Aubin Bonnet
European Investment Fund
This presentation was prepared by EIF. Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
MONITORING COMMITTEE MEETING FOR OPERATIONAL PROGRAMME I (2007 – 2013)
Investing in Competitiveness for a Better Quality o f Life
JEREMIE Malta
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1. EIF at a glance
2. JEREMIE activities
3. JEREMIE MALTA:
� Guarantee instrument
� Preliminary results of the Guarantee
instrument
4. Questions & Answers.
4
EIF at a Glance
Dual Objective of Meeting EU Policy Goals & Generating a Satisfactory Return
EU specialised institution for SMEs, risk financingVenture Capital and Mezzanine (fund of funds)Structuring and Guaranteeing portfolios of SME & microfinance loans/leases
Authorised Capital € 3bnEIB: 61%EU: 30%Fin. institutions: 9%
Geographic Focus /Geographic Focus /Geographic Focus /Geographic Focus /IntermediariesIntermediariesIntermediariesIntermediariesEU 27, EFTA, Candidate CountriesDistributing through Banks and Funds AAA rated
Staffing, Culture and ValuesStaffing, Culture and ValuesStaffing, Culture and ValuesStaffing, Culture and Values
Leading-edge modern institution
Adapting to changing market conditions
Attracting talented staff
High standards of compliance and integrity
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EIF’s Shareholders
� EIB: Main shareholder (61%)(61%)(61%)(61%)
� European Investment Bank’s shareholders: 27 EU Member States
� European Community represented by the European Commission (30%)(30%)(30%)(30%)
� 28 public and private financial institutions from 17 countries (9%)(9%)(9%)(9%)
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Operating Model of EIF
VALUE ADDEDVALUE ADDEDVALUE ADDEDVALUE ADDED
�Own resources
�EIB (RCM, MEZ)
�EC (CIP)
�MA (JEREMIE)
�MS (ERP)
�Funds of Funds
�Product Development
�Mandate Management
�Transaction Execution
�Risk Management
�Follow-up &
Relationship Focus
� Commercial Banks
� Development &Promotional Banks
� Guarantee Institutions
� Fund Managers
SMEsSMEsSMEsSMEs
Suppliers / Suppliers / Suppliers / Suppliers / MandatorsMandatorsMandatorsMandators
TransformationalTransformationalTransformationalTransformational
Key Success Key Success Key Success Key Success FactorsFactorsFactorsFactors
IntermediariesIntermediariesIntermediariesIntermediaries
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Public Stock Markets
SM
E C
ash
Flo
ws
SME Development Stages
Pre-seed Phase
HIGHER RISK
Seed Phase Start-up Phase
LOWER RISK
Emerging Growth Development
Portfolio Guarantees & Credit Enhancement
EIF Tool Kit for SMEs
Business Angels, TT
Microcredit
VC Seed & Early Stage
Formal VC Funds & Mezzanine Funds
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� JEREMIE for: Joint European Resources for Micro to Medium Enterprises
� Joint initiative of the EU (DG Regio & EIB Group) launched in October 2005
� Joint also because it potentially combines resources from the EU, National Public Authorities, EIF, EIB and/or other financialinstitutions
� Participation in JEREMIE optional for each country – Holding Fund Management or Technical Assistance
� Uses European Regional Development Funds for enhancing SME access to finance in New Member States and in Regional Development areas through sustainable and “revolving” financial instruments
� Creates leverage
� Encourages move away from grant dependency
JEREMIE: Increasing the Deployment of Self-Sustaining Financial Instruments for SMEs
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JEREMIE : financial intermediaries of EIF
A network of private
organisations to handle Structural
Funds.
A network of private
organisations to handle Structural
Funds.
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Part III:
JEREMIE MALTA
� Financial Instrument : Guarantee instrument
� Preliminary results of the FI implementation
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Background
� March 2010 : Signature of the Funding Agreement between Government of Malta & EIF.
� April – September 2010 : Fact finding among Maltese Financial Intermediaries + Approval of the Call for Expression of Interest.
� September 2010 : Launch of the Call for Expression of Interest to select Financial Intermediary.
� November 2010 : Three proposals received from Maltese Financial Intermediaries.
� November 2010 – March 2011 : EIF internal selection process.
� April 2011 : Signature of the Operational Agreement with the retained candidate: Bank of Valletta.
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EUR 8.8m from the JHF stimulate at
least EUR 51.04m of new SME lending.
Leverage of 5.8x Guarantee coverage: 75% up
to the cap rate
New Portfolioof Loans
EUR 8.8m from JHFEUR 8.8m from JHFEUR 8.8m from JHFEUR 8.8m from JHF
Cap rate up to 23%
Summary of the terms of the First Loss Portfolio Guarantee (Financial Instrument )
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Summary of the Guarantee instrument
� Objectives and Advantages: Enhance access to finance for SMEs , and in particular to microcredit
� Total amount of the allocation: EUR 8.8m
� Guarantee Rate: 75%
� Cap Rate: Up to 23%, thus ensuring a leverage of minimum 5.8 times.
� Portfolio to built up: EUR 51.04m
� Availability Period: 36 months
� Loan Maturity 12 months and maximum of 120 months including the relevance grace period (if any)
� Industry Limits: All SMEs will be supported by the Guarantee except:
� Firms in difficulty or
� SMEs active in the following field: Arms production and trading, Gambling, Tobacco, Human cloning, Genetically modified organisms, Fishery and aquaculture sectors, Primary production of agricultural products,
� SMEs presented in article 1 (c-g) of the De-Minimisregulation,
� Real estate, Construction.
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� Guarantee payment: within 90 days following the guarantee call
� Lean procedures vis-à-vis Financial Intermediaries:
� Full delegation to originate loans according to FI policy
� Automatic inclusion based on eligibility criteria
� Annual reporting and regular controls
Summary of the Guarantee instrument
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SME Loans per month (Number + Amount)
� Total SME Loans committed:
� Number: 288
� Amount: EUR 25.2m
� SME Loans disbursed (at least partially):
� Number: 175
� Amount: EUR 11.26m
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Breakdown per SME size:
Number of SME
Loans
Investment Amount (EUR)
SME Loans (EUR)
Average Amount
Micro 214 19,643,719 13,008,858 60,789
Small 60 15,729,941 9,024,280 150,405
Medium 14 4,473,931 3,167,510 226,251
Total 288 39,847,591 25,200,648 87,502
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Breakdown per SME: maturity and amount
58% SME Loans have a loan maturity above 7 years
75% SME Loans have an amount under 100k
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Advantage for SME (Interest Rate + Level of Collateral)
� Interest Rate benefit:
� Average discount around 1%, ranging between 0.29% to 1.6%.
� 175 facilities were disbursed with a IR reduction of more than 1%.
� Collateral reduction:
� Current collateral cover of the Portfolio : around 30% Vs 37.5% foreseen in the Operational Agreement
� 150 facilities disbursed with a collateral cover below 25%.
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Specific figures (at end of 2011) for Start-ups and SMEs based in Gozo:
� 4 SME loans sanctioned with SMEs based in Gozo for an amount of 162.840€
� 80 SME loans sanctioned with Start-ups for an amount of 6.625.040€
� 55 SME microloans (<25.000€) sanctioned for an amount of 820.362€
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Communication activities:
Date Publicity Quantity Target Group GoalNo of participants
(where applicable)
1st April 2011 - todateElectronic Banners
on Website
Varies from
1 to 7 on
different
General PublicInformation on
JEREMIE General Public
1st April - February
2012Billboards 6 General Public
Information on
JEREMIE General Public
1st April - 31st July
2011
Feature on Radio
Channels
General Business
Community
Information on
JEREMIE Radio Listeners
6th April 2011
Press Conference on
the Launch of
JEREMIE in Malta
1
Press, government
officials, bankers and
constituted bodies
Launching of
JEREMIE in Malta 50
6th April 2011 Press Release 1 PressLaunching of
JEREMIE in Malta Media outlets
7th April 2011Information session/
staff training 1
for branch managers
and business centre
managers
Product
information70
12th April 2011 Information session 1
Members of the
Malta Chamber of
Commerce,
Enterprise and
Industry
Information on
JEREMIE 50
13th April 2011 Information session 1
Members of the
Malta Hotels and
Restaurants
Association
Information on
JEREMIE 50
13th April 2011 Information session 1Members of the
GRTU
Information on
JEREMIE 150
18th April 2011 Information session 1 Malta EnterpriseInformation on
JEREMIE 30
10th April 2011 Information session 1 University studentsInformation on
JEREMIE 40
16th April 2011 Information session 1
SME Committee of
the Malta Chamber
of Commerce,
Enterprise and
Industry
Information on
JEREMIE 10
30th April 2011 Video Feature 1/ 30
minutesGeneral Public
Information on
JEREMIE
2nd May 2011
Special Supplement
of Malta Business
Weekly
1General Business
Community
SMEs Access to
Finance
Readers of Malta
Business Weekly
30th May 2011 Information session 1Creatives Arts sector
in Gozo
Information on
JEREMIE 20
During May 2011 Information session 1 Koperattiva BoardInformation on
JEREMIE General Public
Information and publicity measures concerning the EU Structural Assistance for 2007 - 2012
Many events organised by
Bank of Valletta that can be
regarded as one of the key
element of the success of the
implementation.
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Date Publicity Quantity Target Group GoalNo of participants
(where applicable)
9th June 2011 Information session 1
Gozo Business
Chamber and Gozo
Tourism Association
members
Information on
JEREMIE 30
10th June 2011 Information session 1Members of the
GRTU
Information on
JEREMIE 100
23rd June 2011
Article on Chamber
of Commerce
Magazine
1General Business
Community
Information on
JEREMIE
Chamber of Commerce
Magazine Readers
19th August 2011 Television interview 1 General PublicInformation on
JEREMIE General Public
25th August 2011 Information session 1Start-up Business at
ETC
Information on
JEREMIE 20
23th September 2011Workshop on Risk
Capital 1 Business Community
Information on
JEREMIE 90
4th October 2011Business Breakfast
for Accountants 1 Accountants
Information on
JEREMIE 40
7th October 2011 Information session 1Start-up Business at
ETC
Information on
JEREMIE 20
10th October 2011 Press Release 1 Press Press release Media outlets
11th October 2011 Information session 1Ta' Maggi Industrial
Estate
Information on
JEREMIE 30
11th October 2011 Exhibition1000
Brochures Malta Design Week
Information on
JEREMIE Public at Exhibition
12th October 2011 Press Release 1 Ministry of Finance Press release General Public
14th - 16th October
2011
Stand and
information sessions1
General Business
Community
Information on
JEREMIE 200
6th November 2011
Television Feature
on Flusek (Prog. on
Net TV)
1 General PublicInformation on
JEREMIE General Public
14th November 2011 Budget Speech 1 General PublicInformation on
JEREMIE General Public
16th November 2011 Information session 1 University StudentsInformation on
JEREMIE 40
23rd November 2011 Information session 1
International
vocational college
students
Information on
JEREMIE 20
Information and publicity measures concerning the EU Structural Assistance for 2007 - 2012
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Planned activities for 2012:
1. New rebranding and advertising campaign on TV, print media, and bill boards 22nd April 2012;
2. Information Session for accountants 17th May 2012;3. Mail Shot for the Medical Profession;4. Participation on BOV Business to Business at the
Excelsior Hotel May 2012;5. Information Session in Gozo with GRTU, Gozo Business
Chamber, Gozo; Tourism Association and Malta Enterprise
6. Information Session with accountants and auditors; 7. Articles in the print media and press release;8. Workshop on financial engineering instruments Brussels;9. On going one to one mentoring meetings;10. And more coming up.