Results of financing solutions for small businesses within the framework of Ansej agency
Through
our study and analysis of the subject of microfinance financing in Algeria, a
study on the effectiveness of the role of the National Agency for Youth
Employment Support, with a field study on a sample of small businesses of
microfinance funded under the National Youth Employment Support Agency, and on
the basis of which we conclude with a number of:
1-
Results
2-
Recommendations
3-
Solutions
And
then answer the problematic question.
1 / The results of the small businesses financing study within the framework of L’Ansej agency :
The
first hypothesis has been proven, which is represented in the presence of many
and diverse problems and difficulties encountered by small businesses that
prevent their success, and the problem of finance appears as one of the most
important obstacles that hinder development small businesses, despite the
policies and sources of financing available, the problem of financing small
businesses remains among the constraints of financing small businesses
Financing needs;
Where
we found that small businesses, even if they need small capital and
insignificant financial capacity, have a great need to access sources of
finance and to obtain appropriate financing in terms of type, size and time
during their life cycle, as are large businesses.
Commercial
banks, especially conservative banks, do not tend to finance small or new businesses
because, in their view, they are more risky and lack experience among their
owners, and the difficulty of preparing a study of feasibility ... etc., and biased
in granting loans to large-businesses compared to small businesses for many
reasons Among them, the low cost of the loan process, the availability of
information and financial statements on the large businesses, and the
availability of sufficient assets to secure loans, and in cases where loans are
made to smaller businesses, they often require collateral that is unsuitable
for these small businesses despite the existence of many methods of funding
adapted to their privacy. These small businesses;
The
financing problem is reflected in the behavior of microfinance businesses in
its economic environment, since many of them in their transactions are forced
to borrow on the informal market for financing, with the consequent increase in
the rate of interest and an increase in financing costs, which increases the
chances of microfinance failure and reduces the rate of profitability of the
activity compared to the equivalent that these small businesses would have
earned if they had the appropriate financial resources;
As
for the second hypothesis, which is to consider that despite the role assigned
to the National Agency for the support of youth employment, there is a manifest
insufficiency in the effectiveness of the role of the agency in the funding of small
businesses .
The
National Agency for Support and Employment of Youth as an application of a
local funding policy for small businesses in Algeria We have proven this
hypothesis because we have achieved the following results:
As
part of the expansion of the fabric of microcredit small businesses in Algeria,
a group of agencies supporting the creation of these small businesses was
created. This is the microcredit device and the support device for the creation
of activities by the unemployed between (35) and (50) years old, created in
December 2003, And the National Agency for Support to youth employment, which
began operating in mid-1997, and banks were encouraged to support these schemes
by creating funds to guarantee loans, and all of these measures to deal with
the side effects of the program economic reform and structural adjustment by
helping low-income homeowners to create new job opportunities And developing
the queens of the world Free boredom for young people willing to invest;
The
agency of the National Agency for Support to Youth Employment draws attention
because of its experience and the novelty of other agencies on the one hand and
its availability for most of these institutions , and for having targeted the
most important category in Algeria (the category of young people) on the other
hand, while it is trying to set up a special device responsible for mobilizing
resources and efforts for Development and microenterprise goals
To
support, finance, set up small businesses and expand the list, in particular
for boost people's incomes and provide employment opportunities that help solve
the unemployment problem, and the National Agency for Youth Employment Support
achieves its goals by providing an integrated package of services, facilities
and benefits through 53 branches in 48 states in addition to working to
consolidate Spread the values of self-employment for young people;
With
regard to the last hypothesis, which is that the problem of funding in small
businesseshas also contributed to it by those who have funding needs on the one
hand, and funding small businesses on the other hand, the variation in funding
ratios at the geographic level and the large difference between the number of
funding requests and the number of businesses funded at the branch level, due
Mainly due to the funding decisions of banks and the degree of their
representation at local level,
And
on the other hand to the interests of the agency. Its failure to carry out
feasibility studies for the proposed projects has led to the acceptance of
almost all the projects which meet the administrative conditions and neglect
the economic side of them, which has doubled the number of requests for funding
submitted, in addition to the responsibility of the project owners themselves
(those seeking funding) not to suggest new project ideas in most cases. Where
it depends on the tradition of the projects implemented.
Small
businesses in Algeria suffer from the financing problem, like other businesses
in the private sector, from the difficulties created by the financial system in
Algeria, such as the bureaucratic management of public banks, the centralization
of lending decisions, the absence of specialized funding organizations ... etc.
2 / The recommendations of the small businesses financing study in the context of L’Ansej:
In
order to give more benefits to our research and based on the above results,
some of the recommendations that we believe should be made in the future can be
summarized on two levels:
2-1 / At the general level affecting funding:
The
growth and development of small businesses requires the establishment of a
healthy and healthy climate, from the pre-transition phase to the exploitation
and expansion phase, by creating an economic environment which encourages young
people For me, initiating the establishment of such small businesses and this
economic environment must meet a set of conditions, the most important of which
is the elimination of corruption which leads to renouncing the principle of
equal opportunities and thus brings about young people to fear and to refrain
from investing in small businesses, and to fight against the methods of
mediation and favoritism which are now a condition of access of young people On
loans.
Conduct
a full survey of mini-institutions in terms of their quality and the products
that produce them and the actual production capacity, the quality of the raw
materials used, etc. Its concentration in northern cities as the study shows.
Eliminate
legislative and administrative obstacles and find an appropriate legal
framework for their work, whether related to the launch of the activity of
these small businesses in terms of multiplicity of approvals and registration,
obtaining licenses or after start-up activity, particularly in the areas of
marketing.
The
need to set up a specialized financial businesses or a specialized bank to
finance small businesses similar to certain countries, and to work to extend
the establishment of guarantee organizations for loans granted to small
businesses, in particular operating loans , and to support the marketing
capacity and development of these small businesses, by creating a specialized
information center, responsible for collecting Updating databases on small
businesses which contribute to the commercial process and stimulate exports;
Provide
information on how to take advantage of the exceptions and exemptions contained
in international and regional agreements; and fight against the dumping of the
local market with imported products which compete with the products of small
businesses while reducing costs, customs duties on imports of these small businesses
from raw materials and simplifying export procedures and import and attention
to quality.
The
determination of a certain number of components must be found in young people
who wish to create small businesses, which will ensure their survival and their
development such as personal traits and characteristics such as seriousness,
responsibility, creativity, creativity, communication, leadership personality,
management skills and technical expertise in the field of his choice, These
elements can be provided by working on two axes, one of which in the long term
, by developing an educational system guaranteeing the technical and
administrative qualification of young people during the educational stages, and
the other in the short term through targeted media programs, by preparing
training and administrative rehabilitation programs in order to provide them
with various data. , providing referral channels and providing administrative
and accounting services for young people.
2-2 / At the level of the National Youth Employment Support Agency (ANSEJ):
2-2-1 / In the area of technical and economic study of the project, to finance small businesses within the framework of L’Ansej:
Precision
and realism must be taken into account when preparing feasibility studies for
projects proposed by young people invested, at agency level, and this can be
achieved by providing experts specializing in feasibility studies in branches
of the agency, where they study investment opportunities that can be exploited
locally and guide young people towards more effective projects;
Take
advantage of universities and university research laboratories to undertake
feasibility studies on the investment opportunities to be exploited; the need
for coordination between the interests of the agency and the bank in studying
projects to avoid duplication and save time, and to save the agency from
qualifying projects that the bank does not finance for economic or organizational
reasons.
In
the area of financing, simplify the procedures for obtaining the loan by
reviewing the current procedures for obtaining the loan and eliminating
unnecessary ones;
Examine
the required documents and exclude unnecessary ones;
Create
a liaison office at the agency's headquarters to deal with problems related to
loan granting procedures and liaise with the authorities concerned to
facilitate them;
Activate
a mechanism to accompany young entrepreneurs to banks in order to facilitate
the reception process, bring together points of view and reduce the obstacles
and negative behaviors they may face before submitting their files to the bank;
Review
the current conditions for granting loans in light of the problems encountered
by the owners of small businesses and work to modify these conditions to
facilitate the beneficiaries.,
This
must be taken into account when determining the period for deferring the type
of activity and the timetable for obtaining income; not ask for additional
guarantees outside the agreement which brings together the agency, the banks
and the loan guarantee fund;
Allow
room to negotiate loan terms and avoid adopting some form of bank approval.
Determine
the loan amount in proportion to the size of the project and the type of
activity and work to reschedule the payments of the defaulting beneficiaries
after examining their situation and their financial capacities;
Reduce
the young person's personal contribution to the project or rely on the leasing
formula to finance projects that generally do not require advances;
Diversification
of approved funding methods, in particular Islamic funding formulas, since the
organization aims to reach large groups of society, it is therefore necessary
to take into account that the funding method corresponds to the dominant values
in the local community;
