Slovenian financial instrument blends business support sources
Slovenia's experiences with a financial instrument that combined investment support from the European Regional Development Fund (ERDF) alongside the European Social Fund (ESF) are the topic of newly-published fi-compass case study. This Slovenian 'Programme of Financial Engineering Instruments for SMEs' was designed by the Government Office for Development and European Cohesion Policy (in its capacity as managing authority) during the 2007-2013 period.
Preparatory research first confirmed gaps in availability of finance for micro, small and medium-sized enterprises (SMEs). Access to such investment support was found to be limited by high collateral requirements and a stringent system of credit ratings. A holding fund of almost EUR 220 million (from the ERDF, ESF, national, and private resources) was then prepared in response to provide loans, guarantees, equity investments, and technical support grants for microenterprises and SMEs.
Simona Hočevar from the Slovenian managing authority appreciated the benefits and synergies for SME support schemes that were possible from combining the ERDF and ESF contributions with grants in this holding fund arrangement. She explains that: “Cooperation with the Slovene Enterprise Fund, commercial banks, venture capital companies and other private investors allowed us to activate additional resources for SME financing. We were able to support SMEs at different growth stages. This helped to improve the success rate of the target enterprises and to efficiently support many businesses.”
Factors influencing the holding fund's success are documented in the fi-compass case study. These include the Slovene Enterprise Fund's role in using non-financial support such as mentoring, coaching, workshops and networking services to complement the financial instrument's investments.
You can download and share the Slovenian case study here.