New Ways to Finance Micro and Small Enterprises in Agriculture

Introduction

The study presents the results of the research on alternative ways of financing micro and small agricultural enterprises in the Czech Republic. The main objective of the research is to broaden the knowledge base on alternative ways of financing micro and small agricultural enterprises in the economic, social, and environmental conditions of the 21st century. To achieve the main objective, four partial objectives have been defined.

• 1.

  To identify and evaluate both traditional and new alternative ways of financing micro and small enterprises in the agricultural sector.

• 2.

  To assess the positives and negatives of individual forms of financing.

• 3.

  To identify, evaluate, and discuss the prevailing types of financing micro and small enterprises in the agricultural sector in the Czech Republic.

• 4.

  To recommend new ways of financing micro and small enterprises in the agricultural sector.

Qualitative research methods were mainly used for the research. The first step was to analyze and evaluate secondary professional, legislative, and statistical sources in order to define the field of research and to present the theoretical background. The aim was also to understand the context of the issue and its connections in wider circumstances. Interpretative and comparative methods were used in the following step. The empirical part of the research was carried out through guided interviews with the owners of selected micro and small agricultural enterprises in the Czech Republic. Personal interviews were chosen due to the fact that financing is a sensitive topic for entrepreneurs. Furthermore, the authors felt that they were more likely to obtain the information they needed through personal interviews than other “impersonal” methods of data collection. The selected sample of enterprises is engaged in agricultural primary production and/or other related activities, such as food production and sales, restaurant activities, providing accommodation, and others. Secondary activities were not the reason for excluding an enterprise from the sample of enterprises. An active business activity was a prerequisite, i.e., both enterprises with a long tradition and those that have been engaged in agricultural activities for a shorter period (the minimum period of business activity was 1 year) participated in the guided interviews. In March 2022, potential respondents were identified and contacted, and more than 100 business entities were approached during that period. The guided interviews themselves took place from April to mid-May 2022, with some interviews being conducted in face-to-face meetings and other interviews being conducted over the telephone or online due to the lingering Covid-19 pandemic. A total of 15 guided interviews were conducted and evaluated, which were then used as the basis for developing case studies that characterized different approaches of micro and small enterprises to their financing.