Toespraak van Prinses Máxima tijdens de conferentie ‘Growing SMEs’ te Den Haag

Toespraak | 15-11-2012

Good afternoon, members of the BiD Network, investors, entrepreneurs, ladies and gentleman. I would like to welcome the Marketplace back to The Hague. I am pleased to join you again and hear about the business ideas from all over the world. They are inspiring and energizing.

When I thought about these remarks, it was difficult not to repeat what I said two years ago. I mean, the issues are still the same. But what I can say is that we do have a model that seems to work. In seven years, BiD has helped match around 100 enterprises with nearly USD 13 million in finance. This is an impressive achievement. You also won the G20 SME Finance Challenge, something you should be very proud of. And as Honorary Patron of the G20 Global Partnership for Financial Inclusion I like to acknowledge this.

Twelve pitches made in the 2010 Marketplace gained funding. One, by Alex Eaton from Mexico, is forecasting to sell 3,000 bio-digesters in Latin America by the end of this year. And 50,000 in five years. Biobolsa is such a sensible product. Clients get one liter of biogas a day from20 litersof animal waste. This improves their air at home and thus their health. And, it gives them an organic fertilizer. Meanwhile, the community benefits from less degradation of the environment and fewer gas emissions. Without these investments, Biobolsa would have been just a dream.

So, the marketplace approach is very successful. But you know very well, your work has only just begun. What about those entrepreneurs who are not here today? Therefore it would be good to focus on what BiD and its network can do to address some persisting issues and foster even further reaching solutions.

200 million SMEs in developing and emerging countries still do not have access to the financing they need to grow and thrive. As we prepared for today, BiD summed it up well: "The future lies with the development of local capital markets and organic growth of businesses through domestic market demand." I could not agree more. Financial services need to be embedded in local institutions. It is great that the Marketplace has now also been held in Bogatá and Kigali. And that BiD is also working with partners to hold national events in other countries. These are showing some real results - for example, bringing USD 1.2 million in local finance to a private hospital in the Philippines. And contributing nearly thirty percent of all of BiD's matched funding.

But the impact of these events can be so much more than the amount they finance. They can also help to build more interest in serving the SME market by demonstrating that there is a good business proposition. Also, international networks are a good vehicle to build capacity of local financial institutions and share knowledge. And, it gives local institutions valuable exposure, experience and credibility, which can help them expand their lending and other finance activities.

BiD could also play an important advocate role with policy makers. We know that the ease of doing business in a given country will help enterprises to grow. Focusing on what is needed in each country will be very important. Is there a good local credit registry? How is the regulation of movable assets? Is the payment system widely accessible and affordable? Also think about how other financial services can help. For example, having crop insurance makes farmers more eligible to receive a loan by lessening the risk to the lender. What about other products? One bank in Papua New Guinea is extending an automatic line of credit to merchants relative to the size of their savings accounts. And that ratio grows with successful repayments. These kinds of approaches can all improve available finance for SMEs.

Another way BiD's networks can help is by building demand for SME finance. Coaching and business skills training can help entrepreneurs submit attractive applications and investment pitches.

Coaching helps not only in getting finance in the first place, but staying in business and growing. The fact that none of the matches done so far have failed in their businesses, says a lot! We see the same thing in the Netherlands where a microfinance institution provides a similar approach. As a result 88% of enterprises it has lent to are still in business after two years. This is on track to surpass the industry average, with only 56% of SMEs still active after three years.

You can also help by identifying practical steps for government to build demand, such as by making it easier for informal businesses to formalize. Rwanda set up a one-stop shop to simplify opening of a business. Procedures dropped to just two, and the time involved from nearly 20 days to 3 days, also bringing costs down (1). This is extremely important.

And for the long term, networks like BiD and other partners can work to enhance the local culture of entrepreneurship. One approach could be to work with technical schools and universities to strengthen curricula on business training and financial management skills. This may be especially timely in specific sectors like agriculture where there is pressing need for more finance, or other local sectors that need development. Competitions for local business ideas are also a good way to help specific neighbourhoods or sectors-and to address pressing development priorities.

Now, I would like to speak about women because women entrepreneurs face particular obstacles. Some of these relate to finance, but there are other factors too. Earlier this year I visited women entrepreneurs in Turkey. I was struck by how many of them were in some kind of individual handicraft business, like soap making or ceramics. One cooperative had a thriving export business. But others were struggling, with sales, finding a market and with finance. Of course, the first thing any good business needs is a good idea and a market to sell too. And then one has to make the investment. But women tend to be more careful in taking out loans therefore they underinvest in their business-with the resulting lower growth and income generation. So, women entrepreneurs need to be encouraged to take more, calculated risks - and this requires better access to financial services, more financial literacy and better business knowledge.

The BiD's Women in Business Challenge is really welcome. It has helped to increase the rate of women participants to 35% by focusing on really good business ideas and also by providing the needed coaching and support. Establishing local and national associations for women-owned businesses are also powerful means of sharing knowledge and best practices, building a network and opening markets. And, do not underestimate the social support and encouragement offered by other women business owners.

The impact of this marketplace is real-for the business owners, for the investors and for whole communities thanks to the nearly 5,000 jobs created as a result of BiD's deals. I wish you and your partners around the world great success in continuing to deepen and expand the global connections of investors, entrepreneurs and coaches.

Thank you.

(1) Economy Profile: Rwanda --Doing Business, The World Bank and International Finance Corporation, 2012