In a move to help save local businesses, recession-hit Portugal is waving the carrot to get companies to float shares on the stock market in order to fill their near-empty coffers.
Since Portugal was granted its 78 billion euro ($101 billion) bailout in May 2011, bank lending to small- and medium-sized enterprises has dried up, as it has in other struggling eurozone countries.
But memories of the mass nationalisations four decades ago following the end of authoritarian rule still linger and Portuguese entrepreneurs are reluctant to open their books to attract capital, a requirement when listing shares on the stock market.
The government is now working on a plan it hopes will help change their minds: offering tax deductions to list their shares.
"It's essential... to improve and diversify the financing of our companies," Economy Minister Alvaro Santos Pereira said recently, adding the government is also trying to help companies slash soaring debt.
The European Central Bank earlier this year signalled that it would look into how to directly boost lending to SMEs, considering it a key obstacle to economic recovery, although it has recently backed off taking any bold initiative.
But the Portuguese government is pushing forward.
Hoping to set an example for others, the government has vowed to privatise some of its own assets, a bailout condition imposed by the EU and IMF, via the stock exchange.
"It's important that some of the privatisations also go -- partially or totally -- through the secondary market to help these markets develop," the minister said.
In the next few months, the government is set to privatise the insurance arm of state-owned bank group Caixa Geral de Depositos, air carrier TAP as well as the Portuguese postal service.
Although a trading platform has been in place since Euronext launched the Alternext market in 2005, only two Portuguese SMEs have so far ventured onto the exchange, which was purposefully designed to entice smaller companies.
Coimbra-based telemetry group Intelligent Sensing Anywhere (ISA) became the first Portuguese SME to issue shares on Alternext in June 2012.
Last week real estate fund Nexponor followed.
ISA president Jose Basilio Simoes is pleased with his choice to go public, saying the move has made his company much more visible and thus more interesting to investors.
Euronext Lisbon is encouraging SMEs to list and has even offered reductions on IPO costs.
Business lawyer Paulo Bandeira said IPOs carry obvious advantages for struggling companies that need to raise funds.
"It allows them to finance themselves more easily" as the funds raised do not need to be paid back, he said.
A listing also "offers more visibility and the required scrutiny of their businesses lends confidence to investors," he added.
A stock listing is also a stepping stone to issuing corporate bonds, a source of financing that is relatively little used in Europe compared to the United States.
But Bandeira noted that currently the bond market offers "financing at the same rates, or higher, than that of banks."
The stringent requirements on transparency and reporting information are not to the liking of some businesses, which prefer the cosy relationships they have long enjoyed with banks.
And a stock issue means the giving up some control.
"Portuguese entrepreneurs find it hard to share control and the running of their companies," said business lawyer Daniel Proenca de Carvalho.