The President of the Republic of Azerbaijan, Ilham Aliyev, signed a decree on the establishment of the Small and Medium Entrepreneurship Development Agency (SMEDA). Commenting on this, Dr. Namiq Shalbuzov, an expert at the Center for Analysis of Economic Reforms and Communication (CAERC), noted that the new agency will improve governance in the small and medium-sized enterprises (SME) sector, provide a range of services to SMEs, coordinate government services in this field, and regulate the sector. The agency will operate as a public legal entity under the Ministry of Economy.

Dr. Shalbuzov emphasized that some SMEs previously started operations without awareness of legal requirements, business risks, or the existing sector conditions, which sometimes led to failure. Through the new agency, SMEs will have access to centralized advisory and support services, which will enhance their operational efficiency.

The agency will provide multiple services to SMEs in major cities and regions. Through the “SME House”, entrepreneurs will have access to training, consultancy, information, business incubators, innovation centers, and financial services in one location. In regions without such centers, these services will be provided through ASAN Service centers or the regional branches of the Ministry of Economy.

SMEDA will work closely with business associations to regularly analyze sector-specific challenges, present solutions to relevant government institutions, and cooperate with educational institutions to support applied sciences and innovation.

The economic impact of the agency is significant: by 2020, SMEs are expected to account for 15% of GDP, 20% of employment, and 10% of non-oil exports. The contribution of SMEs to GDP is projected to reach 200 million AZN in 2020.

Dr. Shalbuzov noted that similar SME development agencies operate successfully in South Korea, Poland, Turkey, Germany, Estonia, and other countries, providing a successful model for Azerbaijan.

The establishment of the agency is defined in the “Strategic Roadmap for the Development of Small and Medium Enterprises in the Republic of Azerbaijan” and represents the next important step in the ongoing comprehensive economic reforms. It creates favorable conditions for the sustainable development and effective regulation of SMEs, alongside the broader growth of the non-oil sector.