Brussels, 19 April 2018 The JEREMIE Extremadura Instrument / SPAIN César MORCILLO Director Office of Extremadura in Brussels
Brussels, 19 April 2018
The JEREMIE Extremadura Instrument / SPAIN
César MORCILLODirector
Office of Extremadura in Brussels
Main features
- 1/17 regions of Spain
- 41,635 km2 (> Belgium)
- 1,1 million inhabitants
- 26 inhab / km2
- GDP pc: 16 028 euros
Key sectors
- Agriculture
- Energy
- Tourism
- Health care
- ICTs
ESIF 2014-2020
3 billion euros
- ERDF: 1.485 billion euros
- ESF: 591 Meuros
- EAFRD: 891 Meuros
Extremadura / SPAIN
Background: who?
Background: why?
• New reality:
• Need to address the SMEs credit demand, at a time of low liquidity
and high restriction of access to financial markets
1
• New support:
• Less grantsmore financial resources more beneficiaries
• Promote the culture of entrepreneurship more risks
2
• New capacity building:
• New procedures and new framework adaptation
• New legal instruments overcome the traditional approach
3
Fund: what?
• Financial instrument. JEREMIE Extremadura
• EU funds from Extremadura ERDF OP 2007-20131
• Budget. Allocation of 15.7 Meuros absorbed in 2 months
• 29.95 Meuros = 16.9M ERDF + 2M public + 11.05M private2
• Thematic focus: loans for growth & innovation projects
• Final recipients. SMEs & self-employed3
Set-up and implementation: how?
Interest of new forms of support to SMEs
Evaluation study of SMEs access to finance
Uncertaintyabout theviability
Difficulty to fully understand the process
Good absorptionlevels of ERDF OP 2007-2013
Evidence about the "market failures".
Decision to set up a holding fund
Selection of the Holding Fund manager
Signature of the fundingagreement
Set-up and implementation: how?
Enlargement Addendum to thefunding agreement
Addendum to theoperationalagreement
Constitution of thefinal portfolio: 29.95 Meuros
Initial public allocation (15.7 Meuros)
Set-up and implementation: how?
Set-up and implementation: how?
Main results
- 40,490,472.14 euros lent to SMEs through loans.
- 135.2%: utilisation rate.
- 1,022 loan operations from 1,000 to 1,000,000 euros.
- 39,619: average loan size.
- Range of loan maturity: between 1 to 10 years.
- Average loan maturity: 52 months.
- 934 SMEs obtained loans.
- 854 micro, 71 small and 9 medium enterprises.
- 43% of the portfolio innovative SMEs (more than
doubling the initially agreed 20%).
- An average of 4 employees per final recipient.
- 63 sectors beneficiaries.
- The top three sectors of Extremadura’s economy (food
manufacturers, wholesale trade and retail trade) constituted
approximately 46% of the portfolio.
Lessons learned: success factors
JEREMIE Extremadura was launched at a time of great weakness of financial
markets and extreme need for SMEs.
The financing of working capital needs enabled the continuation of economically
viable businesses.
The selection of the European Investment Fund as Holding Fund manager has
guaranteed the necessary professionalism and knowledge.
Lessons learned: challenges
• The regional government had previously supported business
development & innovation mostly through grants1
• The lack of knowledge about financial instruments at the
beginning of the process was a handicap2
• Change of mindset at the political and technical levels to
adapt to the new framework3
Lessons learned: outlook
The crisis was a “test
bench” for the
development of new
financial instruments in the
future.
Financial instruments are
complementary to grants.
They don’t overlap.
Financial instruments in
place should be flexible
enough to adapt to a
changing market.
Clear regulatory rules,
supported by interpretative
documents based on
experience and the results
of audits carried out, are
crucial to:
- Facilitate the management
tasks of financial
intermediaries.
- Reduce the eligibility
problems of certain projects.
Thank you
www.fi-compass.eu