ENHANCING ACCESS TO FINANCE OF SME’S: ROLE OF THE GOVERNEMNT

Abstract

There is wide accepted evidence that the SME sector is one of the most important drivers of the economy in each country. The SMEs possibility to develop and to create new jobs becomes a crucial prerequisite for economic growth and development. In addition, many studies and research have concluded that access to finance remains to be a major concern and main obstacle for SMEs growth and development in countries like RN Macedonia. This situation has been deteriorated in past few years by the global economic and energy crises. Therefore, many governments have acknowledged the importance of implementing various policies and programs aimed to support SMEs and their development.  Yet, evaluation and impact assessment of implemented government programs in general is lacking and the effectiveness of such credit schemes has not been demonstrated. The paper will examine the efficiency of subsidized credit lines implemented by Development Bank of North Macedonia with a main goal to promote bank lending to SMEs. It will attempt to assess the cost of the Government and the impact on the “supply side” in providing financing for SME sector. The method used for the research is a questionnaire based survey, composed of multiple choice questions and on-site interviews with bank’s officials.