Public Finance and Private Sector Development

Government and public relations heavily rely on the level of management, expenditure and flexibility of public financial resources, as a population’s income and expenditure rates are bound with the execution style of these factors.

Public finance tools are one of the main and key factors to poverty reduction and wealth promotion; for increasing income level, living standards, and transparency of budgeting the revenues and expenditure of public sector entities. A stable and fair tax base, transparent, neutral and accountable expenditure and appropriate management and monitoring systems provide a platform for governments to deliver a strong enabling environment for business and effective public services.

UNICON’s capabilities in public finance include:

• Developing and building tax reforms
• Review and advice on pension reforms
• Budget process reform
• Expenditure frameworks
• Public financial management
• Providing training in the field of Public Private Partnerships (PPP)
• Mobilizing private finance at local level
• Promote improved budget practices and execution
• Regional economic integration
• Intergovernmental finance
• Strengthening the public accounting system

The importance of a competitive SME and Private sector and the development of internationally competitive business are widely accepted. Many developing countries have realized that without fulfillment of conditions for development of a strong SME sector, support of macro-level enterprises is not sufficient. It is accepted that institutional support aimed at assisting SMEs and industrial groups in developing and adapting to the changing world competition is crucial.

Inefficient financial markets are one of the characteristics of many transition and emerging countries. Usually, that can be explained by the lack of availability of equity and credits that affect primarily SMEs as well as micro enterprises. That is why our assistance in the financial sector focuses mainly on financing schemes and institutions for SMEs. We assist governments, institutions and financial intermediaries in increasing the credit supply effectively available to SMEs as well as supporting SMEs institutionally.

In this area we offer:

• Policy advice in the areas of SME development and industrial policy
• Creation and institutional strengthening of private sector support institutions, e.g. chambers of commerce, industry associations, business support centers, etc.
• Development and implementation of training programs for the support of SMEs
• Assistance in regional development by creation of adapted infrastructures and improvement of factor conditions
• Project cycle management, e.g. project formulation, monitoring & evaluation
• Project identification, evaluation and implementation of direct investments into SMEs
• Selection of financial intermediaries for the management of SME credit schemes

Privatization is another major sector of our operations towards private sector development. Our assistance in the design and implementation of privatization programs covers:

• Assistance to State Property Funds or similar organizations to privatize state-owned property
• Provision of legal support and training in drafting and finalizing privatization transaction documents (e.g. contract of sales)
• Development of privatization methods such as public subscription of shares, public auction, public tender, direct negotiations, transfer of the state or municipal control in an enterprise to private investors, lease with the option to purchase
• Improvement of technical skills, through on-the-job and workshop-based training of the staff responsible for privatization
• Development of various forms of Private Sector Participation

UNICON also assists governments and private companies in seizing the opportunities that an integrated world economy offers; such as access to foreign capital, new market opportunities and increased trade, including:

• Policy advice in investments promotion and export development; and
• Design and implementation of investment promotion programs.

Like everyone else, people living in poverty need access to a diverse range of financial services, including loans, savings services, insurance, and money transfers. Access to financial services enables the poor to increase income and smooth consumption flows, thus expanding their asset base and reducing their vulnerability to the external shocks that plague their daily existence. The availability of financial services acts as a buffer against sudden emergencies, business risk, and seasonal slumps that can push a family into destitution.

Our services in Microfinance include:

• Preparing action plan for developing MFIs activities
• Identifying basis for poverty reduction through microfinance tools
• Draft and development of legislative framework to empower MFIs
• Development of appropriate regulations and supervision policies and procedures for MFIs
• Systems design and hands on support during start-up period of MFIs
• Advice MFIs on financial structural changes
• Developing MFI personnel and Human Resource Management