The Western Balkans region was hit hard by the financial crisis affecting local economies through raised food prices, decreased foreign direct investments, slower export flows, diminished amount of remittances and significantly weakened domestic demand. The GDP growth has stalled similar to most of the Western economies. The banking sector was affected significantly, which led to an increase of the rate of nonperforming loans (NPL) in the local banks. This rise in NPLs across the region are reducing credit supply and therefore constraining the ability of SMEs to ease their liquidity shortfalls and grow.
Overall, the programme aims at improving the effectiveness and efficiency of insolvency resolution. At the aggregate level, effective insolvency reform is associated with a lower cost of credit, increased access to finance, improved creditor recovery, and will thus ideally lead to increased job preservation, promotion of entrepreneurship, and other benefits for small businesses.
- Improve the legislative and regulatory environment;
- Expedite the restructuring of viable firms in financial distress, thus preserving viable businesses;
- Increase the returns to creditors, measured as a percentage of recovered assets;
- Improve the efficiency of asset allocation from failed businesses to more productive ones;
- Increase the confidence among lenders and improve access to credit for new and existing businesses, in particular small and medium-sized enterprises.
- Government agencies received advisory services
- New laws/regulations/amendments/codes were drafted
- Workshops, training events, seminars and conferences were organised