Identifying and Assessing Vulnerable Micro-Enterprises in Lithuania

The aim of this research was to clarify the concept of vulnerable micro-enterprises (MEs) and develop a set of indicators for identifying and analyzing developments in vulnerable MEs in “catching up” economies in the context of the regulation on the Social Climate Fund (SCF). The case of Lithuania is studied. A retrospective analysis of business structure research indicators during the period from 2010 to 2023 was carried out. The method of the median was applied to determine thresholds of indicators above (below) which a ME is considered vulnerable. Absolute and relative business structure research indicators were calculated to provide estimates of the number of vulnerable MEs and reveal their role in the economy. The results revealed the number and share of vulnerable MEs which experienced high fuel expenditure (above the median (1M), 1.5M, or 2M). Historically, these MEs created a share of added value and provided employment opportunities. The share was found to vary in accordance with economic activity and the Lithuanian municipality, suggesting that the distribution of financing from the SCF should consider aspects of economic activity and regionality. A number of MEs had an essential share of fuel expenditure in their total operating costs. Vulnerable MEs demonstrate low or negative profitability, and may be insolvent; therefore, they cannot invest in building renovation or environmentally friendly transport. Thus, the research results indicate the need for discussions regarding financing vulnerable MEs in Lithuania.