FINANCING SMALL AND MEDIUM-SIZED ENTERPRISES AND ENHANCING QUALITY: PRIVATE EQUITY INSIGHTS

Abstract

Small and medium-sized enterprises (SMEs) play a crucial role in economic growth, innovation, and development of countries. Private equity is an important, but often overlooked, alternative source for financing SMEs, particularly in emerging markets. Private equity funds aim to increase the value of their investees through internal processes and procedures. The essential element of this value creation work is the enhancement of quality. The scope of the study is to present private equity operational value creation activities and processes that lead to the enhancement of quality in SMEs. The study is based on the data from SEAF Serbia Impact Fund, a private equity fund, which, during the 2014 to 2018 period, analyzed 571 companies in Serbia. The results imply that private equity funds play an important role in financing SMEs, enhancing quality, and improving company performance.

Keywords

• private equity
• smes
• quality
• emerging markets