published at Portuguese Economical Newspaper “A Vida Económica”
ETHICS & BUSINESS
FINANCING: Funding: central point of economy?
It is clear that the recent cataclysm on Portuguese banking will not improve the very serious problem of SMEs ´ s in its "struggle on lack of financing", showing that the financial system continues, and will continue to be sick, taking time to show significant improvement, since it is not national but, unfortunately, of more global dimension.
ATP – Textile and Clothing Association of Portugal:
At the recent XVI Forum of the Textile Industry, in a presentation of the CLUSTER Textile Fashion 2020 for the sector, showing the way that already follows on a bet of demanding dynamic, innovative technology and creativity, diversification of products with more added value, appreciation of its human resources and anchored in modern enterprises, the sector live moments of joy with remarkable dynamism to its growing exports, on a value and exceeding € 5.000 million for 2014! This is the greatest level of textile exports after the global financial crisis. In a document well prepared with competent support in a Strategic Plan for the Sector, pointing to 2020 for a structure of 5.000 companies, 100.000 jobs and € 6.5 billion business, where € 5.0 billion in exports.
Plan focused on 3 Ways and 3 Scenarios, for which a SWOT analysis identifies the main points of strength-opportunities- weaknesses-threats, calling special attention to what this analysis considers first Threat:
Continued difficulties in access to finance and its cost: negative impacts on day-to-day management and, above all, investment in organizations!
World Economic Forum:
In the recent report "The Global Competitiveness Report 2014 - 2015" presented by this important organization, where
fortunately presents Portugal rising in several and important rankings, for a universe of 144 countries, Switzerland holds the leadership of the main international rankings of competitiveness, in five years in a row, followed by Singapore, Finland, Germany, United States, Hong Kong, Sweden, Japan, Netherlands and United Kingdom, to the most innovative countries featuring the best organizations and influencing the competitiveness of economies.
"The contribution of innovation to the future prosperity of an economy is becoming more and more critical," said Klaus Schwab, Founder and Executive Chairman of World Economic Forum. "The competitiveness requires that the main aspects related to innovation are treated correctly: starting from solid public institutions, through education and by a more conducive economic environment. It is essential that the Leaders of Companies, the Government and Civil Society work collaboratively and transparently in order to achieve this shared objective that everyone benefits.
In Europe, efforts to solve the crisis of public debt and prevent a collapse of the euro diverted the attention of deeply rooted issues relating to competitiveness. The economies of Southern Europe, such as Spain, Italy, Portugal, and the especially Greece need to continue dealing with their weaknesses with regard to the functioning and efficiency of their markets, foster innovation and improve access to finance, in order to manage and reduce the problems of competitiveness in the region.
But on the topic "The most problematic factors for doing business" in a range of 16 different items, South countries arise in 1st place, and the greatest difficulties: "Access to financing". Portugal, Spain, Italy, Greece or Ireland, all reporting, as greater difficulty, access to finance, as central point of the economy soon followed by Inefficient Government Bureaucracy!
Bank of Portugal:
The Governor of the Bank of Portugal, as the Portuguese banking system regulatory institution, referred to the fact that, in Conference on Labour and Employment, that one of the aspects that worries him more is based on the need of many Portuguese companies, with "economic viability", are going through a terrible phase of "financial stress", and without help they would contribute to the rise unemployment in the near future!
Or, in a recent Forum for Competitiveness recommended for companies which have very high debt ratios to be essential their reduction of financial pressure because they have a very strong dependency on foreign capital. “In Portugal there is a preference for debt on capital and when you don't get into debt with the Bank into debt with shareholders”, stressed the Governor. With this “great risk aversion and tax mechanisms bias in favor of the indebtedness” which is “bad for the banking system, for the company and for the entrepreneur commitment regarding its company”, improving companies financial capacity is essential. How? With conversion of debt in capital or almost capital, strengthening own capital and increased self-financing. “We need to find a solution to viable businesses that are under financial stress. We must be aware that Portuguese Companies, to meet the challenge of sustainable, must invest.
Family Businesses:
In a recent study dedicated to Family Businesses, by the international consultancy KPMG, a leading business consultancy, shows that 60% of Family Businesses struggle to find external financing to Finance their Investments! Adding that while Family Businesses, creating more than 70% of global GDP, many have said they find in their traditional financing options, limited resources.
Commitment to Punctuality Payments:
Soon we will celebrate a year since ACEGE publicly presented its position "Pay on time, to Grow Portugal". Does the new law on
Late Payments came to discipline the bad practice, whose "main" bad examples are coming from the State, Local Municipalities and Public Entities? Who endorsed ACEGE Commitment to Punctuality Payments continue to finance, as well its shareholders, the Portuguese Economy. "I know what I'm talking about" and "corporate egoism is a culture rooted in Portugal, which is deeply harmful for the economy and our future," assured António Pinto Leite, President of ACEGE. The absence of National Culture (Entrepreneurial and Pubic) for "Payment on Agreed Time to Suppliers" constitutes a real bottleneck for the development of Enterprises and the Economy.
Financial Sustainability:
We report institutions of greater national and international representation, pointing all to the problem of SME's access to Credit and Financing capacity, for their "normal governance" and the fundamental framework for "its investments", in particular as a lever for growth of our economy, improvement of our exports and as employment facilitator.
It's time to focus on real solutions to SME´s with economic viability living in "financial stress", accompanied by discipline in the subject of late payments, with State giving the real Example, on a whole new dimension of positive attack the Portuguese Economy pro Healthy Companies with Financial Sustainability, with an Efficient and Unbureaucratic State in times of positive breeze by "Excellency Examples” given by "Private Sector Exports", thus decisively contributing to the decrease of Unemployment and Poverty eradication!
ACEGE-Núcleo do Porto David Zamith www.acege.pt www.ver.pt
VE - Nº 1558 - 03 Oct 2014
