There is a need for incentives for small and medium enterprises to strengthen their capital and thereby reduce risk and facilitate access to financial resources, this is the message from the round table of the Croatian Banking Association ‘Entrepreneurs and banks together on the path to recovery’ which brought together Croatian economic experts and analysts.
The aim of the gathering was to present proposals for measures to facilitate the operations of small and medium entrepreneurs who are inextricably linked to banks as dominant financial institutions. Economic analyst Velimir Šonje outlined the main characteristics of small and medium enterprises in Croatia, which are characterized by low productivity, the highest return on capital, and an above-average share in short-term debt. On the other hand, these enterprises have the greatest growth potential. However, since medium and small enterprises are smaller, they are susceptible to fluctuations, have high transaction costs, as well as collection problems and other risks, Šonje emphasizes that they are a risky segment for banks. – The priority must be to strengthen the capital of small and medium enterprises – he emphasized. Petar Lovrić, president of the Association of Small and Medium Enterprises, highlighted the illiquidity of small and medium enterprises as a fundamental problem exacerbated by the crisis.
– No matter how much we fight against corruption, illiquidity produces new corruption – emphasized Lovrić, who also pointed out other obstacles such as difficult access to finance, lack of transparency, and a dominant negative perception of entrepreneurs. Lovrić proposes a solution in the form of encouraging investments in promising sectors such as green industries or the ICT sector, creating jobs. It is necessary, believes Šola, to facilitate and ensure access to finance and enable loan restructuring. On the other hand, the president of the HUP Financial Business Association, Sandi Šola, spoke about the banks’ stance and their view of the relationship with clients. He highlighted the basic postulates of banking such as security, liquidity, and profitability that banks must take care of.
