I have seen too many times how the Romanian affairs, built with work and determination, arrive in a deadlock due to the lack of resources to move to the next level. The small and medium -sized enterprises (SME) in Romania represent the spine of the local economy, supporting communities, generating jobs and reinvesting in infrastructure and social well -being. But here the paradox appears: although small and medium producers are recognized as the engine of these economic development, Most of the time local businesses, they remain underfinite and underdeveloped. Government and European financing are largely concerned, the start-ups, of which more than half fails in the first three years. At the same time, the business that survived the initial challenges and are ready to grow are facing the lack of appropriate funding. Too big for grants, too small for institutional investors or for stock exchange, these companies are caught in a vicious circle.
SMEs blocks: from access to financing, to market visibilityReality shows us a painting that discourages growth. Romania is below the EU average regarding the access of SMEs to financing, and the BNR polls show that below 20% of the SMEs in Romania have benefited from bank loans. At the same time, if we look strictly at agro-food producers, supermarkets, which control over 60% of food sales, impose strict volume, quality and continuity requirements, and the lack of technology, the development of adequate production capacities or marketing knowledge It makes many local products invisible to consumers. These business needs financing, but not only! They need real, structured and coordinated support, to move from scaling survival. How could we support this leap for the average agro-food companies in Romania? A possible answer, an idea that could correlate all these needs would be a Regional investment, to break this vicious circle.We can start from ideas with proven resultsWe must not reinvent the wheel. Looking at other European countries, we observe similar initiatives that have been considerable. In France, Paris Region Venture Fund has contributed to the promotion of Paris and its suburbs – to ensure the growth of local companies and to attract new direct investments. The fund reported in 2022 the creation of over 10,000 new jobs and the development of over 430 projects. Regional projects around local products and traditions as it was called Tuscan bread Din Italy He brought together local wheat producers and traditional bakeries, creating a distinct regional brand. The standardization of quality and the promotion of local traditions have increased income and better visibility in international markets. A similar program, also Italian, dedicated to dairy production has managed to bring the Emilia Romana region an increase in exports by 20% around a regional mozzarela brand. Similarly, the project «»Pain Poilâne«France has shown how the use of local cereals and traditional bakery methods can create a strong regional brand. This brand has become synonymous with quality and tradition, attracting both local and international consumers, and contributing to the economic development of the region. Successful stories including on the local market. of quality. We build a solid economy, we must allocate the resources where the impact is real: to the small and medium-sized local producers that have exceeded the start-up stage and are prepared for expansion. It is no longer about theory but of immediately achievable solutions.And Regional investment: applied to the local specificity, ensuring counseling, strategy and financing At the moment I think that Romania has the resources necessary for the implementation of a large strategic project, with national impact. We have a know-how, expertise and we can direct financial resources for the implementation of a mechanism that increases the local economy, creating added value through the consumption of local raw materials, the development of local production and regional brands. We can start this national program by supporting local producers Small and medium in the agro-food industry, by setting up a regional investment fund that act in two directions: invest in a fixed periodboth in the shareholding of local producers and in setting up and developing a specialized entitya «marketing and sale company», to help them in covering the marketing and selling needs of at least one third of the production under a strong regional brand. For the rest of the production, the manufacturer will be directly interested in developing its own brands.Such a fund would not only provide capital, but also the know-how to help medium-level local producers improve their corporate governance practices, management structure, financial transparency and operational efficiency. The model could work as follows:Directed investments: The fund would support the local producers with potential, offering them not only capital, but also strategic support. The development of sustainable business practices and correlation on the production chain, from raw material to added value products, could prepare companies for even more investments and attracting new funders.Creating a strong regional brand: A specialized entity could outline the regional specificity – the differentiator of each region, would negotiate with retailers and promote local products under a unified brand, while guaranteeing the quality and stability on the market.Reinvestment of profits: Such a fund would have the chance of efficiency at least similar to other investment funds, and the resources would be reinvested to support other local businesses.Who should manage such a fund?In my opinion, regional development agencies (ADR) would be the ideal partners for such a project. With a proven experience in managing European funds, ADRs can implement such a fund with clear mechanisms of transparency and efficiency, hiring privately experienced managers. At the same time, the county councils will have an interest in supporting the regional brand for income generation and increasing the region's image. A unified brand strengthens the commercial power of local affairs, replacing multiple small brands and creating a stronger and more coherent identity on the market. These benefits contribute to increasing competitiveness and attracting a base of loyal customers, nationally and, why not, even outside the country. Of course, there are funds, including non-reimbursable grants, granted to support territorial development in various forms, but little focus on the support of small and medium agro-food producers to move to the next development stage by increasing the competitiveness to ensure the sustainability of the business. . Precisely, through this project, ADR will not grant grants but will make investments that will generate yields, ensuring the continuity of the program.Romania has potential – how do we turn it into results?Instead, we only pride ourselves with the formidable potential and secular tradition, I think we have to find those strategic levers that transform the possibility of being successful, into a real success. The small and medium-sized local producers who have passed the start-up stage need real capital and support to scalify business ideas that already have a traction. A regional investment fund is a viable and tested solution, which could transform the local economy and would provide Romanian producers with a real chance to develop. I think it is time to overcome the rhetoric «we have potential» and to build a system in which the producers Local not only survive, but also prosper. With a clear strategy and effective implementation, this fund could be the key to a stronger and more sustainable regional economy. What do you think? Could this be a feasible solution for supporting SMEs in the agro-food sector? by Jabbar Kanani, entrepreneur
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