Entrepreneurs ask for help in exchange for taxes

The topics were discussed with representatives of the National Fund for Small and Medium Enterprise Loan Guarantees (FNGCIMM) and the Post-Privatization Foundation, partners in the event.

“We understand that you enforce more taxes, to maintain the level of budget revenues, but what is the state doing to help us amid crisis?” were the words of entrepreneurs upon meeting Government authorities. A minimum tax for companies was applied as of May 1, with impact on small and medium enterprises (SME).

“In Romania, everyone, from the prime-minister and Finance minister to the average policeman sees entrepreneurs as tax evaders. This is a big mistake that needs to be repaired,” one of the country’s most renowned entrepreneurs, Marius Ghenea, said. A solution for SME problems would be the Risk Fund, an initiative launched last year and supported by the SME Ministy, to help start-ups. “I cannot say what capitalization it should have, it depends on the partners we are to attract,” the CEO of the Post-Privatization Foundation, Peter Barta, said. “It should operate similar to a venture capital fund,” Barta added. As for the guarantee fund, it will recommend the SME Ministry a strategy change, given that the institution is using most of the available funds to cover for loans previously granted, instead of supporting new investments made through borrowed funds.

While lending growth fell to 10 percent in the first four months of 2009, from 40 percent in 2008, the number of guarantees granted by the fund rose 250 percent year-on-year. Meanwhile, the rate of payment demands from banks rose significantly to the level of payments made in the past six years. “This shows that SMEs are in a crisis and they cannot pay debts to banks. We plan to lower exposure on guarantees for the current loans and increase support for credits granted for new investments. A balanced ratio would be 50 percent to 50 percent,” according to FNGCIMM President, Aurel Saramet.

The General Manager of Banca Transilvania lender, Robert Rekkers, admitted that, in the first quarter of 2009, the banks faced problems due to poor performing loans. “We also had such problems and part of those loans are in the SME sector, because these companies have a higher risk degree,” Rekkers said.

In the first four months of 2009, the guarantee fund approved 1,700 guarantee demands, worth €130 million. Some 82 percent of the demands were for existing loans, Saramet said. By year-end, FNGCIMM plans to have a guarantee balance worth €450 million.

“Accessing the guarantee and counter-guarantee funds could lower banks’ provisions by as much as 60 percent on the SME loan segment,” Saramet said. The counter-guarantee fund’s capital is to amount to €100 million, according to SME Ministry State Secretary Gheorghe Marin.