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Evaluation of the Economic Development Operative
ProgrammeJeremie programmes
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Agenda
1. Introduction
2. Progress and allocation of funds
a) Credit products
b) Guarantee products
c) Venture capital funds
3. Characteristics of the projects
4. Key conclusions and recommendations
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1. Introduction – FIN-EN project (1)
• “Sharing methodologies on Financial Engineering for enterprises” – sharing experience on the use of financial instruments, whithin Interreg IV C
• Duration: 01.01.2012 – 31.12.2014
• Involved partners: IT (lead partner), DE, DK, FR, GR, HU, LV, LT, PT, SI, ES, UK, EAPB (European Association of Public Banks)
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• The project consists of 3 components:
− Management and coordination
− Communication and dissemination
− Sharing experiences and analysis of best practices – 3 thematic working groups:
TWG1: ProgrammingTWG2: ExecutionTWG3: Monitoring and reporting (led by EDP MA)
• Further project tasks (led by EDP MA)
Mapping of project partners’ financial instruments in place:
− Database development
− Summarising report
1. Introduction – FIN-EN project (2)
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1. Introduction – Jeremie programmes
• The financial instruments played an important role when planning the EDOP:
23.9% of the funds allocated to them
• The first projects were contracted at the beginning of the period in January
2008 within the microcredit component
• For the execution of the programme an extended intermediary network is
involved (118 accredited intermediaries by the end of 2012)
• With the progress of the programme combined products were introduced
where financial instruments and grant-type funding are accessed through one
single application
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2. a) Credit products
Source: NFÜ (31.12.2012)
2008
SME Credit
2009 2010 2011 2012
UMFOR
New Széchenyi Credit
NH Microcr.
NHSmall cr.
NH Microcredit B
NH Microcredit A
CMCEDOP
CHOP
Budget (Bill. HUF)
Contr. (Bill. HUF)
75.8 46
7.3 7.1
58.2 33.1
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2. a) Credit products – Microcredit (1)
Type of intermediaryRefinanced transact.(no.)
Amount refinanced (Bill. HUF)
Average am. ref. (Bill. HUF)
Average interest
Credit institutions (banks and savings co-operatives)
445 5.6 12.6 7.06%
Other financial undertakings 2,445 30.0 12.3 7.37%
Local Foundations for Enterprise Promotion 1,982 11.6 5.9 6.87%
Source: MV Zrt. (31.12.2012)
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2. a) Credit products – Microcredit (2)
The programme’s advancement boosted after February 2011 due to
• The raise of the maximum level of contractable credits
• 100% refinancing (later decreased to 75% for credit institutions)
Monthly contracts of Microcredit / Small Credit / New Széchenyi Credit
Source: MV Zrt. (31.12.2012)
0.0
0.5
1.0
1.5
2.0
2.5
Un
its
Bill
. HU
F
Szerződött refin. hitelösszeg induláskor
Credit institutions Financial undertakings Local FEPs
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2. a) Credit products – CMC
•
• After alterations in the calls for proposal in January 2012 the number of contracting increased significantly
• Financial undertakings and local FEPs owe a similar share of contracted credits
• Due to the application scheme close monitoring is necessary
• Financial instruments accessed through combined products improve the business culture and financial thinking of micro enterprises
Source: MV Zrt. (31.12.2012)
Monthly contracts of Combined Microcredit
0
1
2
3
4
5
Un
its Bill
. HU
F
KMH szerződéskötések (refin. összeg)
Savings co-operativesFinancial undertakingsLocal FEPs
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*20% of contracted guarantee is considered as eligible expense
2. b) Guarantee products (1)
Source: NFÜ (31.12.2012)
New Széchenyi Guar.Portfolio Guarantee
2008
New Széchenyi Counter-guarantee
2009 2010 2011 2012
Budget (Bill. HUF)
Contr. (Bill. HUF)
26 12.3 (2.5*)
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2. b) Guarantee products (2)
Budget(Bill. HUF) Trans. (nr.)
Total guarantee (Bill. HUF)
Jeremie-guarantee (Bill. HUF)
Eligible expense
Average interest
26 408 16.8 12.3 2.5 8.98%
• Low number of transactions and weak intermediary activity
• The budget has been decreased on several occasions (partly due to progress and eligibility criteria)
• Parallel and well-known guarantee products are available on the market
• The combined product’s (CCG) system of single contact points is a promising initiative
Number of transactions (banks)
Source: MV Zrt. (31.12.2012)
Source: NFÜ (31.12.2012)
04080
120160
Un
its
Chart title
Series1
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2. c) Venture Capital Funds (1)
Source: NFÜ (31.12.2012)
Common Growth Fund
2008
Seed Capital Fund
2009 2010 2011 2012
Co-Investment Fund
C. Growth Fund
C. G. Fund
Budget (Bill. HUF)
Contr. (Bill. HUF)
31.5 16.9
6 -
22.5 -
12 -
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2. c) Venture Capital Funds (2)
• Three calls for proposal resulted in the set up of 22 venture capital funds (4 seed capital funds)
• A min. of 30% of sources have to originate from outside investors ensuring business approach
• A significant amount of venture capital funding is still available for enterprises
Distribution of Venture Capital Funds’ Jeremie-funding
Availability of venture capital
Source: NFÜ (31.12.2012)
Growth Funds (2009)40%
Growth Funds (2012)37%
Seed Funds (2012)
8%
Growth Funds (2013)15%
Chart title
Contracted23%
Available77%
Chart title
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3. Characteristics of the projects
• Most of the funding supported enterprises with commercial and scientific-engineering activity
• On a regional comparison Central-Hungary stands out
Source: MV Zrt. (31.12.2012)
Distribution of Jeremie-funding among industry sectors
Distribution of Jeremie-funding among regions
0
5
10
15
20
25
Bill
. HU
F
NSZC
CMC
Guarantee
Vent. Cap.
Central Hungary
33%
West Pannon10%
Central Transdanubia
10%
South Transdanubia
11%
South Great Plain11%
North Great Plain14%
North Hungary
11%
Chart title
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4. Key conclusions and recommendations
• Alignment of Jeremie-products and state supported financial instruments
• Further fine-tuning of the institutional system, rules of procedures and
monitoring
• Consequent and transparent communication with intermediaries and
beneficiaries
• Initiation of new combined products, considering to include related grants
and financial instruments whithin one priority axis
• Simplification and extension of the guarantee programme