eu - 28 trade credit leasing or hirepurchase 4 % 3 % 2 % 2 % 0 % debt securities region equity capital eu - 28 factoring region source : survey on the access to finance of enterprises ( safe ), ec and ecb. second, for those companies that external finance seems to be important caveat, the main causes are related to the inadequate collateral, high costs and complex procedures. both notions bring to the fore the need to discuss the state of play and the potential for financing with alternative instruments through capital markets. chart 12 : the most important limiting factors for external financing ( average 2015 - 2017, % of the total number of surveyed companies ) region insufficient collateral or guarantee baltics interest rates or price too high reduced control over the enterprise cee financing not available at all see too much paperwork is involved there are no obstacles eu28 0. 0 % 20. 0 % 40. 0 % 60. 0 % 80. 0 % 100. 0 % source : survey on the access to finance of enterprises ( safe ), ec and ecb. 4. capital markets in cesee – potential source for finance although greatly used, the traditional sources of finance, such as government financing for infrastructure, or financing through domestic banks of smes might be either limited in size, or constrained by some structural impediments. hence, these sources might not be sufficient to close financing gaps. in this context, capital markets can have significant role for bridging the existing gaps. benefits of developed capital markets are well known. they could complement banks as a source of financing and could : 1 ) unlock more investment for all companies, especially smes and for infrastructure projects, 2 ) attract more investment to the region through external financing, and 3 ) make the financial system more stable and resilient by opening up a wide range of funding sources 8. thus, capital markets have potential to foster growth. despite the continuous progress, capital markets in the cesee region still lag behind the more advanced eu countries. in most of the countries in the region, the financial system is bankbased. capital markets in cesee countries have expanded significantly, since they were originally created9. despite the growth from the low base, and given the impact of the global crisis on the market growth momentum, the capital market depth ( listed shares and bonds ) in the region is hovering around 50 % of gdp, far below the eu average for 2008 - 2016 of around 200 % of gdp. similar is the

s debt to the companies being over euro 220 million. in such circumstances, banks have reduced lending to firms to a minimum and they struggle with the growth of bad loans. can we expect the situation to improve? in the statistics that are known to me i have not found such figures. however, when economic growth and exports slow down and budgetary payments are late, usually the liquidity of companies deteriorates. therefore they are late in the settlement of obligations to the banks. despite that, non - performing loans of the macedonian banks amount to about 10 percent, which is the lowest share in the region from slovenia to greece. announced debt repayments from the budget will contribute to the reduction of the debts among companies, and finally debts toward the banks. so it is logical to expect stabilization, and perhaps reduction of the level of banks ’ bad loans. banks which have huge excess liquidity, have reservations regarding lending to companies, and they locate the reason in the emphasized risks. is the placement of those funds in treasury bills and central bank bills a solution, even at the cost of a decline in the economy? the monetary policy is trying to trigger a certain behavior of the banks which it considers is appropriate at a particular time. but banks independently manage excess liquidity and it is their decision whether more will be placed in the form of loans or in risk - free securities. at the beginning of the second quarter, with several measures we released substantial excess liquidity placed in cb bills over the level that we considered it was necessary to be maintained. it is a fact that banks placed only a small part of that surplus in loans. one of the reasons is certainly the perception of banks for increased risks in the domestic and global economy. but just as important, if not even more important reason are the corporate strategies of the banking groups in the euro area that are owners of the macedonian banks. some of these banking groups have serious problems in their home countries. although their banks in macedonia have excellent capitalization and record liquidity, they must implement the strategy of their foreign parent banks, which due to the insufficient capital, refrain from lending in all countries where they are present. nbrm cannot require those banks to increase lending, but we undertake everything we can to prevent a reduction in their loan bis central bankers ’ speeches portfolios. obviously, this is another area where we have a spillover of the negative developments in the euro area into our economy. what will be the credit growth this year, and what