BAKU, Azerbaijan, October 2. The Small and Medium Business Development Agency (KOBIA), the Central Bank of Azerbaijan (CBA) and the Asian Development Bank (ADB) are discussing the development of a taxonomy and common approaches to supporting small and medium-sized enterprises (SMEs), Advisor to Chairman of the board KOBIA Elnur Aliyev said, Trend reports.
He made the remark during a panel session titled “Supporting SMEs in the Green Transition,” held on the third day of the international conference at the Climate Action Week in Baku.
"KOBIA currently lacks its own financial instruments and support mechanisms. In many countries, such tools have already been implemented—various business development programs have been developed. However, such mechanisms are not yet available in Azerbaijan. Nevertheless, we are working closely with the CBA in this direction.
Even at the middle school level, there is discussion about the need for businesses to adapt to new conditions and processes, as well as how SMEs can utilize the experience of large companies in their operations," Aliyev added.
According to him, KOBIA believes that rolling with the punches will pave the way for tangible outcomes.
"It's not just about financing but also about creating a favorable regulatory environment and clear market rules. We understand that the CBA must develop its own standards and approaches, which will be aligned with the overall financial system of the country. This process is complex and sensitive, but we are working closely with the CBA to achieve harmonization.
Moreover, we have involved the Asian Development Bank in discussions for the joint development of a taxonomy and common approaches to SME support. The process is ongoing, we are consulting with experts, and this initiative requires time to implement," he pointed out.
Aliyev mentioned that small enterprises also need to improve transparency and corporate governance.
"Financing is always a matter of trust between the investor and the company. The investor wants the funds to be returned on time and in accordance with contractual terms, while the company seeks to use the resources as efficiently as possible. In this regard, transparency in reporting and the level of corporate governance are crucial.
For successful cooperation, both parties must take each other's interests into account, and it is especially important for SMEs to implement principles of transparency and accountability. We cannot force financial institutions to operate under conditions that do not meet their interests.
However, the process is moving in the right direction, and we are confident that the approach to supporting SMEs will improve. We see that the SMEs need to adopt best practices and adapt to new conditions. This applies not only to Azerbaijan but also to global experience.
The relationships between small and large businesses and the extent of their development differ worldwide. Our initiative aims to bring local processes closer to global standards. With a global approach, local changes will occur more effectively," he added.
The Climate Action Week runs from September 30 through October 4, 2024, in Baku for the first time.
The event will form the basis of the climate agenda ahead of COP29 in Baku in November. It brings together key stakeholders from a range of fields such as politics, finance, trade, investment, science, arts, culture, civil society, and media.
The first half of the week (from September 30 through October 2) focuses on climate solutions, involving government agencies, academia, and the private sector. The second half (October 3-4) will focus on science, education, arts, culture, and other sectors.
To note, in observance of Climate Week, a plethora of activities are planned across the city.
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