Implementation of the JEREMIE initiative in Poland Prague, 8 November 2011
Poland - main beneficiary of EU structural funds - 20% of allocation within cohesion policy (EUR 67 bln) Over EUR 10 bln of NSRF committed to the enterprise sector 2
NSRF resources committed to the enterprise sector (EUR) Operational Programme Whole allocation of each OP (2007-2013) Resources committed to the enterprise sector under each OP Per cent of the allocation committed to the enterprise sector under each OP All ROPs (16 regions) EUR 16,6 bln EUR 3,99 bln 24% OP Innovative Economy OP Development of Eastern Poland OP Infrastructure and Environment EUR 8,25 bln EUR 5,81 bln 70% EUR 2,27 bln EUR 447,61mln 20% EUR 27,91 bln EUR 225 mln 0,8% 3
NSRF resources committed to Financial Engineering Instruments (EUR) Regional Operational Programmes 828,6 mln Operational Programme Innovative Economy 153,0 mln Operational Programme Development of Eastern Poland 20,0 mln Total EUR 1 001,6 mln 4
Why JEREMIE? (motives and objectives) Grants Financial Instruments Less effective (limited population of supported SMEs) Interfere with market mechanisms Mainly short-term effects Relatively small-scale impact compared to large administrative involvement Relatively low net effect Revolving nature (+multiplier) Bigger number of supported SMEs Flexibility and focus on the actual market demand Introducing new financial instruments supporting SMEs Strengthening regional market of financial intermediaries 5
JEREMIE in Poland is being implemented at: national level or regional level with the use of a Holding Fund system or without a Holding Fund system 6
JEREMIE in Poland At national level (EUR 173 mln): Operational Programme Innovative Economy (venture capital) Operational Programme Development of Eastern Europe (reguarantee) 7
JEREMIE in Poland At regional level (EUR 828,6 mln): Without a Holding Fund (12 regions) Operational Programme (MA) With a Holding Fund (6 regions) Operational Programme (MA) Holding Fund Financial Intermediaries Financial Intermediaries Entrepreneurs Entrepreneurs 8
Financial instruments regional Holding Fund System Financial products available within JEREMIE initiative Loan instruments Guarantee instruments Capital instruments global loan, financial line, re-guarantee, wallet guarantee, capital support of technology transfer funds, capital support of mezzanine funds; Target group: banks and parabanking institutions 9
Agreements within JEREMIE initiative (PLN mln) Budget of 6 Holding Funds PLN 1 702,9 mln EUR 405,5 mln Holding Fund and financial intermediaries - 27 agreements for the amount of PLN 356,99 mln EUR 85,00 mln Financial intermediaries SMEs - 2288 agreements for the amount of PLN 179,1 mln EUR 42,65 mln Holding Fund Managers Agreements with final recipients signed by financial intermediaries 10
How are we doing it? Products Promotion, information and assistance for SMEs Close cooperation of the Managing Authority with the Manager of the Holding Fund and financial intermediaries 11
Procucts (reguarantee in Wielkopolska Region case study) 12
SWOT analysis Strengths - leverage of public resources - complementary to a grant system - focus on the market gaps - use of specialist knowledge - innovative and pilot initiative Weaknesses - regulatory framework taking into account specificity of returnable instruments both at national (i.a. equity instruments) and EU level (state aid, exit policy, monitoring system, selection of a HF manager in the new financial perspective); - complicated structure JEREMIE in Poland Opportunities - wider use of revolving instruments - private capital involvement - wider project portfolio for SMEs - bonuses for good results - sustainable mechanism of SMEs support - prepares for the new programming period Threats - SMEs attitude (lack of interest in repayable instruments as beneficiaries have become accustomed to grants) - weak commitment of financial intermediaries - Information and promotion - market dependence (financial crisis) - complicated cooperation and involvement at institutional level (MA, HF, FI and final beneficiaries) 13
Next steps (plans and modifications) adjusting implemented products to current market requirements (financial intermediaries and SMEs lower own contribution and product fees) diversification of products (new products i.e. mezzanine) improvement of the procedures, systems and institutions involved, assessment as the basis market failures and investment needs identification prepared for the whole system not only for financial instruments sector, promotion and information campaigns of financial instruments as a continuous source of resources. 14
Thank you for your attention Radosław Krawczykowski Marshal Office of the Wielkopolska Region e-mail: radoslaw.krawczykowski@umww.pl 15