Small and medium-sized enterprises (SMEs) are generating an annual value-added growth of 13%, about 4-fold higher than that of the other companies in the non-financial sector, according to an annual report of the Agency for Small and Medium-Sized Enterprises that was unveiled on Wednesday. In comparison, national economic growth is seen at 4%-plus. The report was drafted by the Centre for Economic Development and covers the development of all 202,309 local SMEs over the 2001-02 period. The '03 data will be released by the National Statistical Institute in September. In '02 small business generated 3.5 bln levs in value added, which makes 34% of the non-financial sector's gross product. This portion is increasing, and it is seen as an indication of the sector's potential for development. To qualify for SME status a company should have a staff of up to 250. SMEs account for 99.1% of all enterprises in this country. They provide a total of 817,000 people with a job, up by 52,000 from 2001. The high productivity of small business is the driving force behind its speedy growth, experts comment. The more people a company has on the payroll, the higher its productivity. At micro-enterprises, for instance, which employ up to 10 people, productivity is growing by an annual average of 3.6%, at small enterprises with staff of up to 50 productivity has increased by 4.9%, and at medium-sized enterprises growth stands at 6.9%. This prompts foreign investors to seek big partners. The small companies, however, have mobility on their side. Investments in local small business are growing, by 32%, though at a slower pace than investments in other sectors. Unlike the EU where small business is concentrated in the production sphere, in this country the portion of SMEs is largest in trade and the services. Over 55% of the local SMEs are engaged in trade, and the maintenance of cars and household appliances, 12.1% in the manufacturing and processing industry, and 10% in the hospitality industry. The territorial distribution of SMEs, too, is uneven, with the bulk sprouting in South-western Bulgaria. A strong incentive for the sector's expansion is extensive crediting, the authors of the report note.