JEREMIE

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JEREMIE

• JEREMIE stands for Joint European REsources for
  MIcro to medium Enterprises
• Joint resources because JEREMIE combines
  resources from ERDF national public sector
  EIB other IFIs, banks financial
  intermediaries.
• Not an organisation but a series of coherent
  actions

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Why JEREMIE?

• Enhanced Access to finance for SMEs in the
  regions is needed
• Renewed Lisbon Strategy and CSG stress the need
  to enhance
• market driven and sustainable financial
  products and instruments

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Main Actors of JEREMIE

• Commission DG REGIO with ENTR and ECFIN
• EIF EIB (EIB as loan capital provider)
• Other IFIs, mainly the EBRD for the 8 new MS,
  Council of Europe Dev. Bank (CEB)
• Other specialized financial intermediaries, I.E.
  KfW (DE), Caisse des dépots (FR),etc

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Main Actors of JEREMIE

• MS, Regions and managing authorities
• National and regional banks and financial
  intermediaries
• SMEs
• Micro credit (up to 25.000 EUR)
• beneficiaries
• Young or old first time entrepreneurs
• Women
• minorities

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JEREMIE PHASES

• Phase 1 Preparation
• Evaluations (2006-2007)
• Programming
• Phase 2 Implementation
• Selection of Holding Fund. MA allocated funds to
  Holding Fund
• Selection of Financial Intermediaries,
  accreditation
• Phase 3 Financing SMEs and micro-credit
  beneficiaries

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Phase 1 Evaluation

• Evaluation consists in
• gap analysis of potential demand and supply of
  financial products for SMEs in the regions
• identifying and recommending appropriate market
  driven instruments to fill the gap-proposed
  action plan

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Evaluation 1

• To be carried out by the EIF in close cooperation
  with the regions, in 2006 and early 2007
• EIF will be assisted by Commission services
• DG REGIO B1 Operational Desks
• Evaluation Unit
• DG ENTR, DG ECFIN

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Evaluation 2

• Expected inputs from
• European Micro finance Network( EMN)
• European Banking Federation
• European Venture Capital
• Association (EVCA)
• Other associations and networks

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Evaluation 3

• Evaluations, including Interim reports
• to be produced in Summer 2006,
• will be freely available to
• MS, Regions-managing
• authorities Interested holding funds
• and financial intermediaries
• Associations of SMEs and
• Chambers of commerce

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Who Finances the Evaluation?

• ERDF- Commission technical assistance credits
  will cover
• 75 of the cost
• EIF will cover 25 of the cost
• Budget for 2006 3.5 million EUR

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Phase 1 Programming

• interim reports of evaluations-gap analysis
  available in summer 2006
• Competent national authorities use conclusions
  and proposed action plan of evaluations (
  interim reports) when they elaborate programmes
• DG REGIO negotiates programmes based on
  evaluations interim reports
• DG ENTR and ECFIN also contribute to programming
  phase

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Phase 2 Selecting Holding Fund-option 1

• Member States or managing authorities wishing so,
  can award directly the holding fund tasks to the
  EIF
• A funding agreement must be negotiated and signed
  in this respect between MA and EIF

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Phase 2 Selecting Holding Fund-option 2

• Tendering procedure by MS or MA for the selection
  of holding fund
• MS or MA contract the relevant funding agreement
  with holding fund
• Commission services will advise
• on organizing tendering
• EIF willing to respond to tenders, alone or with
  IFIs/local financial institutions

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OP allocates funds to Holding Fund

• OP allocates funds to the H F for ALL types of
  financial products - then funds are paid by the
  OP to the HF
• Such payments are IRREVERSIBLE for the period
  2007-2015
• Supplementary irreversible contributions from the
  OP to the HF possible in the period 2007-2015
• Such contributions are eligible as interim ERDF
  payments ( art 77 of general regulation)

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The JEREMIE policy mix

• Following specific provisions of the Funding
  Agreement, the MS or MA
• with the Holding Fund
• monitor implementation ofJEREMIE
• define and periodically review the JEREMIE
  strategy and policy mix (supported financial
  products, targeted SMEs, etc)
• take and periodically review decisions on the
  necessary market driven instruments to implement
  the JEREMIE policy mix

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Selecting Financial Intermediaries

• Holding Fund proceeds to Call for expression of
  interest addressed to financial intermediaries.
• Holding Fund evaluates, selects and accredits
  financial intermediaries
• Accreditation subject to periodic review
• Holding Fund provides equity, loans or guarantees
  to selected fin. interm.

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Types of Financial Intermediaries

• Venture capital funds, including
• Start ups and Seed capital funds
• Business angels
• Technology and innovation funds
• Technology funds

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Types of Financial Intermediaries

• Guarantee funds
• Loan and mezzanine funds
• Micro credit providers
• Fin. intermediaries offering any combination of
  the above financial products and services

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Phase 3 What kind of support for SMEs?

• Maximum publicity for JEREMIE products for SMEs
  and micro credit beneficiaries (ensured by OP,
  Holding Fund and Financial Intermediaries)
• Financial intermediaries evaluate proposals by
  SMEs and provide them with
• Equity and Venture capital
• Mezzanine financing
• Guarantees
• Loans
• Advice and assistance

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Phase 3 Supporting Micro Credit Operations

• Banks are reluctant to consider such "social
  economy" operations
• Specialized Micro Credit Providers can fill the
  gap
• Credit up to 25.000 EUR
• First time entrepreneurs
• Young or old entrepreneurs
• Women
• Minorities, unemployed, etc

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Monitoring JEREMIE

• Holding Fund , in close cooperation with OP,
  monitors JEREMIE implementation by Financial
  intermediaries and reports to the MA
• Following effective demand for each type of
  financial product, MA channels funds from the OP
  to the HF
• HF following demand and efficient management,
  supports FI during the whole period 2007-2015

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Closure of OPs and JEREMIE in 2015

• At the closure of OPs at the end of 2015, ERDF
  grants transferred to Holding Funds must have
  been used at least once to
• finance SMEs( equity,VC, loans,
• guarantees)
• finance micro credit beneficiaries,
• cover guarantees offered by
• Guarantee Funds
• finance eligible management costs

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JEREMIE Added Value-1

• Evaluation of gaps carried out by EIF
• ERDF Programs for 2007-2013 planned
• timely on the basis of the gap analysis
• Only two selection procedures for
• the whole 9 years period 2007-2015.
• Strategy and policy mix based on the
• gap analysis on going monitoring

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JEREMIE Added Value-2

• One professional Holding Fund to
• Manage ALL financial products, based on
  gap analysis and effective demand-OPTIMUM
  FLEXIBILITY
• Select-accredit and transfer funds to financial
  intermediaries
• Monitor implementation by financial
  intermediaries and report to MA

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JEREMIE Added Value-3

• Recycling ERDF funds contributed to JERREMIE
  sustainability.
• Leveraging ERDF grants with private capital
  contributed by holding fund, Banks, financial
  intermediaries, other investors.