ID :
85477
Wed, 10/21/2009 - 17:24
Auther :
Shortlink :
https://oananews.org//node/85477
The shortlink copeid
SMEs EXPECT CONDITIONS TO IMPROVE BY 2011, SAYS EIU REPORT
KUALA LUMPUR, Oct 21 (Bernama) -- Small and medium-sized enterprises (SMEs) expect a broad return to pre-crisis levels of availability of finance in 2011 or earlier, according to the Economist Intelligence Unit (EIU).
In the Asia-Pacific and Latin America, finance is expected to start flowing
again much sooner than other regions, it said in a report titled "Surviving the
Drought: Access to Finance among SMEs".
Launched Wednesday, the report was gathered from an EIU survey of 750 senior
executives from SMEs around the world on their perceptions of finance conditions
in August 2009.
The survey was sponsored by the Association of Chartered Certified
Accountants (ACCA), Certified General Accountants Association of Canada and CPA
Australia.
The positive outlook of SMEs expecting improvement by 2011 reinforced the
need for governments to remain vigilant and avoid complacency until 2011, the
report said.
ACCA executive director for brand, Neil Stevenson, said many SMEs were of
the view that they could pick up where they left off with the return of
favourable operating and financial conditions over the next two years.
However, he said, the survey showed the supply of equity finance, whether
from individual investors, institutions or friends and family, was expected to
grow at a slower rate than bank lending.
The report said the SME sector was generally growing in terms of both
revenue and employment, and expected to grow faster as the global economy
continued to recover.
It is clear that weak cash positions will present a serious challenge for
the sector in the medium term and profitability will take much longer to recover
than revenue, it said.
The EIU survey also found that access to finance for SMEs has been squeezed
and small firms are cutting costs and improving cash management.
SMEs also expect a lack of funding to be the main constraining factor on
their businesses over the next two years, which has led to postponing investment
to preserve cash, Stevenson said.
Therefore, he said, early signs of improvement in the economy could be
misleading and policymakers should remain on the alert until at least 2011.
The three accounting organisations involved in the survey also called for a
continued focus to encourage growth in the SME sector through lighter
regulations, supportive policies, selected fiscal incentives and reasonable
labour market flexibility.
-- BERNAMA
In the Asia-Pacific and Latin America, finance is expected to start flowing
again much sooner than other regions, it said in a report titled "Surviving the
Drought: Access to Finance among SMEs".
Launched Wednesday, the report was gathered from an EIU survey of 750 senior
executives from SMEs around the world on their perceptions of finance conditions
in August 2009.
The survey was sponsored by the Association of Chartered Certified
Accountants (ACCA), Certified General Accountants Association of Canada and CPA
Australia.
The positive outlook of SMEs expecting improvement by 2011 reinforced the
need for governments to remain vigilant and avoid complacency until 2011, the
report said.
ACCA executive director for brand, Neil Stevenson, said many SMEs were of
the view that they could pick up where they left off with the return of
favourable operating and financial conditions over the next two years.
However, he said, the survey showed the supply of equity finance, whether
from individual investors, institutions or friends and family, was expected to
grow at a slower rate than bank lending.
The report said the SME sector was generally growing in terms of both
revenue and employment, and expected to grow faster as the global economy
continued to recover.
It is clear that weak cash positions will present a serious challenge for
the sector in the medium term and profitability will take much longer to recover
than revenue, it said.
The EIU survey also found that access to finance for SMEs has been squeezed
and small firms are cutting costs and improving cash management.
SMEs also expect a lack of funding to be the main constraining factor on
their businesses over the next two years, which has led to postponing investment
to preserve cash, Stevenson said.
Therefore, he said, early signs of improvement in the economy could be
misleading and policymakers should remain on the alert until at least 2011.
The three accounting organisations involved in the survey also called for a
continued focus to encourage growth in the SME sector through lighter
regulations, supportive policies, selected fiscal incentives and reasonable
labour market flexibility.
-- BERNAMA
