FITD analysis: domestic companies ready for investments to exit the coronavirus crisis

In the period from July 24 to August 19, FITD conducted a questionnaire-survey, which was answered by 256 domestic companies. Most of these companies are micro 57% (145) and small 31% (79), however 10% (26) medium and 2% (6) large enterprises also contributed. They conducted an evaluation in several categories related to the amount of financial support, investment risk assessments, application process, technical assistance, availability and criteria

The analysis of the survey conducted by FITD following the first cycle of the instrument for financial support for technological development, intended to overcome the consequences of KOVID19, gave the following indicators:

1. Domestic companies are ready to start investing during the ongoing crisis, since such an adjustment is necessary for economic recovery and further functioning. Over 50% of companies believe the time is right for investment, while only 13% believe that it is still too early to enter a new investment cycle.

2. In terms of the amount of financial support, 40% of the total number of companies said that it is sufficient for investments in the recovery phase, which is especially pronounced in medium-sized (73%) and small enterprises (68%), as well as that the percentage of co –financing is appropriate 58%. On the other hand, 29% think that it should be increased. Following the current conditions, with this instrument the financial support is structured according to the size of the company, up to 750,000 thousand denars for micro, 1.5 million denars for small and up to 3 million denars for medium-sized companies and cannot exceed 70% of the total budget of the investment. The remaining 30% are funds provided by the companies themselves.

3. The survey showed an interesting fact, that 74% of the companies that participated in the survey do not use any other type of state support, and only 26% use mainly subsidies for minimum wage, 69%, 16% use interest-free loans, and only 9% or 5 companies are beneficiaries of FITD funds.

4. A large proportion of respondents, i.e. 44% think that the application process is clear and simple, while only 8% have encountered substantial problems in filling out the form. 40% of the companies find the evaluation criteria to be appropriate, while 25% think the criteria favored certain industries. Among other things, they offer a wider range of funded activities as well as a focus on companies whose projects have positive effect on the environment. 16% of respondents do not believe in the objectivity of allocating support.

5. Companies have expressed different views regarding the newly introduced mechanism for return of funds: 19% think that this mechanism is good, but the percentage of return should be reduced, while the majority of 29% believe that the basis for return should be calculated from the revenues generated by project and not calculated on the basis of revenues generated at the level of enterprise. As a reminder, with this mechanism the funds are allocated with a return of 15% of the gross profit realized in the first three years after the completion of the project.
As a reminder, with this mechanism the funds are allocated with a return of 15% of the gross profit realized in the first three years after the completion of the project

The companies through the questionnaire were able to share ideas and proposals, and the most important was the proposal for process improvement, some companies suggested that FITD should provide the required documentation from state institutions as well as online training and application tutorials.

The results of this analysis and the recommendations of the domestic companies are an opportunity for their direct contribution in creating the conditions for the second cycle that the Fund plans to implement immediately after the current one ends. They will be included in the economic recovery support instrument, which is currently being adapted.

For implementation of the second and next cycles of public calls for economic recovery, the Fund initiates additional funds from the Government, apart from the already provided 200 million denars, most of which will be used in the first cycle.

The economic recovery program is part of the third set of economic measures of the Government of North Macedonia and is intended to support micro, small and medium-sized companies with potential for successful operation.