engleski

Availability Analysis of Alternative Methods for Financing Small and Medium-Sized Enterprises in the Republic of Croatia

Entrepreneurship is often seen as the main driver of the country's economic growth, mostly due to the ability to develop new business opportunities, thus resulting in growth of competitiveness and productivity of labor as well. Considering that the Republic of Croatia, as well as numerous other countries, continues to recover from the global economic crisis since 2008, the absence of funding sources is posed as a problem, especially in the segment of small and medium-sized enterprises (SME), which are considered the basis of almost every economy. Although small and medium-sized enterprises account for more than 98% of all enterprises in the Republic of Croatia, there is still no adequate system for financing such enterprises, given the high interest rates and adverse conditions of structured forms of financing, which initially rejects a significant part of quality entrepreneurial initiatives. Lack of equilibrium between supply and demand for financial resources, caused by the volatility and uncertainty within the financial markets, can be subsidized by using alternative forms of financing. Despite the historic span of the entire century, the concept of business angels, collective financing, venture capital and private equity funds has not yet achieved its full potential, especially in the Republic of Croatia. Due to that, supply and demand after alternative investment sources poses interesting subject of research. Finally, it is important to raise awareness of the existence of alternative funding sources, as well as actively work on raising potential investors' interest in the Croatian market. Through increasing of the business angels' activity and other alternative funding forms, it is possible to create a more favorable climate for the development of small and medium-sized enterprises and consequently accelerate the economic progress of the Republic of Croatia.

Entrepreneurship, Economic growth, Development

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