Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
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eason for not borrowing bank loans. O<strong>the</strong>r reasons include high requirements for collateral,“concealed” interest on loans, complicated documentation, etc.Some <strong>of</strong> <strong>the</strong> Bulgarian banks currently focused on programs for <strong>SME</strong>s are:• Allianz Bulgaria• HVB Bank Biochim <strong>and</strong> Hebros Bank• DSK Bank• Piraeus Bank• DZI Bank• European Bank for Reconstruction <strong>and</strong> <strong>Development</strong> (EBRD)• Encouragement BankFunding is provided at costs much lower than <strong>the</strong>se <strong>of</strong> lending through institutional <strong>and</strong>project financing. Non-banking sources, in particular international programs, provide morerelaxed conditions – for example, financing <strong>of</strong> a substantially investment project in <strong>the</strong> form <strong>of</strong>short term financing. Such funds are undoubtedly attractive for <strong>SME</strong>s <strong>and</strong> provided this sourceis actively promoted <strong>SME</strong>s would focus on it. An objective need is in place for such non-bankingresource. It would help overcoming a definitely risk point in <strong>the</strong> operation <strong>of</strong> <strong>SME</strong>s. Some <strong>of</strong> <strong>the</strong>effective programs for <strong>SME</strong>s are, as follows:• Project 100Project 100 is implemented by <strong>the</strong> Ministry <strong>of</strong> Economy in cooperation with <strong>and</strong>assistance from United Nations <strong>Development</strong> Program (UNDP) through <strong>the</strong> network <strong>of</strong> businesscenters <strong>and</strong> business incubators <strong>of</strong> <strong>the</strong> Job Opportunities through Business Support Project(JOBS) – Memor<strong>and</strong>um <strong>of</strong> Underst<strong>and</strong>ing between ME <strong>and</strong> UNDP <strong>of</strong> 22 December, 2003. Theproject aims to foster a sustainable <strong>and</strong> competitive private sector by providing comprehensive<strong>and</strong> targeted assistance for <strong>the</strong> start up <strong>and</strong> development <strong>of</strong> micro- <strong>and</strong> small enterprises inBulgaria, in <strong>the</strong> sectors Production or Services.This project enables people with viable <strong>and</strong> promising business ideas to start up <strong>the</strong>ir ownbusiness through self-employment, set up <strong>of</strong> a family company or a small enterprise. Priority isgiven to <strong>the</strong> support <strong>of</strong> business ideas that involve <strong>the</strong> use <strong>of</strong> information technology <strong>and</strong>electronic communications equipment, implementation <strong>of</strong> alternative energy sources <strong>and</strong>measures in <strong>the</strong> area <strong>of</strong> energy efficiency, development <strong>of</strong> new products <strong>and</strong> technologies <strong>and</strong>such <strong>of</strong> environmental focus.• National Innovation FundIn <strong>the</strong> course <strong>of</strong> Bulgaria's accession to <strong>the</strong> European Union, Bulgarian enterprises needto enhance <strong>the</strong>ir competitiveness <strong>and</strong> <strong>the</strong>ir capacity to st<strong>and</strong> <strong>the</strong> competitive pressure <strong>and</strong>market forces. The rationale <strong>of</strong> <strong>the</strong> Ministry <strong>of</strong> Economy <strong>and</strong> Energy is based on <strong>the</strong>underst<strong>and</strong>ing that competitive advantages in industry can be achieved through development,implementation <strong>and</strong> dissemination <strong>of</strong> innovations. A targeted policy needs to be pursued toencourage innovations <strong>and</strong> R&D. Economic growth <strong>and</strong> increased productivity, respectively,depend crucially on <strong>the</strong> pace <strong>and</strong> efficiency <strong>of</strong> spreading innovations in an economy. Innovativesolutions need to penetrate all areas.To this end, <strong>the</strong> Council <strong>of</strong> Ministers adopted <strong>the</strong> Innovation Strategy <strong>of</strong> <strong>the</strong> Republic <strong>of</strong>Bulgaria. Measure 1 <strong>of</strong> this Strategy provides for <strong>the</strong> establishment <strong>of</strong> a mechanism to supportinnovative enterprises in <strong>the</strong> research <strong>and</strong> development <strong>of</strong> new products, technologies, servicesor <strong>the</strong>ir substantial improvement, referred to as <strong>the</strong> National Innovation Fund.The strategic goals set by <strong>the</strong> Fund are to increase <strong>the</strong> competitiveness <strong>of</strong> <strong>the</strong> Bulgarianeconomy through encouraging market-oriented applied research for <strong>the</strong> industry <strong>and</strong> creatingconditions to attract private capital for financing <strong>of</strong> innovations in accordance with <strong>the</strong>Innovation Strategy <strong>of</strong> <strong>the</strong> Republic <strong>of</strong> Bulgaria <strong>and</strong> <strong>the</strong> measures for its implementation.Support to enterprises shall be provided through subsidies (grants).37