Access to finance for SMEs Information Seminar Gerhard Huemer, UEAPME Director Economic and Fiscal P

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Access to finance for SMEsInformation
SeminarGerhard Huemer, UEAPMEDirector Economic
and Fiscal PolicyBucharest, 17 March 2009
PHARE Business Support Programme of the European
Union UEAPME - SME FIT II
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UEAPME an overview

• European association of crafts, small and
  medium-sized enterprises
• 12 million enterprises
• 55 million people across Europe
• One of the four European Social Partners
• CNIPMMR is member

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UEAPME Economic and Fiscal Policy

• Macroeconomic questions (monetary policy, fiscal
  policy, wages)
• Tax policy
• SME finance and relations to Banks / Basel II
• State aid policy
• Services of general economic interests / market
  regulation
• Innovation in SMEs
• Public procurement

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Access to finance different aspects

• SMEs from the point of view of financial service
  providers
• Problems and challenges for SMEs
• Market failures demand for public interventions
• Support for SME finance in the EU State aid
  policy
• European instruments to support access to finance
• Plenty of room for national measures
• Access for SMEs to EU funds

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The point of view of financial service providers

• Credit and loans to SMEs are costly and not
  profitable
• SMEs out of the scope of risk capital funds
• SMEs are less transparent and loans are risky
• SME lacking on business plans and reporting
  standards
• but
• SME portfolios are relative stable
• SME are important clients at regional and local
  level

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Access to finance problems and challenges

• SMEs are mainly debt financed
• Difficulties to get riskier projects financed by
  debt instruments
• Why equity is missing?
• Tax incentives
• Readiness for external investors
• Who will take the risk?

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Market failures demand for public interventions

• Market will lead to insufficient activities in
  the SME sector
• Public intervention to correct market failures
  are justified
• Public sector should to take out some of the
  risks and
• Public sector should reduce the cost gap
• Different instruments
• Grants for SME investments
• Reduced interest rates for SMEs subsidies for
  SME loans
• Guarantees for SME credits and loans
• Mezzanine / Equity Instruments

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Support for SME finance in the EU State aid
policy

• EU allows State aid only under specific rules
• State Aid instruments
• De minimis regulation
• General Block Exemption Regulation
• Notice on guarantees
• State aid targets
• SME investment and employment
• RD and Innovation
• Energy saving and Environment protection
• Risk capital

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European instruments to support access to finance

• Programme for Competitiveness and Innovation
  (CIP) supports
• SME guarantees
• Microcredit's
• Equity finance
• JEREMIE supports the use of Structural Funds for
  SME finance
• EIB global loan programme for SMEs
• New initiative from EIB/EIF group
• better target loan programme
• Risk sharing models for loans
• Mezzanine Finance instruments

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Plenty of room for national measures

• SME finance instruments still differ from country
  to country
• Solutions have to be developed in line with
  national institutions and traditions
• EIB/EIF dont finance SMEs but help national
  intermediaries
• National means or money from EU Funds play the
  dominant role
• Role of financial intermediaries / promotional
  banks
• Role of pubic and semi-public banks

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Access for SMEs to EU funds

• Main EU funds accessible for SMEs
• Structural funds, cohesion funds, social funds
• CIP
• Framework Programme for RD (FP7)
• Specific Programmes for Environment
• 95 of money available for SMEs are distributed
  via national intermediaries exemption FP7 and
  environment programmes
• EU Programmes are complicate support services
  for SMEs are needed on national level

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Questions and answers
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Thank you for your attention!
PHARE Business Support Programme of the European
Union UEAPME - SME FIT II