About the Suport to SME Development in Armenia (SMEDA)
The private sector in Armenia faces challenges such as the lack of cohesion and coordination of different small and medium-sized enterprises (SME) support programmes, inefficient steering mechanisms for the SME development process, a fragmented landscape of stakeholders, and an inefficient public private dialogue as well as an inefficient decision- making process. The donor coordination process in different intervention areas is currently not government-driven.
The involvement of the private sector in SME development strategies is not effective and interests of SMEs are in fact not reflected in decision-making processes. Supporting services are insufficiently available – both in quality and quantity. Underdeveloped capacities within the organised private sector are main obstacles and barriers to the envisaged development.
Innovative ideas are hardly developed and are rarely transferred into business cases. Research and development are limited, in particular in the SME sector with hardly any cooperation of businesses and research entities. The innovative and creative potential of young specialists is not employed.
Access to finance is another major challenge for SMEs. Due to high debts – accrued during the global financial crisis and an associated decline in GDP (estimated 14% in 2009) – many Armenian SMEs have only limited access to further credits and loans. In general, lending policies of most banks and financial institutions do not encourage investments in SMEs.
With this situation for the private sector in Armenia, the EU-co-financed, GIZ-implemented project “Support to SME Development in Armenia” (SMEDA) was initiated in 2016. The project is in line with the EU Single Support Framework 2014-2017 for Armenia. It is furthermore consistent with the strategic framework documents of Armenia (Armenia Development Strategy and SME State Support Strategy) in order to facilitate their implementation.
The objective of the project is to improve the national business and investment climate and support the creation and development of SMEs to enable broad based growth.
The SMEDA-Project is part of the Regional Private Sector Development in South Caucasus Programme, which is operating in the three countries of the South Caucasus, Armenia, Azerbaijan, and Georgia. This umbrella programme faces the challenge of generating broad based inclusive growth to reduce the urban-rural gap and poverty above all in rural regions. In view of the small domestic markets with low purchasing power, the primary aim is to strengthen private sector development.
According to “Precision Engineering” Sector Strategy 2011-2020:
-Minor resource allocation for R&D by local companies;
-Poor marketing and managerial skills of local companies;
-Shortage of graduates with knowledge and practical skills, meeting the requirements of the companies.
According to the results of the Roundtable discussion on PE:
-Lack of modern technologies, laboratories and critical mass of expertise;
-Weak cooperation with science;
-Market actors are not aware of the market trends / opportunities;
-Lack of connection and experience exchange within the Armenian community;
-Difficulties connected with applying to big projects;
-Difficulties with customs clearance.
In order to understand all these challenges in depth, have a broad picture of the sector and find out the potential development directions of the field, the SMEDA-Project will organise a sector study of Precision Engineering sector.
Conditions and payment terms
The Contractor’s offer must include
- The Financial offer requires the Contractor to submit for consideration a summary of costs with respect to the above sections
- The Technical offer requires the Contractor to submit details pertaining to the Contractor’s organization; the Contractors’ experience; comments/suggestions on the Terms of Reference, description of approach, methodology and work. The technical offer also suggests a format of presentation for the mapping. The description of approach, methodology and work plan must include activities and deliverables as indicated in above table
- Interim payment;
- Final payment upon fulfilment of the contract.
Coordination and communication
The Contractor reports to the Team Leader of the EU SMEDA-Project, Ms. Eva Maria Näher and closely collaborates with the responsible Project Experts, Mr. Peer Priewich and Mr. Davit Kartashyan, as well as with the administrative support team in Armenia.
The Contractor must fulfil the following requirements:
-Strong proven expertise in the area of assignment, (proven by references attached to the offer)
-Proficiency in English and Armenian languages (written and spoken)
Excellent understanding of how to approach and communicate with businesses/start-ups,institutions, international organizations, government.
-Description of Action
-Log Frame for SMEDA-Project
-Other study reports in the field of PE