evaluation of the economic development operative programme jeremie programmes
TRANSCRIPT
Evaluation of the Economic Development Operative
ProgrammeJeremie programmes
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
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)
• 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)
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
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
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)
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
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
*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*)
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
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 -
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
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
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
