Government to Support Starting and Expanding Enterprises2012. február 17.
The NDA’s website has launched social consultation about the drafts of the tenders called New Széchenyi Venture Capital Programs. The partnership subsite www.ujszechenyiterv.gov.hu remains open for comments until 29 January 2012. The aim of the scheme is to improve the chances of micro, small and medium enterprises in their start-up and expansion stages, with headquarters both in Hungary and outside the region of Central Hungary, to stay in the market and develop.
ocial consultation is not only important for civil society and potential applicants, but also greatly promotes the institutional system. During the negotiations, NGOs and professional organizations can be involved as early as the planning period. This is meant to ensure that the goals set out in documents, the individual calls for tenders and their conditions meet real needs as much as possible. The professional organizations acting in a particular area and the potential applicants often have additional knowledge which can help finalize the drafts submitted to social consultation. The Partnership Forum is used to make the comments immediately available on the website and to enable partners to become familiar with each other’s opinions. The consultation is completely open. Specifically, after registration anyone can comment on the drafts. After the consultation period is finished, comments are summarised and forwarded to the competent officials of the managing authorities. By the time calls for tenders are published, what are called planners’ answers are uploaded to the website, including the acceptance of every proposal or the reasons for disagreement where applicable. A total of 665 applications have been submitted to social consultation since 2008, and the number of comments and proposals received is above 5,200.
Concerning refundable grants of the type financial assets within the Economic Development Operational Programme, the New Széchenyi Venture Capital Programmes – “Common Seed Fund Subprogram” and the New Széchenyi Venture Capital Programmes – “Common Growth Fund Subprogram” are open for comments until January 29.
The target audience of the schemes includes venture capital fund managers who will later be available for investment purposes. The tender will aim at the selection of capital fund managers, 4 for “Seed Fund” and 6 for “Growth Fund” with a total budget of HUF 28.5 billion. Every investment will involve at least 30% of private investment funds, providing approximately HUF 12.5 billion, so the 10 fund managers’ investments could result in projects worth nearly HUF 41 billion by the end of 2015.
The aim of the applications is to improve the chances of starting and expanding enterprises to stay in the market and develop. In essence, the scheme is designed to encourage venture capital funds to make investments primarily in support of innovative enterprises which need long-term funding as a key to successful business. Capital shortage hits hardest small and medium enterprises in their start-up and growth stages, because they are hardly ever creditworthy. This calls for subsidised tenders to give enterprises capital funds and for encouraging private investors to participate in financing. By capital investment, venture capital funds acquire a share in enterprises, but fund managers usually do more than providing capital: they also take part in the management of the affected enterprises. The duration of venture capital investments is normally 3-7 years. Afterwards, investment fund managers withdraw from the enterprise by selling their shares.
Source: NDA