Accessing Finance for Green Growth and LEDS: Private ... · PDF fileLEDS: Private sector...
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Accessing Finance for Green Growth and LEDS: Private sector finance instruments for SMEs Hanoi, March 13, 2014 Dr. Uwe Weber
Transcript of Accessing Finance for Green Growth and LEDS: Private ... · PDF fileLEDS: Private sector...
Accessing Finance for Green Growth and LEDS: Private sector finance instruments for SMEs Hanoi, March 13, 2014 Dr. Uwe Weber
Contents
1. SWITCH-Asia Programme & Network Facility 2. Significance of SMEs sector in Asia 3. SME investment objectives 4. Private sector SME finance 5. Credit rationing for Asian SMEs 6. Factors limiting SME access to finance 7. Policy recommendations
Accessing Finance for Green Growth and LEDS
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• SWITCH-Asia is an EU-financed grant programme supporting the adoption of Sustainable Consumption and Production Practices in Asia
- 86 Projects received supporting grants of about 1.7 mil in average - 4 National policy support components installed - Regional policy support component - Network Facility - Total about € 150 mil. disbursed 3
Accessing Finance for Green Growth and LEDS
• Private & Public Finance - Donors are interested in continuation of actions which were initiated by
grants - Private institutions implement (partly) public guaranteed financing
instruments - Public institutions don’t control private finance, however can support a conducive political end economic framework
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Accessing Finance for Green Growth and LEDS
• Asia is home to a dynamic, entrepreneurial and increasingly internationalised SME sector
- SMEs respond flexibly and adapt to fast developing regional and global
markets - Asian SMEs participate in global and regional value chains and
production networks linked to large multinational enterprises
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Accessing Finance for Green Growth and LEDS
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Cambodia
China
Laos
Philippines
Vietnam
SMEs invest in primarily in business development1
1Data from ‘Small and Medium Enterprises Access to Finance in Selected East Asian Economies’, ERIA Research Project Report 2010, No. 14
Cleantech investment may hide here % SMEs sampled
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Accessing Finance for Green Growth and LEDS
Environmental compliance is not a driving force of investment
1Data from ‘Small and Medium Enterprises Access to Finance in Selected East Asian Economies’, ERIA Research Project Report 2010, No. 14
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Vietnam Indonesia Philippines China
Serious obstacles to SME development: Environmental compliance
% SMEs sampled
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Asian banks offer SME finance products …
Indonesia Sri Lanka
Vietnam
Bangladesh
Philippines
Afghanistan
Pakistan
Cambodia
India
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Laos Vietnam Philippines China
Satisfaction with services offered
Credits fully/partly approved
Anecdotal evidence suggests that 30-80% of SMEs in Asian countries do not have access to credit, i.e. many or most do not considering applying for1
% SMEs sampled
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Matching SME financing demand structure: - Green Finance may be mainstreamed into SME financing programmes as e.g. new equipment generally reduces energy consumption, GHG emissions and resource consumption per unit of output. Rebound effects need to be considered: - More efficient production of significantly more products leads to overall rising emissions and resource consumption
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Address information asymmetry between banks and SMEs: - Clear, simple and meaningful public registration schemes for
companies providing reliable information to lenders - Promote financial literacy of SMEs providing reliable balance sheets,
turnover estimates and business plans with stringent bookkeeping and accounting standards
Train the financial sector in understanding double or triple bottom lines of proposed investments
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Accessing Finance for Green Growth and LEDS
SWITCH-Asia:
‘Greening SME by enabling access to finance’ please download from www.switch-asia.eu
- Publication of SME guideline on access to green finance for countries in
Asia cooperating with ASRiA - Webinar on SME access to green finance - SWITCH-Asia Magazine focusing on green finance - Follow us on www.switch-asia.eu - Possibly project proposal on facilitating access to green finance in one
or several Asian countries
Thank you! Dr. Uwe Weber SWITCH-Asia Network Facility c/o Collaborating Centre on Sustainable Consumption and Production (CSCP)
tel. +49 202 4 59 58 -10 email [email protected]
[email protected] www.switch-asia.eu
