Dr. Boyko Takov: Courage and Team Spirit Will Help Bulgarian SMEs Overcome Crisis

Business | January 8, 2021, Friday // 15:56|  views

Focus Agency

The CEO of the Executive Agency for the Promotion of Small and Medium-sized Enterprises Dr. Boyko Takov in an interview with Focus agency. 

Focus: Did the problems of small and medium-sized enterprises deepen in the second part of the year as a result of the pandemic?

Boyko Takov: Yes, unfortunately there was a noticeable deepening of the problems for companies in the second half of the year. We all see what sectors are the most affected, these are the tourism and restaurant industry, but besides them many companies in the supply chain have suffered. In other sectors the picture is more contrasting: there are companies that are in a very difficult situation, as well as those that have managed to overcome difficulties and are growing. Examples of well-developing enterprises in the current environment are abundant in the IT sector, the automotive sector, the cosmetics and essential oils sector, companies from the food processing sector and many others. Of course, in general, the situation is extremely complicated for Bulgarian small and medium-sized enterprises (SMEs), but let's not forget that it is a consequence of the situation globally. At the moment, there are difficulties everywhere and we, being an open economy, are immediately influenced by what is happening with our main trading partners.

Focus: What has the Agency done during the year to help SMEs successfully get through the crisis?

B.T.: It's been a really challenging year, a year with an unprecedented business environment. Since the outbreak of Covid-19 pandemic, we have started to analyze the situation and adapt to it. This year we organized fewer events than usual for objective reasons, and of course we mainly focused on the online forms. Summing it up, I can say that we were able to hold both physical events - trade missions and business delegations, international exhibitions and fairs, as well as online events, which included training webinars and business forums for more than 3,700 participants in more than 30 events.

This year we launched our project for the mapping of different industries, through which both Bulgarian and foreign companies can draw very valuable information and analyze the environment, as foreign companies that want to invest in Bulgaria or do business with our companies will greatly benefit from it.

Besides, at the beginning of the pandemic, we launched an online information platform to help businesses to more easily navigate amidst new regulations given the situation, learn what financial instruments they currently have and can use from different sources, etc. The platform was recognized by the Clearing House to the European Commission as good practice, which is high assessment of our efforts.

At the moment, the focus of the platform is mainly on the financial instruments, and we have managed to develop it in "SME Advisor" and together with the Fund of Funds we offer companies individual advice and assistance.

Currently we are also starting two new projects – GoDanuBio "Ecosystems to promote cooperation in rural and urban areas in the Danube region through the management of the circular bioeconomy", under the Danube Transnational Cooperation Programme 2014-2020 and GoInt – "Go International" – under the Interreg V-A Cross-Border Cooperation Programme "Greece-Bulgaria 2014-2020". These projects are yet to be rolled out and we will reap the benefits for SMEs.

We have also applied and intend to apply for several more projects and are awaiting results. We start our training program in Export Hub Bulgaria - EXPO 1, where we have 15 great companies that for several months will draw experience and knowledge from proven mentors and lecturers. 

We have successfully concluded, albeit in a very difficult working environment, the 11th session of the National Innovation Fund, and provided support for 25 innovative companies worth of almost  BGN 7m.We also launched our voucher scheme and in just one month we were able to start raising offers, assessing them and handing out vouchers, which is a really good result.

We have currently provided 450 vouchers, and with a view to the resource available now, we will be able to support about 65 companies. On the other hand, with this program we also support more than 150 Bulgarian companies, providers of the respective services.

In the last month we have been able to launch another program together with DSK Bank, Mastercard and CloudCart, with which we will help 130 companies to start their online business.

We have made some serious analyses - on the state of small and medium-sized enterprises, on the external markets and the prospects for development for our companies, etc. We also became members of two very authoritative organizations - the International Network for SMEs, which operates under the auspices of the Organization for Economic Cooperation and Development - http://www.insme.org, as well as the Association of European Trade Promotion Organizations.

 The Agency's membership in these two organizations will provide added value for us and Bulgarian SMEs, respectively.

Focus: In August, you expressed hope that the crisis will prompt companies to discover new opportunities and prospects. What are your impressions – do Bulgarian small and medium-sized enterprises manage to become more flexible and innovative and adapt to the new business climate? Was the crisis a chance for some of them?

B.T.: The answer to this question could hardly be unambiguous, as we are seeing many businesses doing impressively well, others managing to control the situation, and still others who are most likely to fail. In general, I am optimistic, Bulgarians are smart people and will be able to adapt and find a way out of the situation. We see many examples of companies that are present online, have online stores and manage to market their products, even in larger volumes than before the crisis.

Others make the right optimizations and policy readjustment and also do well. All these entrepreneurs, who are proactive and looking for all possible ways of realization, also manage to exploit the situation. Yes, the crisis is both a chance and a challenge for everyone. Who and how will benefit depends on different circumstances, but especially on the management staff of the given company.

Focus: Has businesses been able to make effective use of government funds and keep jobs? Were there many bankruptcies and are they expected? Did the state aid come quickly enough?

B.T.: Answering the first question, I will quote the figures and data that we have, and they are that the measures of the Ministry of Labor and Social Policy have saved over 250 000 jobs, for which over BGN 580 million has been paid. I think the figures speak for themselves, it should also be noted that this measure has been updated twice and in dialogue with employers' organizations.

As to whether there were many bankruptcies and whether new ones are expected, I cannot not give an accurate picture or forecast. We are currently preparing our annual analysis of the state of SMEs, and it will be ready in a few months, because we need statistical data for the analytical part, and they are released stepwise throughout the year. In this line of thoughts, we will be able to specifically talk about the number of bankrupt companies and other data in a few months, when the National Statistical Institute publishes the necessary information.

Regarding timely response from the state, I would say that liquidity assistance could be provided more promptly, as any other assistance for Bulgarian companies, but on the other hand, I think that a lot of resources are channeled for the benefit of the economy and I hope it will deliver the expected result. When situation becomes difficult, the business needs funds immediately, “the next day” as they say, but unfortunately every procedure needs technical time.

Focus: What are the forecasts for an economic downturn in Bulgaria and what is it compared to the forecasts for the European Union? Are you optimistic about 2021, do you think it will be conducive to SMEs?

B.T.: Forecasts for our economy vary, for instance, the European Commission forecasts a decline of 5.1%, the International Monetary Fund – of 4.0%, the Bulgarian National Bank predicts the decline of about 5.5%. Overall, the downturn in our economy is less significant than in the leading European economies and most global economies.

For the Eurozone as a whole, projected rates range between -7.5% and -12.0%. As for your second question, I would escribe myself as a moderate optimist. There are all the prerequisites to be optimistic, we see how much progress is being made in vaccines availability, their advent will reassure the world and therefore economies. Of course, there are still many reasons for concern, it is difficult to predict now as we do not know how the situation will develop. On the eve of the New Year, I wish all health, strength, courage and team spirit.

Focus Agency, Teodora Pavlova


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Tags: Bulgarian economy, SMEs, 2021 forecast


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