MANAGING CONSTRAINTS IN SMES FINANCING - THE CASE OF ROMANIAN TOURISM SMES

Daniel Badulescu, Alina Badulescu, Olimpia Ban

Abstract


The question of adequate financing of SMEs represents a research topic of great importance for many sectors, including tourism. In this particular sector, tourism operators are facing both the general limitations and restrictions common for all small businesses, but also specific difficulties. This paper is aiming at investigating, by using a survey-based research among main institutional lenders in Romania, the availability of the financing institutions to finance small businesses operating in tourism. The objectives of this paper are as follows: to assess the main difficulties and specific ways of creditors’ involvement in SMEs’ business financing; to find out which are the main difficulties and obstacles in tourism financing, and to what extent they can be mitigated; to reveal the most important risk factors taking into consideration by banks when financing the SMEs operating in tourism. Our findings indicate that lenders are aware about the objective factors discourageing SMEs in accessing bank loans, but also that the credit supply for businesses operating in tourism is more difficult to access and less competitive compared to other ventures operating in different sectors. This limited interest of banks in SMEs’ tourism businesses needs to be counterbalanced by other financing forms and suppliers, including public funds, European funds etc.

Keywords


Tourism, SMEs lending, constraint, risk, crisis

Full Text:

PDF

References


Badulescu, D., & Simut, R. (2012). The Bank Lending to SMEs in Romania during Crisis Times. An Empirical Approach on the Relation Trust – Length – Loyalty. Conference Proceedings of the 7th International Conference on Currency, Banking and International Finance. How Does the Central and Eastern Europe Cope up with the Global Financial Crisis? Bratislava, September 27-28.

Badulescu, D., & Simut, R. (2015). Bank's Availability versus SMEs’ Expectancies in Business Financing. An Analysis on Credit Renewal. Proceedings of the 9th International Days of Statistics and Economics, Prague, September 10-12, 79-88.

Badulescu, D., Giurgiu, A., Istudor, N., & Badulescu, A. (2015). Rural tourism development and financing in Romania: a supply-side analysis. Agricultural economics (Zemědělská ekonomika), 6 (2), 72–80.

Badulescu, D., Simut, R., & Badulescu, A. (2014). Looking for Better Financing: A Quantitative Approach on Collateral Importance in SMEs Relationship Lending. Proceedings of the 8th International Days of Statistics and Economics, Prague, September 11-13, 43-52.

Beck, T., Degryse, H., De Haas, R., & van Horen, N. (2014, July). When arm’s length is too far:relationship banking over the business cycle. European Bank for Reconstruction and Development Working Paper No. 169, p. 32.

Beck, T., Demirguc-Kunt, A., & Maksimovic, V. (2005). Financial and Legal Constraint to Firm Growth: Does Firm Size Matter? Jurnal of Finance, 60, 137-177.

Beck, T., Demirgüç-Kunt, A., & Soledad Martinez Peria, M. (2010). Foreign Banks and Small and Medium Enterprises: Are they really estranged? Retrieved May 02, 2012, from http://www.voxeu.org/index.php?q=node/4828

Council of Tourism Associations in British Columbia (COTA) (2006). Financing Tourism Operations in British Columbia. Canada: COTA & Taylor Capital Corporation.

Cressy, R., & Olofsson, C. (1997). European SME Financing: An Overview. Small Business Economics, 9, 87–96.

de la Torre, A., Martínez Pería, M., & Schmukler, S. (2010). Bank involvement with SMEs: Beyond relationship lending. Journal of Banking and Finance, 34, 2280–2293.

European Commission (2015) Survey on the access to finance of enterprises (SAFE. Analytical Report 2015. Brussels: EC: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.

Hernandez-Canovas, G., & Martınez-Solano, P. (2010). Relationship Lending and SME Financing in the Continental European Bank-based System. Small Business Economics 36, 465-482.

National Bank of Romania (2014). Annual Report 2014

National Bank of Romania (2015). Financial stability report 2015.

OECD (2000). Financing newly emerging private enterprise in transition economies. OECD Publication Services.

OECD (2004). Promoting entrepreneurship and innovative SMEs in a global economy: Towards a more responsible and inclusive globalization.

RAM Consultancy Services (2005). SMEe Access to Financing: Addressing the Supply Side of SME Financing, REPSF Project No. 04/003, pp. 1-28,. Retrieved from http://www.aseansec.org/aadcp/repsf/docs/04-003-FinalMainReport.pdf.

Schiffer, M., & Werder, B. (2001). Firm size and the business environment: Worldwide survey results. Washington, DC: Discussion Paper Series. International Finance Corporation.

Toivanen, O., & Cressy, R. (2000). Lazy Entrepreneurs or Dominant Banks? An Empirical Analysis of the Market for SME Loans in the UK. Warwick Business School SME Centre Working Paper.


Refbacks

  • There are currently no refbacks.