Financial risks of microenterprises

Abstract

Since the second half of the 19th century, the main drivers of the global economic development were the big enterprises and corporations due to their rapid growth and wide range of opportunities and potential. After a long time, it had been proven that micro-, small- and medium-sized enterprises or SMEs are indispensable participants of the modern market economy due to their flexibility and dynamic growth rate. My research and work is dealing with – the smallest participants of the SMEs – the microenterprises. Their importance is coming from their characteristics and from several other factors, among which perhaps the most valuable is their job creation capability. As in case of any business organization, microenterprises always have to face the various types and forms of risk. The main reasons for this process are the rapid changes in the economic environment and the increasing market competition and globalization. In my secondary research, I examined various financial risks arising during the operation of domestic microenterprises. In addition, – in the framework of my primary research – I

made individual in-depth interviews with consultants, experts and leaders of micro- business segments of several Hungarian commercial banks about the supply side of the domestic money market. I consider as an important part of my research work, to formulate helpful suggestions and to explore and describe foreign and domestic good practices. By bringing these recommendations and advices back into practice, I try to help the microenterprises to find the potential ways for reducing financial risks and the favorable directions of development.