ACCESS TO FINANCE AS A BARRIER TO INNOVATION - EVIDENCE FROM THE SME SECTOR IN BOSNIA AND HERZEGOVINA

Abstract

This paper examines key barriers that SMEs in Bosnia and Herzegovina face when accessing external financing for innovation. Using quantitative research based on primary data collected through a structured questionnaire, the paper analyses company perceptions regarding support from commercial banks, microcredit institutions, and public funds. The findings identify major obstacles, including unfavourable financing conditions, administrative complexity, and limited access to information. Statistical analysis was used to test hypotheses concerning firm size, sector, region, and institutional factors. The results indicate that company size, regional context, and administrative barriers significantly influence access to finance, while the link between innovation and external financing is not statistically significant. Smaller companies face notably more obstacles than larger ones, particularly regarding public support mechanisms. The paper highlights systemic challenges that hinder innovation in the private sector and offers policy-relevant insights. It calls for more inclusive, targeted financial instruments to support innovation-driven growth among smaller companies.