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

2

1. EIF at a glance

2. JEREMIE activities

3. JEREMIE MALTA:

� Guarantee instrument

� Preliminary results of the Guarantee

instrument

4. Questions & Answers.

3

Part I:

EIF at a glance

European Investment Fund

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

5

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%)

6

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

7 / 25

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

8

Part II:

JEREMIE activities

Joint European Resources for Micro to Medium Enterprises

9

� 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

10

Up to 31 January 2012

JEREMIE with EIF

11

JEREMIE: current situation

12

JEREMIE : financial intermediaries of EIF

A network of private

organisations to handle Structural

Funds.

A network of private

organisations to handle Structural

Funds.

13

Part III:

JEREMIE MALTA

� Financial Instrument : Guarantee instrument

� Preliminary results of the FI implementation

14

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.

15

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 )

16

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.

17

� 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

18

JEREMIE MALTApreliminary results of the Guarantee Instrument

All the data at 30 April 2012

19

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

20

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

21

Breakdown per SME: maturity and amount

58% SME Loans have a loan maturity above 7 years

75% SME Loans have an amount under 100k

22

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%.

23

Sectors (N°of SME Loans)

24

Sectors (Amount in EUR)

25

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€

26

Lending volume (in EUR million):

27

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.

28

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

29

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.

30

Contact

Aubin BonnetEuropean Investment Fund96, boulevard Adenauer L-2968 Luxembourg

EIFTel.: (+352) 42 66 88 380www.eif.org

JEREMIEwww.eif.org/jeremie