Attitudes of Agricultural Enterprises toward bank financing in Bulgaria

Milen Vlaev ()
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Milen Vlaev: University of Economics-Varna, Bulgaria

Business & Management Compass, 2025, issue 4, 60-75

Abstract: Agricultural enterprises operate within production cycles that are influenced by high seasonality, climatic risks, and market price fluctuations. The continuity of production processes depends on consistent access to capital resources to maintain liquidity and solvency, as well as to support investment and competitiveness. The role of bank financing is increasing and is key for agricultural enterprises. Thisarticle examines the attitudes of agricultural holdings towards bank financing, their preferred sources of capital, and identifies key barriers and drivers for access to credit. The analysis is based on a survey conducted among managers of agricultural holdings operating in the sectors of grain production, vegetable production, horticulture, and livestock farming. Frequency analyses, cross-tabulations by sector, turnover, and managerial experience, as well as the Net Promoter Score (NPS) for perceived "cost" of bank financing, were employed. The analysis identified several key findings: equity remains the preferred source for working capital financing: the use of bank credit increases with the scale of the farm, accounting for 59% of financing in farms withturnover exceeding BGN 200 000, compared to 34% in farms with turnover below BGN 200 000. Trade financing is used by 34% of respondents, mainly by more experienced farmers. Bank credit remains the preferred source of funds for investment, with leasing of long-term assets ranking second. The results indicate that the perceived cost of bank financing is negative, with an NPS of –61. The study provides valuable insights for adapting banking products to seasonality and risk, for formulating clearer pricing policies, and for simplifying procedures and the design of guarantee schemes, leasing solutions, and insurance instruments. The survey offers a solid foundation for potential future panel tracking of attitudes, evaluation of the effects of guarantees and subsidies on credit access, assessment of digitalization impact, and causal analysis between financing structure, productivity, and sustainability.

Keywords: Agribusiness financing; bank financing; access to capital; credit attitudes; agricultural holdings (search for similar items in EconPapers)
JEL-codes: Q12 (search for similar items in EconPapers)
Date: 2025
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