enterprise and Innovation for Competitiveness (OP EIC), managed by the Ministry of Industry and Trade (MIT), was the predecessor of the Operational Programme Technology and Applications for Competitiveness (OP TAC). As part of the OP EIC Venture Capital Programme, the MIT, in collaboration with the European Investment Fund (EIF), had introduced the OP PIK Fund of Funds to support innovative start-up companies through seed and early-stage finance. The initiative received EUR 40 million from the EIF, which were eventually invested through two newly established VC funds – Nation 1 Fund and Lighthouse Ventures – whose investment period was extended until the end of 2023. Besides securing equity finance, selected start-ups also received advisory and mentoring services, including through an acceleration programme specifically tailored to early-stage projects.6
More recently, the Czech government and the EIF launched a new EUR 55 million fund-of-funds initiative financed through the Recovery and Resilience Facility (RRF). The RRFCZ Fund-of-fund is expected to invest in three VC funds following specialised strategies:
Pre-seed co-investment fund: It will support early-stage start-ups.
Fintech fund: It will focus on distributed ledger technologies (DLT) applications.
Technology transfer fund: It will commercialise research from leading Czech universities in artificial intelligence (AI).
These initiatives have strengthened the equity finance landscape in Czechia, making the supply of VC in the Czech market closer to that of other similar-sized EU economies. Following the creation of these funds, VC and growth capital investments peaked in 2021, reaching EUR 751 million, before falling in 2022 (OECD, 2024[1]). The most recent implementation plan of the national SME Strategy notes the ambition to establish two additional funds, which appears to be a reasonable choice to keep momentum behind the growth of the domestic VC market.
The current government initiatives to stimulate the supply of venture capital could be complemented by targeted tax incentives for early-stage equity investors, which would be in line with the Europe Startup Nations Standards Declaration adopted by EU Member States in 2021. Finland and Sweden, for example, have successfully introduced tax incentives that encourage investments in start-ups and SMEs. In addition, the further use of mezzanine finance, subordinated loans or other hybrid instruments could also further support diversification in SME financing sources. International evidence indicates that such instruments, which mix characteristics of debt and equity products, offer unique benefits, especially towards growth-oriented ventures (Thompson, Boschmans and Pissareva, 2018[4]). Despite specific reference to quasi-equity instruments in the national SME Strategy and the annual implementation reports of the Strategy, these instruments are not currently used in Czechia.
Finally, the Czech Government could follow the lead of countries such as Denmark and Finland to actively involve pension funds in venture capital investments. With the introduction of the Alternative Participation Fund (under Act No 462/2023 Coll.), which allows the participation of mutual pension savings schemes into equity markets, Czechia now has a long-term opportunity to channel more funds into high-growth start-ups.
Some of these options have already been explored in Czechia in the framework of the Startups and Investors Coordination Council established last year by MIT and CzechInvest. In co-operation with the Europe Startup Nations Alliance (ESNA), an analysis of best practices in individual member states was carried out which could offer the basis for the introduction of relevant policy reforms at national level.
The junior stock market “START” works well, but listed companies could benefit from additional support services
Czechia has a dedicated platform for SME listings on the Prague Stock Exchange, which is called START. As typical with such platforms, the START Market provides a simplified regulatory environment and lower listing costs, making it more accessible for SMEs looking to raise funds through public offerings. As of 2024, there were around 15 companies listed on START, a number that has remained relatively stable in recent years.
The National Development Bank (Národní rozvojová banka, NRB) has also recently signed an agreement with the Prague Stock Exchange to support SMEs through equity instruments. Specifically, NRB, through its subsidiary National Development Investment (NRI), has established an “IPO fund” to participate in the START market, acting as investor in the Czech stock market between 2021 and 2023. The IPO fund was valued at CZK 330 million (approximately EUR 12.5 million) and was financed by the Operational Programme Enterprise and Innovation for Competitiveness, managed by the Ministry of Industry and Trade.
Through the IPO Fund, the NRB buys shares issued on the START market by companies that meet its eligibility conditions, for a maximum amount of 30% of the shares bought by private investors. In doing so, the NRB supports the development of the START market and provides high-growth potential SMEs with additional financing through IPOs. Senior representatives of the Prague Stock Exchange have emphasised the importance of this initiative, noting its alignment with the European Commission’s priorities for SME equity support.
In terms of business development services, START provides some help, but the approach is not as structured or rigorous as in other countries. The so-called Nomad (Nominated Adviser) system used by the Alternative Investment Market (AIM) in the United Kingdom could be a model to follow. It would encourage more listings and support listed companies through a range of business development services.
Two state-owned organisations provide trade finance products, but their regulatory framework is too binding
The Czech Export Bank (Česká Exportní Banka, CEB) and the Export Guarantee and Insurance Corporation (Exportní Garanční a Pojišťovací Společnost, EGAP) are two state-owned institutions supporting export activities through specialised trade finance products. Both are supervised by the national central bank, which means they need to comply with EU regulations on the banking sector, including minimum capital requirements (e.g., the Capital Requirements Directive, CRD)7.
The current regulatory framework limits the activities of CEB and EGAB. As of 2024, the former had roughly ten clients and an outstanding portfolio of about EUR 20 million, while the latter had around 20-30 clients and EUR 10–20 million in outstanding exposure. Both institutions operate at market rates and deliberately maintain small portfolios to reach exporters insufficiently served by private providers while avoiding excessive risk. This approach helps ensure that they complement rather than crowd out private finance, which is appropriate given their limited national funding.
At the same time, while the current regulatory and supervisory framework ensures high standards of financial solidity, it restricts the activities of both institutions more than is typical for an Export Credit Agency (ECA) (Schlögl, Pfaffenbichler and Raza, 2024[5]). An expansion of the mandates of CEB and EGAP beyond traditional export finance – for example, to offer broader support to export-oriented firms – could help address these constraints.
International experience illustrates this. Atradius Dutch State Business operates under a more flexible regulatory framework, which enable it to provide a wider suite of instruments, including credit insurance, re-insurance and financial guarantees8. As implied earlier, this higher flexibility and shift in operations will require an important change in the legal nature of these institutions, notably a change in the role of the oversight institution.
Czechia should couple more regularly business advisory services with SME financing support
Financial aid through grants and loans are rarely matched by comprehensive business development services like mentoring or technical assistance in Czechia. OP TAC has included some elements of advisory services, particularly in innovation and technology adoption, but these services are often project-specific and not consistent across all financial support schemes. Other countries and organisations have more consistently combined financial and non-financial support measures, given the existing evidence that this combined approach has stronger impacts on business performance outcomes (see Figure 2.1).
In 2013, Canada’s development bank, BDC, sought an independent and measurable evaluation to determine whether its financing and consulting services were genuinely accelerating the success of entrepreneurs. To accomplish this, BDC commissioned Statistics Canada to assess the impact on its clients from 2001 to 2010. Statistics Canada created a longitudinal database comparing BDC clients (the "study group") with non-clients (the "comparison group"). Both groups were matched in terms of factors like age, employment, assets, debt ratio, profit margin, revenues, industry, and geographic location. Statistical regressions were then used to test various hypotheses regarding BDC’s influence on business performance, focusing on five key performance indicators: growth in sales, employment, productivity, profits, and survival rates after receiving BDC financing and/or consulting services. The analysis showed that BDC support had a positive impact across all five indicators, with the most significant effect seen when both financing and consulting services were combined. In these cases, BDC clients experienced sales growth that was 8% to 25% higher than that of non-clients.
The new regulatory sandbox for fintech companies should be evaluated
In 2024, with support from the National Recovery and Resilience Plan, Czechia launched its first fintech sandbox to provide a controlled environment for legal and technical testing of new fintech solutions. Participants in the sandbox, including SMEs, benefit from a tailored support package that includes regulatory testing plans, legal assessments of their business models, and structured opportunities for dialogue with public institutions and regulatory experts. The sandbox facilitates engagement with the central bank and other authorities to help navigate licensing or compliance issues. Additional support is available in the form of business mentoring, consultancy, workshops, and networking opportunities, including connections to international partners in academia and industry.
The initiative, co-ordinated by CzechInvest, reflects Czechia’s recognition that innovative financial products often challenge traditional regulatory frameworks. By supporting early-stage regulatory and technical evaluations, the sandbox helps to reduce time-to-market and improves regulatory certainty for emerging fintech companies.9
A 2020 OECD report outlined a comprehensive set of principles that remain highly relevant for guiding the implementation of regulatory sandboxes (Attrey, Lesher and Lomax, 2020[7]). The implementation of the Czech fintech sandbox could eventually be assessed against this set of principles (see Box 2.2).
Set up a cross-sectoral regulatory sandbox: Include activities that fall directly or indirectly under financial authority supervision, without sector-specific restrictions.
Ensure no regulatory waivers: Apply existing EU and national regulations proportionally without granting waivers or relaxing rules for sandbox participants.
Establish strong regulatory and supervisory oversight: Ensure operational effectiveness and improve regulatory clarity through the clear appointment of an oversight institution.
Enable data-sharing capabilities: Develop a regulatory sandbox with potential data-sharing features, subject to the availability of datasets and necessary resources.
Include a diverse range of participants: Permit licensed companies and those unsure of their regulatory status to test innovative products, with eligibility based on licensing readiness.
Implement regular consultation during testing: Require ongoing consultations with participants throughout the testing phase to monitor progress and adjust requirements as needed.
Allow for early termination: Set up provisions for early termination of a project if the risks to consumers or financial stability become too high.
Develop an exit procedure: Require participants to provide detailed reports upon exit from the sandbox, including the results and potential impact of their innovation.
Set up a communication strategy: Ensure clear communication to stakeholders regarding the sandbox's purpose, benefits, and operating rules to manage expectations and foster understanding.
The European Commission introduced the SME Strategy for a Sustainable and Digital Europe in March 2020.10 The EC Strategy highlights the importance of diversifying financial instruments available to SMEs, such as loans, guarantees, equity financing, and crowdfunding. It also underscores the role of the InvestEU Programme, which consolidates multiple EU financial instruments, providing guarantees to mobilise private investment. Additionally, the EU SME Strategy promotes initiatives to strengthen SMEs' financial literacy.
The Capital Markets Union (CMU) Action Plan is another crucial piece of legislation at the EU level. It aims to create a more integrated and efficient European capital market, making it easier for SMEs to access equity finance and other non-bank funding sources. The CMU focuses on reducing barriers to cross-border investment, fostering financial integration, and enhancing access to financing for SMEs across Europe. The Action Plan includes some actions that are particularly relevant to SMEs, such as making companies more visible to cross-border investors, supporting access to public markets, and supporting vehicles for long-term investment.
Czechia’s SME Support Strategy broadly reflects these EU policy guidelines, especially the priority of diversifying the financing sources available to SMEs, including through capital market initiatives, crowdfunding, and harnessing distributed-ledger technologies. The establishment of the specialised vehicles for SMEs on the Prague stock exchange is also well aligned with the EU priorities in this area.
Nonetheless, there is scope for offering more advisory services, kick-starting the early-stage equity market, and spreading the offer of guarantees. While there has been progress in the support of early-stage equity finance, desk research and meetings with Czech stakeholders suggest that there is still room for further expansion. The InvestEU programme, for instance, supports companies with a higher risk profile that are not well served by commercial lenders. Czechia could participate more actively in this programme, "topping up" the InvestEU Programme with additional national resources and/or designing complementary policies to stimulate early-stage equity financing.
Similarly, the volume of credit guarantees is low in Czechia. At the EU level, these guarantees are provided through various EU programmes, such as COSME (Competitiveness of Enterprises and Small and Medium-sized Enterprises) and the InvestEU Programme, which Czechia could join more pro-actively.
Third, in line with the recommendations in this report, EU access-to-finance programmes often include advisory services. These services help SMEs improve their financial literacy, investment readiness, and ability to access various funding sources, including EU-backed financial instruments. The InvestEU Programme not only provides financial support but also includes an Advisory Hub offering technical assistance and advisory services, which can serve as a model for Czechia. While some EU-level initiatives like the Enterprise Europe Network (EEN) and the European Innovation Council (EIC) Accelerator offer support to SMEs in Czechia, more can be done to integrate more comprehensively advisory services into the country's SME financing policies.
Access to finance remains a key challenge for Czech SMEs, especially in terms of equity and quasi-equity funding. While progress has been made through a fund-of-fund approach across the two last EU programming periods, further targeted actions are needed, for example through the offer of targeted tax incentives for investors in early-stage companies.
Recent regulatory changes, such as the introduction of new rules for corporate bonds and crowdfunding platforms, have created a more favourable environment for investment and are aligned with EU policies. Nonetheless, expanding financial and non-financial support services will be crucial for strengthening the financing landscape and promoting sustained business growth and innovation in Czechia.
Against this backdrop, the following recommendations are meant to strengthen SME financing conditions and policies at national level.
Establish two additional VC funds, as planned in the implementation plan of the national SME Strategy and as recommended by the evaluation of VC support measures funded by OP EIC. Ensure that these funds co-invest alongside private investors and follow international good practices more generally, for example through engagement with the European Investment Fund.
Offer more advisory support to SMEs seeking listing on the dedicated platform of the Prague Stock Exchange.
Evaluate the regulatory sandbox for fintech companies against the general principles for regulatory sandboxes set out by the OECD.
Consider the introduction of a targeted tax incentive for retail early-stage equity investors whose generosity will depend on the specific terms and conditions of the programme (e.g., income tax relief of the investment up to a certain threshold, full or partial exemption from capital gains taxation, etc.).
Consider the re-introduction of a credit guarantee scheme similar in size to the previous Expanze Guarantee Fund. To reach sufficient scale and limit the budgetary impact, the government could consider the application of a management fee for applying companies and reviewing the costs related to the practice of combining guarantees with grant support.
Investigate the potential to combine financial support measures with business development services to raise the financial literacy and investor readiness of SME beneficiaries.
Diversify and scale up the activities of the National Development Bank (Národní rozvojová banka, NRB), including through the offer hybrid financing instruments.
References
[7] Attrey, A., M. Lesher and C. Lomax (2020), “The role of sandboxes in promoting flexibility and innovation in the digital age”, OECD Going Digital Toolkit Notes, No. 2, OECD Publishing, Paris, https://doi.org/10.1787/cdf5ed45-en.
[6] Boschmans, K. and L. Pissareva (2018), “Fostering Markets for SME Finance: Matching Business and Investor Needs”, No. 6, OECD SME and Entrepreneurship Papers, Paris.
[2] European Central Bank (2024), Survey on the Access to Finance of Enterprises in the euro area - Second quarter of 2024, European Central Bank , Franfurt.
[8] OECD (2024), Financing SMEs and Entrepreneurs 2024: An OECD Scoreboard, OECD Publishing, Paris.
[1] OECD (2024), Financing SMEs and Entrepreneurs 2024: An OECD Scoreboard, OECD Publishing, Paris.
[5] Schlögl, L., D. Pfaffenbichler and W. Raza (2024), Aligning European export credit agencies with EU policy goals, European Parliament, Brussels.
[4] Thompson, J., K. Boschmans and L. Pissareva (2018), “Alternative Financing Instruments for SMEs and Entrepreneurs: The case of capital market finance”, OECD SME and Entrepreneurship Papers, No. 10, OECD Publishing, Paris, https://doi.org/10.1787/dbdda9b6-en.
[3] Torfs, W. (2023), “The 2022 EIF SME Access to Finance Index”, No. 2023/92, European Investment Fund, Luxembourg.
← 1. See EU regulation on European crowdfunding service providers for business: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32020R1503
← 2. See National Financial Education Strategy 2.0: https://financnigramotnost.mfcr.cz/cs/pro-odborniky/strategicke-dokumenty
← 3. See text of the law here: https://www.zakonyprolidi.cz/cs/2023-462. For further information, see: https://www.mfcr.cz/cs/financni-trh/bankovnictvi-a-dohled/platebni-sluzby-a-vyporadani-obchodu/aktuality/2023/zverejneni-zakona-kterym-se-meni-zakon-c-256-2004-53518
← 5. Financial Instruments in EU Funds under Shared Management: Czech and Slovak Experience (2024), presentation shared by Czech Authorities. Applications for the Expansion loan programme lasted until mid-2023.: https://www.dotaceeu.cz/cs/evropske-fondy-v-cr/financni-nastroje/uvery/drive-poskytovane-produkty/program-expanze
← 6. Further information at: https://www.dotaceeu.cz/cs/evropske-fondy-v-cr/financni-nastroje/kapitalove-vstupy/fond-fondu-op-pik-(1)
← 7. Based on Government Resolution No. 909 (dated 29 November 2023), the government agreed to integrate the National Development Bank (NDB) and the Czech Export Bank (CEB). In the current legal framework, therefore, CEB and NDB are both subject to the supervision of the national central bank.
← 8. For further information, see the website and annual report of Atradius Dutch State Business (DSB) https://atradiusdutchstatebusiness.nl/en_NL/knowledge-bank/annual-review/annual-review-2023.
← 9. https://practiceguides.chambers.com/practice-guides/fintech-2025/czech-republic. Most of the information is sourced from a PowerPoint presentation which was shared by the Czech Authorities.