Professional Documents
Culture Documents
Best Practices Guidelines-2003
Best Practices Guidelines-2003
_________________________________________________________________________________________
2003/AMM/007
Agenda Item: V.4
Purpose: Information
1
Best Practices Guidelines for Enhancing the Financing Chain for SMEs at
Different Growing Stages
Background
In the past, APEC members recognized the important role start-up companies and small and
medium enterprises ("SMEs") played in promoting economic growth. Through the recent
development of their economies, APEC members further recognize the need to support SMEs
at different growing stages, so that these SMEs can adapt themselves to a fast-changing
economy. In this regard, the establishment of financing mechanisms for SMEs at different
growing stages is essential for maintaining dynamic business and financing activities,
encouraging innovation and entrepreneurship, and enhancing economic growth and prosperity
in the APEC region. Additionally, with wide diversity among APEC member economies,
finding the best ways to financially facilitate SMEs at different growing stages is crucial to
enhancing the competitive position of the APEC region. Therefore, the establishment of best
practices guidelines for enhancing financing chain for SMEs at different growing stages is one
of the top priorities for APEC member economies.
APEC members aspire to the following best practices guidelines for enhancing the financing
chain for SMEs at different growing stages:
The initial funding for SMEs at the start-up stage is angel funding, i.e. funding from
families and friends. When SMEs seek external funding, the following equity and debt
funding are the major sources of aid. Thus, they are of particular importance to SMEs.
Member economies are encouraged to expand the venture capital industry through
providing appropriate incentives and ensure that sufficient capital is injected into
the venture capital industry.
Member economies are encouraged to establish clear policies to facilitate
innovation and R&D funding so as to encourage start-up companies as well as
SMEs.
Member economies are encouraged to seek to develop, attract, and retain
management professionals to develop the venture capital industry and to foster the
establishment and growth of start-up companies and SMEs.
2
Member economies are encouraged to establish or strengthen government funding
programs tailored for start-up companies and SMEs.
Member economies are encouraged to improve the transparency, efficiency and
stability of their investment environment, minimize any obstacle to investments,
and encourage foreign direct investments.
2. Capital Market
A strong and robust capital market reflects a sound and healthy economy. When global
investments are channeled into capital markets, the capital markets can be employed as a
powerful tool to finance SMEs at different growing stages. Thus, an efficient and dynamic
capital market is essential for individual member economies to create value and
accumulate wealth, and is crucial for economic growth in the individual APEC member
economies.
3. Corporate Governance
Many companies in Asia are family-run, and their ownership is kept within the family.
The financial crisis in Asia revealed that such ownership and management might prove to
be a weakness in the corporate governance of such companies. Moreover, the rapidly
changing technology and globalization of the market have led to fierce competition.
Accordingly, companies need to establish a sound corporate governance environment.
Thus, it is essential for APEC member economies to enhance transparency, integrity, and
accountability to ensure the appropriate administration of corporate governance in the
APEC region.
4. Securitization
5
them with regular opportunities to receive information about their situations and to
share information.
Member economies are encouraged to enhance the functions of courts and other
relevant government agencies in respect to restructuring and bankruptcy
proceedings.
Member economies are encouraged to cooperate with other member economies to
establish a mechanism for cross-border bankruptcies.
7. Financial System
To maintain economic growth in the APEC region, APEC member economies shall ensure
that their respective financial regulatory and legal frameworks are not stifling domestic or
international competition, or otherwise inhibiting market development. Therefore,
financial regulations in individual member economics should encourage a diversity of
financial services and products to meet market needs.