Portugal has “too many” small and medium-sized enterprises (SMEs), many of them micro-enterprises, and this constitutes an obstacle to productivity, turnover, profits and job creation and, on an ongoing basis, to the affirmation of the Portuguese economy in the global market. It is one of the possible summaries of the debate organized by Diário de Notícias (DN) and the consultancy PwC, which took place this Wednesday, in Lisbon.
“Too many SMEs”, a somewhat jarring term, given that we are talking about more than 90% of companies in Portugal, was used by the Secretary of State for the Budget, who closed the M&A – Consolidate to Grow conference.
Before José Maria Brandão de Brito, who is deputy to the Minister of Finance, Banco Português de Fomento (BPF), in the voice of its executive president, Gonçalo Regalado, explained that the idea is not to discriminate against companies based on size and offered a solution: a bazooka of 30 billion euros in injection of funds into the business fabric parked in Portugal to give global muscle to companies that convince investors.
As? Using various forms of financing, most of them public guarantees to access credit, obtain European funds, attract investment and venture capital funds, bringing them as partners for this national effort, defended Gonçalo Regalado, the main speaker, at the opening of the conference that took place in Lisbon before an audience of top managers and financiers.
It’s a trap
But let’s start at the end. For Brandão de Brito, the head of Finance, the Portuguese economy has “a business fabric made up of too many small and medium-sized companies”, which suffer from a lack of capital, difficulty in attracting talent and accessing “less expensive” credit, companies that “cannot exploit their full potential. The Portuguese economy is trapped in an “SME trap”, from the English “SME trap”.
The Secretary of State indicated that “we have a way to go in terms of productivity because we are around 20% below the European average, and in the last 15 years labor productivity in Portugal has grown by less than 10%”, compared to more than 30% in the remaining cohesion countries, those that are at the forefront of receiving European funds.
And then he said: “part of the explanation (for the aforementioned problem) will lie in the fragmentation of our business fabric, in which micro, small and medium-sized companies employ more than 75% of the workforce, compared to less than 60% in the Netherlands, Luxembourg or Ireland. “We know that larger companies benefit from economies of scale” and “have an easier time attracting talent and access to less expensive financing.”
Furthermore: large companies “pay better – and we are not just talking about higher salaries, we are also talking about more developed career structures and less job insecurity”, he argued.
For the member of Luís Montenegro’s government “it is medium and large companies that invest most in innovation, digitalization and intangible assets, with knock-on effects on the rest of the economy”.
Therefore, it is necessary to “make Portuguese companies grow”, get them to export more and better, and for the government to eliminate “obstacles”.
“A business fabric made up of too many SMEs that cannot exploit their full potential is an SME trap situation. This is the case in Portugal”, warned Brandão de Brito.
BPF proposes bazooka and a type of sovereign wealth fund
The answer to the problems highlighted by the government is more financing via Banco Português de Fomento. Over the next three years (2026 to 2028) – through guarantees, effective capital, mobilization of investment funds and support for the use of non-refundable European funds (grants) – the public institution expects an increase of around 30 billion euros in the source of fresh money, revealed Gonçalo Regalado, from BPF.
The CEO showed that his bank has exploded in its ability to mobilize funds for the business economy. In 2025, the impact amounted to “six billion euros”, eleven times more than in 2024, making the Portuguese development bank the fifth strongest in Europe in these numbers when seen in proportion to the size of the economy (GDP).
The BPF is already involved in financing large structuring projects for the country, such as the large hospital in Lisbon, the TGV, the mega data centers that will nurture artificial intelligence projects, but it promised more.
He says he is working on building a mega-investment fund for Portugal “that functions like a sovereign wealth fund”, “a fund of funds”, “open to new participation” and “in a perpetual logic”, revealed Tereza Fiúza, executive president for the investment area (CIO) at BPF.
It is necessary for Portuguese companies to take the lead, to grow from small to global, “this is what happens in countries like Ireland and Israel”, he exemplified.
