engleski

Microcrediting as a factor in development of small business in Bosnia and Herzegovina

After the collapse of financial markets and real estate markets in USA, the impact of the global economic crisis was soon reflected in the rest of the world. With the problems of some of EU members, long-term aid couldn't be expected even from the most powerful EU countries pressed by the problems of the troubled states. Without stable long-term financial system, development of domestic economy couldn't be expected, especially if we know that the financial industry is always looking for higher profits ie return of equity, and has a tendency to downgrade incoming country economies by financing imports and trade in goods in favour of its domestic industry ie country of origin. Thus, the main development factor of domestic industry and small business is stable and liquid financial system which is strategically focused in financing production, not consumption. Consumption needs to be financed ie credited, but only when it comes to cases of purchase goods and services from local manufacturers and service providers. On the example of some transition countries, we will investigate the consequences of leaving a large part of the financial system in the hands of foreign owners that can not be conditional on the terms of who to fund, therefore not able to pursue development projects of particular industries. Fifteen years ago micro crediting sector experienced a great development, that was carried out, depending of the state, under similar conditions as the institution organisational savings and credit cooperatives, credit unions, micro-credit organisations, foundations etc. The primary role in the fight against the world poverty was access to financial markets for those who didn't have it and self-employment. Due to world economic crisis, in the last few years the needs for microfinancing have became more pronounced, even in developed countries of EU, not only in third world countries where microfinance model was born in late seventies. Due to these facts, EU commission in the terms of microcredit defined the amount of microcredit not to exceed 25k € per user. Furthermore the European Commission (EC) and European Investment Bank (EIB) through the European Investment Fund (EIF) supported and financed development of microcredit for all member states and candidates for EU. According to the World Bank in 2008 only 18% of the adult population in BiH had access to the financial sector, while the rest of the population was not able to fund own entrepreneurial projects. The main role of microcredit institutions is providing a full range of microcredit services, from poor people, unemployed to small and medium business who have needs for more flexible and individualised service conditions ie economically active population that attempts to activate, but banks didn't show any interest. We will present the results of primary research conducted on the entire territory of BiH, on a representative sample of 1152 respondents without access to banking market ie their preferences and willingness for establishing private business if the financing was allowed.

microcredits; entrepreneur; bank; crisis

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