Proposal Of A Common Scoring System For Selection Of Eu Funded Projects Developed By Romanian Companies

Since the start of the European Union Structural Funding Programs 2007-2013, especially those focused on financing investments proposed by private companies, a big change seems to be taken place. Large numbers of companies have applied for grants within these programs and especially for funding under the European Regional Development Fund (ERDF). But after the initial enthusiasm and initial success reported by both the Management Authorities and private beneficiaries big issues have aroused regarding lack of financial resources for co-financing to support investments or expenditures in the initial stages funding the project. Under this context the banking sector was called for support and was expected to be heavily involved in ensuring external financing. This was not as initially predicted. A big concern came from the fact that the projects, even if achieved excellent scores on the technical evaluation from the management authorities, had huge problems in receiving even basic approval from the banking system. Since it seems that most of these inconsistencies are derived from the evaluation phase of projects this study tries to focus on establishing an equilibrium between banking analysis indicators and the scoring system used by the European Union management authorities. Identifying common criteria used for selection of good sustainable projects to be funded within European Structural Funds constitutes a big challenge for the management authorities and for the banking institutions as well. The applicants must realize financing application based on a set of indicated criteria. In order to achieve financing, these entities learned to modulate their financial indicators and their business plans according to the requirements. But a large number of already approved projects by the ERDF managing authorities found themselves in impossibility to comply with banking standards as well. Correlation of both European Union and banking system criteria, especially the Cost and Benefit Analysis Indicators with the banking financial indicators could be a great solution to current challenges: making the projects proposed for financing bankable, also, and thereby increase the absorption capacity of the beneficiaries. To solve this problem the current study proposed the creation of a mixed scoring assessment system containing 15 indicators for which were established various evaluation values. The main goal of the system was to fulfil both the evaluation criteria of European Union management authorities and the creditworthiness criteria used by the banking sector. In the final stage of this paper the assessment system was tested over a number of 50 Romanian companies, which were selected for European financing.