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Financing source for SMEs

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29.05.2001, 00:00 8

The National Council of Private Small and Medium-sized Enterprises in Romania (CNIPMMR) has announced it would open a line of credit worth 975 billion lei aiming at the development of SME activity.

The funds will be available through the Romanian Commercial Bank (BCR). SMEs currently benefit from 38% of the loans granted by BCR to the private sector.

The government decided that, starting with the beginning of this year, a guarantee fund for the banking credits should be established in order to facilitate the development of this kind of financing. Fifty billion lei were allotted from the state budget for this fund, with a higher amount to be released next year.

The most pressing problems encountered by SMEs are increased fiscality, red tape, as well as the delay in enforcing Law 133/1999 regarding the sale of unused assets of state enterprises.

Ovidiu Nicolescu, CNIPMMR chairman, says that SMEs need the establishment of guarantee and co-guarantee funds through the enforcement of existing legislation and access to the unused spaces or equipment belonging to the state-owned companies.

Privatisation minister Ovidiu Musetescu pledged to simplify procedures for entrepreneurs' access to the unused assets from state-owned companies.

Moreover, private entrepreneurs have to pay additional taxes levied by some local administration councils and face the unfair competition coming from foreign companies operating in the depressed areas.

SMEs representatives request that VAT payment should be done when the bill is cashed in and not when it is issued, but the Finance Ministry disagrees with such a measure.

According to Bogdan Baltazar, BRD Group Societe Generale chairman, "the bedrock for SMEs development is cutting the inflation rate by cleaning the real economy and taking measures to stop the cash-flows from companies paying their dues to the state budget towards "state-assisted" companies, especially the large loss-making utilities."