Extension of the ex-ante avaluation of the EFRE subordinated loan fund

Financial instruments are comparatively new in European cohesion policy. They are becoming increasingly important in the current 2014-2020 programming period. Where they are used, managing authorities, funds and implementing bodies must comply with both current Union and national law. This is particularly true in the context of state aid and public procurement. Therefore, if the financial instruments are used in the ESI funds, an ex-ante evaluation is required. Ex-ante evaluations examine the needs for such an instrument financed from EU and national funds. This includes, among other things, an analysis of market weaknesses or sub-optimal investment situations, the respective investment needs and a possible involvement of the private sector. In addition, the added value of the financing instrument to be used is also analysed.

In Saarland, the programming of the ERDF OP 2014-2020 was aimed at the use of a financial instrument in the form of a subordinated loan fund with the target groups of SMEs in trade and industry, members of the liberal professions and start-ups. The ex-ante evaluation published in November 2016 concluded that the expected demand for subordinated loans will range from € 300,000 to € 500,000. Meanwhile, the previous experience of the Saarland Investment Credit Bank (SIKB), which provides the business services for the fund, shows that the target groups of founders and young companies also have financing needs well below the € 100,000 threshold.

Against this background, the Saarland Ministry of Economics, Labour, Energy and Transport (MWAEV) has commissioned Prognos AG with a short expertise to extend the existing ex-ante evaluation, in particular the investment situation and coherence evaluation.

The market analysis based on secondary statistics shows that
over 80 percent of the founders who use external financing use less than € 100,000 capital.
there is a stable financing requirement for founders also clearly below € 100,000, which is up to a maximum of € 25,000.
in line with the demand for loans from start-ups, the demand for financing for SMEs below € 50,000 in 2016 still accounts for around half of the demand for loans.
in the last four years, financing requirements below € 20,000 have been stable at around 20 per cent for SMEs.
In addition, the coherence analysis points out that instrument competition can largely be ruled out.

Authors: 

Dr. Jan-Philipp Kramer, Moritz Schrapers, Adrian Steinert