Swiss Contribution: Venture Capital Fund for supporting Small and Medium-sized Enterprises23 March 2011
Balázs Simó, Head of the Managing Authority for International Cooperation Programmes of the National Development Agency and Christian Mühlethaler, Ambassador of the Swiss Confederation to Hungary signed a project agreement on 21 March 2011 amounting to CHF 15.2 million (more than HUF 3 billion) on opening funds to small and medium-sized enterprises. The project provides long-term financing for SMEs and indirectly supports creation of new jobs.
Small and medium-sized enterprises play a key role in the economy and the society both in Hungary and elsewhere in the world. Although SMEs employ nearly 70% of the workforce in Hungary, their access to long-term or own capital is rather limited.
Through the Swiss Fund (IV Euroventures Venture Capital Fund) the Swiss Confederation contributes with CHF 15.2 million to developments carried out in Hungary with the cooperation of the state and private investors. The aim is to provide enterprises with limited access to loans, capital and guarantees from the market. Better access to financial sources for small and medium-sized enterprises is stimulated by special financing schemes customized for SMEs.
Through capital leverage more enterprises can be helped using available funds, and the targeted scheme ensures that more adequate companies will have access to the repayable loans.
A minimum of 30% of the capital is provided by private investors, whose participation is encouraged by the fact that the venture capital share is provided by the state.
The project provides long-term financing for innovative and growth oriented companies, resulting in the creation of numerous new jobs and dynamic trade partners with growing purchasing power. These goals are in line with the Hungarian Government’s strategy for supporting SMEs, while the new market created through the project can be an advantage for Switzerland as well.