Financing SMEs in Vlora City, Albania: between Game Theory and Lack of Information

AbstractThe SMEs (small and medium-sized enterprises) play a crucial economical role, especially in transition economies. However, the financing problem affects the SMEs’ development. Information asymmetry between banks and enterprises is the main reason for the SMEs’ gaining funds so hard; the banks do not know the operating conditions and credit situation of SMEs. The study focuses on the analyses of the game of (in) complete information and financing growth strategies of SMEs in the city of Vlora to face with challenges of a sustainable development and a competitive market

The Role of Business in Local Economic Development

Small business is backbone of national economy. The base of economic system is free enterprise. Small business is attractive because of a greater independence and better financial income. Small business development is essential element for economic development of a country. One of the most important duties of government is to create a suitable economic and politic environment, which allows the creation and development of small businesses. The tax system is very important for local government. The new fiscal packet offered to the local government a substantial fiscal autonomy, allowing the growth of local budget. Following the collapse of the centralized economy system in Albania, also opened the way for business development. Business in Albania was supported by many Western foreign loans. Because of the existing structure in place and financial opportunities to people was conducted mainly small businesses. Later in a long time, with the development of economy and business was conducted moving from small businesses in those medium and large ones. Revenues from taxes and fees make up the bulk of their source of income including taxes and small business. Increased decentralization is very important for current conditions and development of Albania and alleviates some problems bad enough to knock as government and not good management of income