18 December 2017
Orkestra analyses the financial vulnerability of micro and small enterprises in both territories. This study centres on facilitating the instruments needed to reverse the current situation of 30% of the firms analysed, out of a total 500,000. See the report.
The Economic and Financial Observatory on SMEs, which is supported by the Basque Finance Institute, plans to study the evolution of these firms on a quarterly basis, using the data obtained by SABI-Informa.
In comparison with the rest of Spain, where 34% of firms are in vulnerable situations, the Basque Country and Navarre show better figures and positive evolution as per financing.
Firms in sales and services account for over half of the poor situations, with micro enterprises registering the worst figures.
When breaking down the situation by provinces, Biscay ranks lowest (31%) as opposed to Guipuzcoa (28%). In this latter case, Goierri and Donostialdea are the regions with the best financial situation.
According to Ibon Gil, deputy director of Orkestra and director of the Observatory, "the tendency is towards positive evolution, partially due to the European Central Bank’s continuing expansion policy and improved economic indicators” and he added, “it is a good time for firms to take advantage of the overall panorama to improve their situation".
In this respect, the study concludes that it is vital to continue working to improve access to financing channels in all business sectors and facilitate diversification of finance providers. It points out that it is essential to reduce SMEs' dependence on banks. The Observatory underscores that this can only be achieved by continuing to improve financial management capabilities and competences so that new non-traditional sources can be found. It also adds that we must continue working on the existing information asymmetry situations and finally, it is important to overcome firms’ cultural limitations concerning the use of non-bank financing.
