Dimitar Vasilev

Small and medium-sized enterprises in Bulgaria: Trends and challenges in their debt financing Dimitar Vasilev

Bachelor Thesis from the year 2009 in the subject Economics - Finance, grade: 1,7, Furtwangen University; Villingen-Schwenningen, language: English, abstract: In modern economic conditions, conducting business activity of any kind without availability of debt finance is improbable. The private sector in Bulgaria face the challenge of maintaining sufficient amount of capital to successfully satisfy both working and investment needs. Debt finance products offer an ideal way to satisfy those needs. Small- and medium-sized enterprises are main employment generator and key economic growth factor. They play primarily role in forming both GDP and Value Added of the country. However, SMEs have experienced a vast amount of economic and social problems. Main problems groups can be brought down to: - Inappropriate business environment for the development of SME (administrative, legal, poorly developed business consulting services and regional business centers etc.) - Insufficient financial assistance Since capital markets in Bulgaria are still underdeveloped and alternative sources of finance are hardly present, bank loans/credit lines along with supplier/customer debt prove to be a primary source of capital for small- and medium- sized enterprises. In a bank-based financial system like Bulgaria, banking system is a key factor of economic growth with a major role in productivity, investment levels, innovation and expectation of entrepreneurs. All those factors explain the importance of the chosen topic on regional and national level. Purpose of this work is to create a comprehensive profile of the SME sector in Bulgaria; to pinpoint and analyze its problems toward access to external capital as well as to evaluate trends and challenges in SME debt finance. Key question on which this work attempts to answer is: What are the trends and challenges in the corporate debt financing sector? In order to get there, specific tasks will need to be accomplished - Creation of a