Patterns of Constrains in Access to Finance for SMEs in the Western Balkans Region

What is the best model for growth and if we have it, what is the best way to implement it? These are fundamental questions in economic growth theory. Even when the same economic model is implemented in different counties the results we get are not always the same. This is so because there are many more factors influencing the model at the time when the ceteris paribus condition is removed. In order to get a glimpse of these other factors that may make a country perform better or worse than others the best approach is to make a comparison between them. Using four categories for classifying and measuring credit-constrained status for firms, this study is focusing on comparing constrains patterns in access to finance between countries in the Western Balkans region. For the analysis are used data from the World Bank-Enterprise Survey. We found that financial constrains are one of the top constrains for SMEs in the region. Also the level of integration doesn’t seem to influence the financial constrains level. For some of the countries in our analysis the perception does not reflect their comparable constrain level. Size, as expected, results negatively correlated with financial constrains and this pattern is consistent for all countries. And at last the financial deepening doesn’t seem to influence on easing financial constrains for any of the groups. This study is not focused in explaining the difference in the SMEs financial constrains patterns. The aim is to identify the best performing models and to set a track for further studies which will seek to understand the factors which characterize those countries whose models seem to have worked better.