Croatian SMEs: Current Stage and Prospect

Small businesses in Croatia are recognized as a locomotive for economic restructuring and increase of rate of employment. Bank credits have become more accessible in Croatia for the SME sector following privatisation by foreign banks, which now participate with more than 90% in total bank assets of...

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Bibliographic Details
Published inThe journal of entrepreneurial finance Vol. 12; no. 4; p. 129
Main Authors Viducic, Ljiljana, Pivac, Snjezana, Smiljanic, Ana Rimac, Pepur, Sandra
Format Journal Article
LanguageEnglish
Published Greenwich Pepperdine University, Graziadio School of Business and Management 01.12.2009
Subjects
Bank loans
Banking industry
Banks
Collateral
Credit ratings
Employees
Equity
Financing
Interest rates
Market economies
Privatization
Profitability
Profits
Securities markets
Small & medium sized enterprises-SME
Small business
Stockholders
Studies
Croatia
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Summary:Small businesses in Croatia are recognized as a locomotive for economic restructuring and increase of rate of employment. Bank credits have become more accessible in Croatia for the SME sector following privatisation by foreign banks, which now participate with more than 90% in total bank assets of the country. Although foreign banks had a positive impact on the domestic banking market they tended to prefer household and large scale enterprise lending. Besides creating an equity gap, especially for the earlier stage non-technology based SMEs, asymmetric information leads to imperfect lending (credit rationing) even for prospective SMEs with fast revenue growth. SMEs' role in banks lending decreases with bank size: small businesses have dominant place in small banks credit portfolio (cca 50% of credits). Furthermore, small business experience obstacles in assurance of appropriate bank finance. However, there is a trend among larger banks of paying greater attention to small businesses, as well as positive development in the variety of sources used for investment finance.
ISSN:2373-1753
2373-1761
DOI:10.57229/2373-1761.1247