ISMEA – SGFARural Credit Guarantee Funds

January 12th 2006 - Budapest

The Past

Subsidiary guarantee

Ministry of Economy

Rural Credit Guarantee Fund (FIG)

Supervision

The Change – First Step

Public rural credit guarantee funds reorganization: 2004 December – the Fund merged by

incorporation into ISMEA ISMEA – Rural Market Services Government

Agency Supervised by Ministry of Agriculture

The Change – Second Step

ISMEA added new guarantee products to the subsidiary guarantee

December 2005 – ISMEA’s guarantee activities pass to SGFA (company 100% owned by ISMEA)

Current Situation

Direct guarantee

ISMEA

SGFA

100%

Ministry of Agriculture

Supervision

Subsidiary guarantee

The Subsidiary Guarantee Fund

The fund was established in 1961 in order to help farmers to access long-term agricultural loans to start up new business

In the seventies the Fund was allowed to issue guarantees for agricultural medium and short-terms loans too

The Subsidiary Guarantee

Automatically issued by the Fund Paid by the Fund when the banks incur

a loss after the primary guarantees collection

The Fund’s Activity

Loan

Primary guarantee

Subsidiary guarantee

Additional guarantees

Bank Borrower

From To

Bank

Fund Bank

Borrower Fund

Borrower

After the payment

After the primary guarantees compulsory collection

Cover Percentage

Amount disbursed by the bank

Short-term loansLong-term

loansMedium-term

loansup to €.104,000 55%

between €.104,000 and

€.775,000 35%from €.775,000 no guarantee

up to €.5,200between €.5,200 and €.1,550,000 75% 55%

from €. 1,550,000

Percentage of loss

no guarantee

no guarantee

The Direct Guarantee Fund

Still in progress A State counter guarantee is provided

for SGFA guarantee engagements Three products

First Call Guarantee Co-Guarantee Counter Guarantee

Thank you

Giorgio Venceslai venceslai@sgfa.it SGFA Via In Lucina, n.17 00186 – Rome – Italy Tel. +390668406430