Small and medium enterprises (SMEs) constitute the backbone of Romania’s private sector, accounting for over 99% of all companies and over 50% of value-added. However—local SMEs encounter difficulties in areas such as access to affordable financing options, complex regulatory compliance, shortage of skilled workforce and technology adoption.
Banks traditionally have been risk-averse in lending to SMEs due to incomplete credit histories and lack of collateral. High interest rates and stringent collateral requirements imposed further challenges. The government has now established credit guarantee schemes and financing programs through institutions like EximBank to help SMEs obtain loans on favorable terms.
The government in Romania still plays an oversized role in the economy, which can lead to challenges in terms of independence and efficiency of the business environment. State-owned enterprises shape many industries, impacting competition and market access. Infrastructure and Economic Environment: Romania’s poor infrastructure, including underdeveloped transportation connections, can negatively impact business costs, productivity, and the country’s ability to attract foreign investment. Additionally, frequent legislative changes without prior private sector consultations create uncertainty for businesses
To help address this challenge in Romania, the government has established credit guarantee schemes and financing programs through institutions like EximBank that assist SMEs in obtaining loans on favorable terms. For example—over 30,000 SME loans amounting to $3 billion have been facilitated since 2010.
Despite these barriers— opportunities exist for Romanian SMEs in thriving industries such as IT services, light manufacturing, agriculture and food processing as well as tourism and hospitality. The government is undertaking initiatives to promote entrepreneurship through training, mentoring and regulatory reforms. Special economic zones also provide incentives for local startups and investors.
While small businesses in Romania face challenges related to government influence, infrastructure, labor shortage, and regulatory environment, there are also opportunities arising from economic growth, government support, and the e-commerce market. By navigating these challenges and leveraging the available opportunities, small businesses can contribute to sustainable economic growth and development in Romania.
