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The Future of SME Finance
Gerhard HuemerUEAPME Director Economic and Fiscal Policy
3rd SME Summit
Luxemburg, April 23, 2004
Introduction
economic restructuring and innovation
=> needs investment
better qualification and developing new markets
=> needs investment
creation of more and better jobs
=> needs investment
SMEs are ready to invest, but
access to finance – main complain of SMEs
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Changes in the Finance sector
globalisation and internationalisation
mergers and restructuring
economic situation of some finance companies
Basel II
new State Aide rules
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Changes in Finance Sector results
in higher risk awareness of banks
the introduction of rating systems
the loss of personnel relations between
SME owner and decision-maker in banks
decrease of transparency for SMEs
higher costs due to previous losses and
higher administrative burdens
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SMEs have to face
the introduction Basel II
new obligations resulting from rating
higher credit costs
loss of personal contacts – soft factors
all of them endanger access to finance
and increase the uncertainty of SMEs
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Policy actions are required
to make credits and loans for SMEs available
to reduced the administrative costs or Basel II
for small / SME banks
to strengthen the capacity of SME to build risk capital
to increase the availability of external risk capital
for SMEs
to strengthen the confidence of SMEs
regarding access to finance
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UEAPME activities
Basel II consultation process with
Basel Committee, Commission and Parliament
Basel II dissemination conferences
extending the credit guaranty schemes
increase the transparency of risk assessment
and rating systems – Code of Conduct
to strengthen the confidence of SMEs
regarding access to finance
elaboration a comprehensive approach
for a better Future in SME finance
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Open list of proposed policy measures
SME friendly implementation of Basel II
=> administrative burdens for smaller Banks
=> partial use of the IRB approach
extension of credit guaranty schemes for SME credits
and SME portfolios
ensuring the transparency of rating systems
=> SMEs should not be confronted with a „Black Box“
tax reforms to allow SMEs to build-up risk capital
establishment of a market for SME venture capital
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