Forgotten by authorities, ignored by banks, but also stifled by the burden of taxes, small businesses in Romania are 94% micro, start-up-type companies, with revenue of below EUR500,000 and only 32% of them generated profit in 2013.
Instead, companies whose revenue topped EUR2 million largely (84%) reported profit, meaning this figure represents a threshold that makes the difference between success and failure. However, the companies that managed to go beyond that threshold account for less than 1.5% in the total number of SMEs in Romania, according to a survey drawn up by credit risk management company KeysFin.
The Romanian state is not giving much of a help to small entrepreneurs to make it on the market, either. Beside several state-aid schemes that offer non-reimbursable funding, but with too low budgets, small entrepreneurs can resort to banks’ help. However, banks are still not willing to trust small businesses, after they have been seriously hurt by the crisis,
As a result, with no capital allowing them to invest in their development, such businesses end up being just a source of income for entrepreneurs and in some cases for the family, but they do not create any added value on the market.
At present, Romania has around 200,000 companies with no employees, meaning these are kept alive just to offer a salary to those who set them up.
The largest part (26%) of small and middle-sized companies in Romania, with revenue of below EUR500,000 and up to EUR5 million, are found in the Bucharest-Ilfov area.
(English version by Catalina Apostoiu)