Medium enterprises embrace the national economy
Monday, July 15, 52
Baghdad / Emad Al-Amara
Economic analyst Abdul Sattar Abdul-Jabbar Moussa said that the practical applications of small and medium enterprises in many countries stressed the need for such institutions, regardless of the rate of progress and economic and social development, as the adoption of the national economy, but they need funding.
Small and medium enterprises
Between Moses and "morning" that "the importance of small and medium enterprises appear through the exploitation of energies and possibilities and the development of expertise and skills being
"It is important to diversify the national economy in many aspects as it is one of the fertile areas for the development of new creations and ideas, as well as they are the seeds of the core of large institutions."
"These projects are characterized by competitive nature, which is reflected in a large extent on the volume of sales and rates of return of activity," pointing out that
"these institutions support the industrial strategy based on national development plans, and is a means to support agricultural production and contribute to the mobilization of capital, Their contribution to increasing savings, which will lead to increased investments."
"These institutions are often dependent on local resources and spin-offs of large enterprises, thus contributing to reducing the waste of these resources and reducing reliance on imports of raw materials," Moussa said.
"These institutions contribute to strengthening the national economy through large institutions through Distribution of their products or supply them with production inputs or through subcontracting with large enterprises manufacturing
Some components or some of the production process necessary for the final product, which is not economically feasible to implement by the large enterprise, so it has a significant role in expanding the base of domestic production.
The role of finance
In a related context, a member of the Center for Arab and International Studies, Dr. Amr Hisham that the issue of funding comes at the forefront of the problems faced by small and medium enterprises.
He stressed the existence of a wide variety of sources of institutional finance that respond to different levels of growth of institutions, whether small loans or government support and advanced modes of financing, including entry into the stock exchange.
"Banks and specialized financial institutions play an important role in overcoming the obstacles imposed by the conventional loan," he said.
Stressing "one of the most convenient alternatives that Found for medium and small enterprises' investments is the rental loan, a pattern of newly created financing in which a property or equipment is delivered for a specified period of time against agreed installments.
"This type of financing is flexible and easy to compare with conventional investment financing," he said.
"Risk capital as an economic tool can provide the project with flexible and long-term capital through its extensive ownership of the enterprise, as well as emerging and developing management assistance, especially for institutions with new ideas."
Risk capital means the provision of equity capital to establish or develop institutions.
Risk capital is normally pooled by investors in the form of a fund used to finance investments in private businesses through equity participation and 20% to 40% ownership of capital.
This service is usually through venture capital companies or banks and individual financiers.