Rural tourism development and financing in Romania: a supply-side analysis.

For more than a century, and almost everywhere in the world, rural areas suff ered a steady decline, due to the dec- rease of the real income from the agricultural activities, the lack of serious economic alternatives, and demographic issues. Rural tourism could contribute to the rural sustainable development through small local businesses valorising the natural, cultural and ethnographic resources. However, most of them need the fi nancial support from private creditors (banks). Th e survey-based research conducted among banks' representatives has identifi ed several strengths of small rural ventures, such as the small scale and the associated risks, the endurance to external shocks, the openness to market opportunities, as well as some of their weaknesses: e.g. a poor management experience, seasonality etc. We have also identifi ed the actions nece- ssary to be performed by these fi rms to attract fi nancial resources from the banks' side, i.e. the diversifi cation of income sources, the association and the adherence to recognized brands and maintaining a reasonable leverage ratio. It was found that the bank's size does not matter, but the nature of the bank's capital does: the private domestic banks are more willing to fi nance such businesses. Th e banks' involvement in co-fi nancing the EU projects could be a way to foster and strengthen the rural businesses.