“How come they were able to reach an agreement to have the same roaming tariffs across the EU, and banking interests for SMEs vary so much? French and Germans borrow money for long-term investments at 1% and I pay 6%. I need 15-year funding for equipment because it is really expensive and banks only offer me loans for eight years,” said Ovidiu Palea, the founder the Provita medical center at the ZF IMM’19 conference, organized by ZF with support from CEC Bank and Coface.
“I wanted to buy instead of renting space, but I am not given 15 to 20-year funding so it becomes unprofitable. All these things make us less competitive against the major chains finance by investment funds.”
Analysts warn that investments in the economy are dwindling, which leads to an increase in imports.
“Romania is the only European country where retail share of imports has gone up in the past three years and I would say this is because of two things. The first is the rise in consumer spending in recent years beyond the capability of the business sector to keep up in terms of production, so the spending shifted to imports,” said Eugen Anicescu, country manager of Coface Romania.
“The second has to do with the fact that investments have been dwindling in the past three years, which led to importing mostly consumer goods and fewer goods to be used by investments.”
Other topics discussed at the conference included programs like Start-up Nation, about how startups can be supported after receiving such funding and about the role of investment funds in the development of local businesses. Doina Topala, head of the SME unit of CEC Bank said that entrepreneurs needed to be aware that to develop a business they needed to reinvest everything they made in it in the first few years.
“Banks do not usually turn down entrepreneurs not doing well financially, but for those just starting out, their own contribution is essential because young entrepreneurs must understand they most not collect their dividends in the first, second, third year but capitalize their own companies or else they will run out of working capital,” she said.
(English version by Loredana Fratila-Cristescu)