HGSMEs & Innovation“Access to Finance”

Module

A Proposal for a Pilot Survey Questionnaire

(Draft)

THE OBJECTIVES OF THE PILOT SURVEY

P. Sicari OECD Statistics Directorate

Detecting and Tracking Financing Gaps !

The Main Objective:

What for an approach?

Limited advantages from a static approach: the analysis of financing gaps must vary according to firm size and

sector of activity

Collateral Objective:

Determining wether debt and equity finance vehicles display

a different impact on firms’ growth, taking firm size and

sector of activity into account

THE SURVEY’S TARGET

1. Because of their pioneering role in economic growth.

2. Because of their easier access to risk capital, that allows for a fair comparison of the (allegedly) different impacts of debt and equity finance on growth.

P. Sicari OECD Statistics Directorate

MAIN FEATURES OF THE SURVEY QUESTIONNAIRE (1)

P. Sicari OECD Statistics Directorate

Two different but parallel level of analysis:

• Growth-Oriented Investments and Expenditures

•Financing Vehicles

The survey will highlight not only the firms’ demand for every category of financing vehicle, but also its

causal link to specific forms of investments!

MAIN FEATURES OF THE SURVEY QUESTIONNAIRE (2)

P. Sicari OECD Statistics Directorate

Firms will be requested to specify:

The total amount of new Growth-Oriented Investments and Expenditures made during the reference year.

The amounts of new Growth-Oriented I&Es directed to the following sub-categories: ICT, PRODUCT, PROCESS and HUMAN RESOURCES.

How, in percentage terms, the 4 amounts of the previous point were subdivided into (suggested) components.

MAIN FEATURES OF THE SURVEY QUESTIONNAIRE (3)

P. Sicari OECD Statistics Directorate

Firms will be requested to specify:

How new Growth-Oriented Investments and Expenditures were financed, by indicating the total amount covered through Debt and/or Equity finance.

How, in percentage terms, total amounts of Debt and Equity were subdivided into single Debt and/or Equity financing vehicles.

Whether planned Growth-Oriented I&Es have been somehow affected by an inability in borrowing sufficient funds.

MAIN FEATURES OF THE SURVEY QUESTIONNAIRE (4)

P. Sicari OECD Statistics Directorate

Specific sections surveying the relationship between firms and debt/equity finance providers.

Objective ?

Trying to determine the exact source of possible financing gaps:

Are they demand-side or supply-side?

MAIN FEATURES OF THE SURVEY QUESTIONNAIRE (4BIS)

P. Sicari OECD Statistics Directorate

How to define the exact nature of financing gaps?

oBy exactly determining the temporal sequence of active and passive interventions of all possible

finance providers (Who was the first provider the firm applied to? Successfully or unsuccessfully?)

oBy demanding the firm to indicate all possible reasons that could explain its failure in reaching agreements with debt and/or equity providers

THE POLICY IMPLICATIONS (1)

P. Sicari OECD Statistics Directorate

SMEs

FINANCE PROVIDER

S

Usually claim they have a restricted access to financing due

to shortage of supply

Claim there is plenty of “unplaced” financing due to low average quality

of firms’ investment projects

THE POLICY IMPLICATIONS (2)

P. Sicari OECD Statistics Directorate

POLICY MAKERS

Demand-Side Oriented

Supply-Side Oriented

What policy to foster Access to Finance?

Policies aiming at easing access to bank loans for HGISMEs, usually by means of

state guarantee schemes.

Policies aiming at improving HGISME

investment readiness and fostering the

quality of their growth strategies.

THE POLICY IMPLICATIONS (3)

P. Sicari OECD Statistics Directorate

POLICY MAKERS

….the Current Situation……

Absolute prevalence of supply-side-

oriented supporting

policies

Increasing commitment

towards rationalization of public spending

THE POLICY IMPLICATIONS (4)

P. Sicari OECD Statistics Directorate

…to conclude, an example of the main policy issues addressed by the survey questionnaire:

If almost all public policies supporting SME’s access to finance aim at reducing restrictions by compensating finance providers for higher operational risks;

and if, as it seems to be, there is no clear evidence of any global shortage of financial resources to invest:

Aren’t we by chance just fuelling market imperfections by not focusing on the demand-side in order to improve the

investment readiness of firms, while preferring to act through risk compensation schemes that might produce inefficient

spending??? (additional resources would flow right were they are already

available)