Transcript Internationalization of SMEs

Guarantee Schemes response to the financial crisis
APEC Symposium on SME strategies to manage the impact of the Global Financial Crisis –
Session II: Managing the liquidity crisis and the credit crunch
Marcel Roy
Secretary General
AECM
Rue Washington 40, 1050 Brussels, Belgium
Tel/Fax: 00 32 / 2 640 51 77 – [email protected] / www.aecm.be
AECM Background
34 active schemes in 18 countries
Key figures (31.12.2007, in €1.000.000)
–
Own Funds
€
–
Guarantees issued in 2007
€ 23.972
–
Outstanding commitments
€ 55.423
–
6.125
Leverage Cap / commitments
> 10 x
SMEs beneficiaries
> 1,7 Million
Strong market demand for guarantees
2000 - 2007: Portfolio growth by 89,8 %
AECM volumes guarantees in portfolio
60.000.000
50.000.000
40.000.000
30.000.000
Portfolio guarantees
20.000.000
10.000.000
0
2000
2001
2002
2004
2003
Years
2005
2006
2007
Impact of the crisis
SME financial situation:
SMEs are impacted in various ways:
• Banks need to manage balance sheets and increase
regulatory capital positions => risk of credit rationing
• SMEs are affected as suppliers to large companies,
particularly in problem sectors (automotive and building)
• Increase of payment delays => risk default of otherwise
healthy SMEs
Impact of the crisis
Access to finance situation:
Contrasted picture according to MS:
• Intensity of crisis impact very different, from very low (Czech
Rep., Slovakia) to very pronounced (Hungary, Estonia)
• Supply: More difficult access to finance for SMEs (credit
conditions tightened, more selective credit policy according to
creditworthiness, reduction or cancellation of credit lines)
• Demand: Decreasing demand for investment loans,
increasing demand for working capital loans
Guarantee schemes’s strength in crisis
–
Unique intermediary function between SMEs, lenders and Public
authorities, based on consensus, added value and shared
responsibility for all parties involved
Lender
Mutual
Guarantee
Scheme
SME customer
Public
Authorities
Types of Guarantee products offered
–
–
Generally: Straight-forward loan guarantees for
SMEs:
–
Guarantee issued on behalf of SME to bank to
substitute missing collateral
–
In case of default, GS pays out amount of loan covered by
guarantee (usually between 50 – 80% to lender
–
Offered for all stages of SME life-cycle (Start-up – Transfer)
But also other types of guarantee products offered by
some Guarantee schemes:
Guarantees for: Micro loans, leasing, factoring, mezzanine finance,
risk capital, internationalization, projects, EU funding, etc.
Guarantee schemes’ response
High degree of added value of guarantees for banks:
•
Risk sharing: Up to 80% of credit amount
•
Reliable partner: Specialized entities subject to supervision and
prudently managed
•
First class collateral: Often payable on first demand and for face
value of guarantee amount
•
Mitigation effect: Presence of guarantee can lower regulatory funds
requirements (subject to conditions)
•
Specific credit assessment: Knowledge of local context and SME
sector (qual. Factors), individual assessment process
•
Development of new lending business: Build-up of SME portfolio
with cross-selling opportunities
Guarantee schemes’ response
High degree of added value of guarantees for SMEs:
•
Access to finance for economically sound projects
•
Recognition of qualitative factors in MGS risk analysis
•
Support services and third party analysis by sectoral
specialists of business plan and model
•
Non-profit orientation of Guarantee scheme
•
Intermediary function of Scheme towards lender
•
In mutual schemes, participation in management of
scheme
Guarantee schemes’ response
High degree of added value of guarantees for public
authorities:
–
Individual risk assessment and follow-up
–
Financial intermediary for public policy:
• Counter-guarantee element (reg., nat., EIF-CIP)
=> Cost effective leverage effect of MGS’ regulatory own
funds:
Leverage effect of 10 x € 1 with e.g. a 50% coverage :
– € 10 of guarantees
– € 20 of bank loans
– even higher amount of final investment
Contact
AECM
Rue Washington 40
1050 Brussels
Belgium
Tel/Fax:
E-mail:
Website:
00 32 / 2 640 51 77
[email protected]
www.aecm.be