Launch of the JEREMIE regional funding initiative

JEREMIE - Supporting improved access to finance for SMEs in the European regions

Danuta Hübner, the European Commissioner for Regional Policy, and Francis Carpenter, Chief Executive of European Investment Fund (EIF), today officially launched a joint initiative to improve the access to finance for SMEs in regions of the European Union.

The Joint European Resources for Micro to Medium Enterprises initiative, known by the acronym JEREMIE, will enable European Member States and Regions to use part of their structural funds allocations more efficiently and flexibly through new financial instruments designed to support micro-, small- and medium- scale enterprises (SMES).

Improving access to finance and risk capital for SMEs is a key element of the EU's Lisbon agenda. JEREMIE's aim is to enhance financial instruments supporting SMEs, such as loans, equity, venture capital and guarantees, provided within the EIB group. The objective is to switch from grants to market-based instruments that encourage private sector involvement. In this way, the structural funding from the European Regional Development Fund (ERDF) will deliver greater benefits to the market.

Preparation: assisting regions through the EIF JEREMIE team

EIF has a dedicated JEREMIE team of 13 staff and 4 consultants, operational since January 2006, co-financed by EIF and the European Commission. The team assists regional and national authorities in identifying and evaluating the market gaps that affect SMEs in their respective regions and also contributes to the design of JEREMIE actions to support SME finance. The evaluations are free of charge for the regions and will cover the EU 25 and 2 Accession countries and shall be used by national and regional authorities to finalise their operational programmes and action plans. So far, some 60 regions across Europe have expressed their interest to participate with the JEREMIE initiative. EIF and the Directorate General for Regions of the European Commission (DG Regio) will publish the evaluations on their websites by end 2006.

Implementation

From 1 January 2007, on the basis of the JEREMIE evaluations, the Member States/regions will be able to implement the JEREMIE initiative. Instead of being given as a grant that can be spent once only, ERDF funding will be placed with a Fundholder. EIF, amongst others, will bid to become a Fundholder. The Holding Fund Manager will select and formally accredit financial intermediaries (including venture capital, loan or guarantee funds or micro-credit providers) through a consultation of the market, acting as organiser and arranger on behalf of the Member State/region. In turn, the financial intermediaries would make available equity or loans to SME's. The focus lies on technology transfer, start-ups, technology and innovation funds as well as microcredit.

EIF's Chief Executive, Francis Carpenter, said: JEREMIE is a "tool-kit" to create financial products that are focussed on redressing gaps in SME finance. I believe that it will provide an effective response to the range of demands made by the regional and local authorities. JEREMIE brings together the expertise of the different financial European institutions to use Community funding resourcefully to support SMEs.