LE FINANCEMENT DES PME EN BULGARIE: UNE ÉTUDE EXPLORATOIRE DE LA PÉRIODE DE STABILITÉ RELATIVE DE 2000 À 2004, SUITE À L’INSTAURATION DE LA CAISSE D’ÉMISSION (CURRENCY BOARD)
THE FINANCING OF SMES IN BULGARIA DURING THE PERIOD AFTER THE IMPLEMENTATION OF THE CURRENCY BOARD (2000 – 2004)

Summary/Abstract: The privatization and restructuring of large state-owned companies in Central and Eastern European countries led to the dismantling of those companies and the emergence of many micro, small, and medium-sized enterprises. According to the official statistics, over 95% (National Statistical Institute, 2004) of the enterprises in Bulgaria could be classified as micro, small, and medium-sized. In the same time, the financing of those businesses was considerably difficult, as the market-based mechanisms were not efficiently and fully integrated in the relationships between the partners. The limited access of the businesses merely to banking financing could be explained by the lack of trust, the reliability and relevance of the accounting information, and the institutional constraints imposed by national banking authorities. Fortunately, the establishment of the currency board in 1997 has resulted in the expansion of the supply of loans by local banks. In this paper, we studied the structuring factors of the sources of financing of the micro, small, and medium-sized businesses in Bulgaria during the period after the implementation of the currency board. Focusing primarily on the period 2000 – 2004, we used publicly available data and soft data collected through interviews to study the cases of several enterprises. The results show that, contrary to the appearances, the real interest rates required by the financing institutions at that time were often much higher than the one advertised, leading to a high cost of capital, and that the access to the bank financing remained limited. The research contributes to the literature related to the studies of the post-communist transition period of companies in Eastern and Central European countries.

• Details
• Contents