Strategies of the Development of Entrepreneurship and SME

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