文献信息：
文献标题：Financing in SMEs: Case of the Baltic States（中小企业融资：以波罗的海国家为例）
国外作者：Ramona Rupeika-Apoga
文献出处：《Procedia - Social and Behavioral Sciences》,2014, 150:116-125 字数统计：英文2177单词，11410字符；中文3954汉字
外文文献：
Financing in SMEs: Case of the Baltic States
Abstract Access to finance represents one of the most significant challenges for SMEs’ entrepreneurs. To ensure SMEs creation, existence and growth it is vitally important to understand the financing needs of SMEs and entrepreneurs, the main obstacles to finance availability and accessibility. The study indicates the difficulties in SMEs financing for the three Baltic States and provides the governments and other stakeholders with a tool to understand SMEs’ financing needs. The study results highlight importance of alternative resources of external financing for small developing countries such as the Baltic ones and the need to support the design and evaluation of policy measures and to monitor the implications of financial reforms on SMEs’ access to finance.
Keywords: SMEs financing, access to finance, alternative finance recourses, the Baltic States
1.Introduction
2008-2009 financial crises has effected availability of external financing for SMEs more dramatically than large enterprises, in the form of higher interest rates, shortened maturities and increased request for collateral. As a result nowadays access to finance represents one of the most significant challenges for SMEs’ entrepreneurs. In the Baltic States SMEs form the largest part of companies, providing the majority
of jobs. Nevertheless, SMEs commonly follow “niche strategies,” using high product quality, flexibility, and responsiveness to customer needs as a means of competing with large-scale mass producers (see, for example, Hallberg, 2000 and Snodgrass, 1996), many researchers have highlighted the shortage of financial resources and access to finance as one of the main barriers to SMEs innovation capacity. Baltic companies find difficult to obtain commercial bank financing, especially long-term loans, for a number of reasons, including lack of collateral, difficulties in proving creditworthiness, small cash flows, inadequate credit history, high risk premiums, underdeveloped bank-borrower relationships and high transaction costs.
Over the past two decades, the Baltic exchanges have strived to address their clients’ needs by employing the latest developments and innovations, and in taking the lead in reforming the securities market. This process has been accelerated by integrating with one of the world’s largest exchange operator and technology supplier across six continents, NASDAQ OMX Group. Altogether, above eighty companies are listed on two Baltic equities lists, which had a market cap of around EUR 5.8 billion in July 2013. The biggest equity market is in Lithuania, then in Estonia and the smallest in Latvia. For SMEs the equity market is more available than the bond market. Unfortunately, the choice of making company shares available for public purchase is in most cases only possible for already well known and with good reputation as well with high growth potential ones. Only in such cases companies can attract investors and to raise public interest. There are strict entry requirements imposed on companies wishing to go ahead with this process. Nevertheless such small listed company quantity and market cap shows that capital market availability is even more problematic than banking loans.
2.Literature Review And Hypotheses
2.1.Access to finance as a challenge for SMEs’ existence
Over 2007-2010 in most countries, SMEs faced more severe credit conditions that did large enterprises, in the form of higher interest rates, shortened maturities and increased request for collateral (OECD, 2012). After a slight improvement in 2010,
credit conditions tightened in most countries in 2011, possibly triggered by an increased awareness of risk on the part of lending institutions. In the Euro area, trends in nominal interest rates reflected tensions on sovereign debt, which increased at the end of 2011, as the interest rate on national debt is usually a lower threshold for the cost of financing in the remaining sectors. A broad range of studies based on various surveys have highlighted that access to finance is one of the main challenges in the way of companies’ growth and development, especially in the case of small and medium enterprises (Peachey, 2004; Beck, 2006; Beck, 2008; ECB, 2012). Numerous studies that use firm-level survey data demonstrate that access to finance and the cost of credit pose barriers to SME financing (Scholtens, 1999; Schiffer, 2001; Galindo, 2003; IADB, 2004; Beck, 2006(a); Beck, 2006 (b)). Similar results were found also in other studies: access to credit is one of the biggest constraints for SMEs in Colombia (Stephanou, 2008); lack of access to finance together with management, labour skills and regulation are the main constraints to growth of SMEs in the UK (Binks, 1997); inability to raise external finance in Slovenia is one of the main obstacles for the SME sector underdevelopment (Hutchinson, 2006); lack to access of external finance is one of the main problems in most of Central and Eastern Europe (Anderson, 1997; Budina, 2000; Gros, 2000; Konings, 2003).
Conducted literature and surveys review shows that importance of access to finance significantly differs by country development level, business environment and economic prospects.
H1: Access to finance is one of the main challenges for SMEs to doing business in the Baltic States
2.2.Alternative finance resources
When a company wants to raise money, one of its first decisions is whether to do so by bank lending or by issuing bonds and shares. In the 20th century, most company finance, apart from share issues was raised by bank loans. But since about 1980 there has been an ongoing trend for disintermediation, where large and credit worthy companies have found they effectively have to pay out less in interest if they borrow from the capital markets rather than banks. The tendency for companies to borrow
from capital markets instead of banks has been especially strong in the US, whereas in Europe the most popular external resources of finances are bank loans, bank overdrafts, trade credits, when other resources as securities, venture capital and other funds are seldom used.
H2: The importance of alternative financing for the Baltic States is growing
3.Methodology
3.1.Research Goal
In this study the author aims to highlight importance of alternative funds as a source of external financing for the Baltic States SMEs. The research indicates the difficulties in SMEs financing and provides the governments and other stakeholders with a tool to understand SMEs’ financing needs that helps to improve the access to financing for companies and to support the design and evaluation of policy measures and to monitor the implications of financial reforms on SMEs’ access to finance.
During development of the paper the generally accepted qualitative and quantitative methods of economic research were used including comparative analysis and synthesis, graphical illustration methods.
3.2.Sample and Data Collection
The analysis conducted in this paper is based on data and statistics provided mainly by the Baltic States Central banks, Venture Capital funds and grants programmes, by certain empirical studies and by the World economic forum data base.
3.3.Analyses and Results
Survey on the access to finance of small and medium-sized enterprises (SMEs) in the euro area conducted by ECB has highlighted that in 2013 “Access to finance” was second ranked most pressing problem faced by SMEs in the Euro Area (16%), with a wide divergence across countries, with similar results in previous years (see Fig 1).
On the high side, 32% of the SMEs in Greece, 23% in Spain and 20% in Ireland, Italy and the Netherlands mentioned access to finance as the most pressing problem, compared with around 8% of the SMEs in Germany and Austria on the low side (see Fig. 2).
Finding customers is the main concern for euro area SMEs (24% of euro area SMEs), whereas availability of skilled staff or experienced managers (14%) and cost of production or labour were mentioned as other very important obstacles for doing business.
Across euro area countries, when asked how pressing “access to finance” is as a problem in their current situation, a very large percentage of firms in Greece (61%), Spain and Italy (both 50%) and, to a lesser extent, Portugal (40%) reported that this is a very pressing problem (scale 7-10), while the corresponding percentage in Germany