SMEs ecosystem and banking finance support in Serbia

Abstract

There is increasing awareness that the current liquidity crisis could lead to a solvency crisis, as many SMEs compensate declining revenues by taking on more debt, often with government support. In 2020 the level of insolvencies and bankruptcies were kept in check, the number of bankruptcies is expected to spike in 2021. This raises the question of efficiency of ecosystem, about policy approaches to support SMEs in need of finance, while not overburdening them with debt, what motivated the authors of the paper to research the banking loans as the access to external sources of finance within the SMEs ecosystem support. Also is analyzed the quality of the sub-dimensions, the legal and regulatory framework, collateralization options, credit information systems and the financial literacy. Descriptive statistical methods, as well as field and desk research, were used in the elaboration of the results. Key results confirmed that SMEs create more lucrative returns to the whole national economy in the improved access to finance if provided with better service models enabled by technology and new propositions as clients - the hypothesis of the research.

Exploring global practices in providing small and medium enterprises access to sustainable finance solutions

“…The study underscores the effectiveness of policy approaches that support SMEs without overburdening them with debt, emphasizing the need for improved service models enabled by technology and new propositions as clients. This approach not only aids in the survival of SMEs but also contributes to the national economy by creating more lucrative returns (Kvrgić et al, 2021).…”

System risk management policy in banking

“…Thanks to the paradox of financial stability, current indicators can also be used to identify the accumulation of system risk. Where the values of current indicators (nonperforming loan rates, default rates or provisioning rates) are significantly "better" than their usual values or their historical assets, this can be considered an indicator of a growing risk of financial instability (Kvrgić et al, 2021). Such indicators can be considered as complementary indicators that look to the future and that are applicable primarily for determining the position in the financial system or assessing the probability of change in the financial system.…”