Hungarian SME policy

1
Hungarian SME policy Development after EU
accession

• Tamás Leskó, Hungary

2
SMEs in Hungary

• The SMEs influence significantly the
  competitiveness of the Hungarian economy
• 99,9 of the total number of enterprises are SMEs
• 872 000 SMEs operating (December 2004)
• SMEs employ more than 74 of employees employed
  in the private sector
• The contribution to the Gross Added Value of the
  SME sector is approximately 50
• Their share of export is 36

3
SME development policy before EU accession

• Act on small and medium-sized enterprises and the
  promotion of their development
• Phare programmes
• Micro Credit Programme
• Promoting the co-operation among SMEs
• Introducing e-business to SMEs
• National grant programmes
• Investments
• EU preparation
• Interest subsidies

4
Grants for SMEs
SME development policy before EU accession
Number of assisted SMEs The amount of subsidy (EUR million)
2001 2 404 106,1
2002 1 012 43,4
2003 4 851 48,0
Total 8 267 197,5
5
SME development policy before EU accession

• The EU at your doorstep
• 473 presentations
• In 118 sub-regions (NUTS IV) of 14 counties
• 13 500 SMEs took part
• Industrial parks
• 179 business parks from 1996 to 2005
• 2 500 enterprises

6
SME development policy after EU accession

• New SME definition
• Reducing administrative burdens
• Simplified Tax for Entrepreneurs
• Simplified business registration
• Contract samples
• Introducing tax allowances and reducing tax rate
• Tax rate of personal income tax and corporation
  tax was reduced from 18 to 16
• Tax allowances to encourage investments by SMEs

7
EU Structural Funds in SME development
Economic Competitiveness Operational Programme
Number of assisted SMEs The amount of subsidy (EUR million)
2004 4 010 94,1
2005 2 504 41,1
Total 6 514 135,2
8
Financial programmes

• Credit programmes
• Financing investment
• Financing working capital
• Factoring programme
• Subsidised interest to spread factoring among
  SMEs
• Credit guarantees
• 67 thousand SMEs, EUR 2150 million (2003-2005)
• Venture capital

9
Credit programmes
Name of Construction Amount of credit (EUR) Duration (year)
Micro Credit max 25.000 max 8
Midi Credit max 100.000 generally 6
SME Credit for a Successful Hungary 20.000- 4.000.000 max 15
Széchenyi Card max 40.000 1
10
Promoting entrepreneurial culture

• Calls for application for gipsy (roma)
  entrepreneurs
• Special consultancy
• State aid for purchasing machinery
• Providing information
• On EU requirements
• Specific publications
• Student programmes

11
Education of entrepreneurship

• Student enterprises
• Education for primary and secondary school pupils
• Fairs of student enterprises
• Competition of students on entrepreneurial skills
• Job Shadow programme
• Conferences for students
• Conferences for teachers

12
New Directions in the Hungarian Enterprise
Development Policy

• New principles in enterprise development policy
• Functional Approach
• Sustainability
• Institutional Development, Capacity Building
• Co-ordination Based on Market Mechanisms
• For the period of 20072013 a new micro-financing
  system to be set up through EIFs JEREMIE
  mechanism

13

• Thank you for your kind attention!

Mr. Tamás LESKÓ Deputy Head of Department
Department for SME Development Ministry of
Economy and Transport, Hungary lesko.tamas_at_gkm.go
v.hu