EU CAPITAL MARKETS INITIATIVES FOR BETTER FINANCING SMEs
EU CAPITAL MARKETS INITIATIVES FOR BETTER FINANCING SMEs

Summary/Abstract: SMEs play a significant role in economic activity. They ensure a large percentage of the employment and contribute to a great extent to the economic growth and development of the EU and its Member States. However, ensuring financial resources for SMEs and for their own development it is not always easy to achieve. And it is much more difficult for SMEs to attract financial resources compared to the large companies. SMEs in the EU usually rely on banks in order to get loans and other types of financing. However, the last economic and financial crises proved that bank lending to SMEs may not be considered as the only viable solution for financing their activities. It became much clearer that other alternative resources of financing shall be promoted and most notably these alternatives shall be derived by the EU capital markets. Capital markets financing of SMEs is complementary to the bank lending. It may provide for more diversified resources and not replace completely the role of the banks. This paper looks at the barriers of SMEs in finding financial resources at affordable costs. Then it presents the new EU initiative on building a Capital Markets Union and how it will amend the perspectives of SMEs on finding more easily and at better price financial resources in the future. It presents also the other EU initiatives and measures that aim to boost financing to SMEs. Financing of SMEs will never be a simple task but if capital markets learn to play a greater role this task may become much more easy and affordable.

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