The Government approved on April 6, 2016, by means of a memorandum, the results of the ex-ante evaluation of the financial instruments intended for small and medium sized enterprises (SMEs) utilized as implementation instruments within the Operational Programs funded from European Structural and Investments Funds (ESI) for the period 2014-2020, namely, the Competitiveness Operational Program (COP), Operational Program Human Capital (OPHC), respectively the Regional Operational Program (ROP).
The implementation of the financial instruments of the 2014-2020 Competitiveness Operational Program and of the 2014-2020 Regional Operational Program was awarded to the European Investment Fund, in its capacity as Fund of Funds.
The stages necessary for starting the implementation of the financial instruments were identified in the Memorandum. Thus, in the initial stage, the ex-ante evaluation shall be submitted, for information, to the Monitoring Committee of each of the involved Operational Program, and the summary of the ex-ante financial instruments shall be published on the website of the Ministry of European Funds. The procedure for negotiating and concluding the Funding Agreements between each Managing Authority (MA COP and MA ROP) and the European Investment Fund, in its capacity as Fund of Funds, shall be started and it shall subsequently select the financial intermediaries.
According to the European regulations, the use of financial instruments as implementation method for ESI funds shall be performed only based on an ex-ante evaluation which identifies the markets and the specific problems, providing at the same time a comparative analysis of the potential financial products.
The Ministry of European Funds decided to perform a single ex-ante evaluation of the financial instruments designed for small and medium sized enterprises within the Operational Program funded from ESI. The evaluation was coordinated by the Ministry of European Funds, in collaboration with the European Investment Fund, the Ministry of Regional Development and Public Administration, involved Managing Authorities and other partners, during the consultation processes involving the main stakeholders, in order to test their perception and the potential appetite for the proposed financial instruments.
The initial estimation of the operational programs is of approximately EUR 431.8 million, as a total amount allocated for financial instruments, out of which EUR 100 million represent Romania’s contribution to the open-ended collateral type of financial instrument within the SME Initiative.
During the ex-ante evaluation, an analysis of the market problems specific to each thematic objective was developed in order to identify the most appropriate financial instruments. Thus, for the problem related to the incapacity of the companies to provide sufficient collaterals in order to obtain lains, the most appropriate financial instrument which was identified is the guarantee instrument. For the issue related to the outdated or inexisting infrastructure at the level of SMEs or the insufficient and unpredictable cash flow, the optimum instruments which were identified were the loans (risk-sharing funding instrument) and the equity. investments. The ex-ante evaluation recommends as financial instruments the collaterals and micro-loans for the low unemployment rate, non-developed entrepreneurial culture and limited access to funding.
The relationship between the developed stage of the business and the adequate financial instruments was also assessed and the results of this analysis are reflected when choosing the instruments which shall be utilized within each Operational Program.
The seed and early-stage capital investment funds financed from the Competitiveness Operational Program, the micro-loans and collaterals for enterprises just starting their business funded from the OP Human Capital are recommended for the initial business development stage.
For the development stage of the enterprises the recommendation is to use risk-sharing loans, funded through the Competitiveness OP and the Regional OP and the equity investment funds funded through the Regional OP.
A benefit of the financial instruments is that of attracting private funding or funding from other public sources, including international financial institutions. At the same time, these can ensure quantitative added value due to the multiplication effect, calculated as ratio between the amount of total funding granted to SMEs and the contribution of the operational programs. The estimated multiplication effect is of 2.31 for the financial instruments managed in Romania and of 2.65, if we also take into account the amount allocated to the Operational Program Initiative for SMEs.