1 / 26

ES Fund/TISE Loan Fund for Social Economy Case study

ES Fund/TISE Loan Fund for Social Economy Case study. Warszawa, April 10th, 2014. Content :. About TISE Social economy in Poland ESFund /TISE – pilot project Conclusions and recommendations. About TISE. TISE = Social and Economic Investment Company

talia
Download Presentation

ES Fund/TISE Loan Fund for Social Economy Case study

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ES Fund/TISE Loan Fund for SocialEconomyCasestudy Warszawa, April 10th, 2014

  2. Content: About TISE Socialeconomyin Poland ESFund/TISE – pilot project Conclusions and recommendations

  3. About TISE TISE= Social and Economic Investment Company Establishedin 1991 to supportthe development of theentrepreneurship and thecivilsocietyin Poland Since 2002 – member of theFEBEA (European Federation of Ethical and Alternative Banks) Since 2008 - operates as a loan fund for thesocialeconomyand micro and SMEs, 100% subsidiary company of theFrenchco-operative bank CréditCoopératif(social finance leadinginstitutionin Europe)

  4. WhyTISE? Over 20 yearsexperianceincooperationwiththesocialeconomyentities, micro and SMEs and infinancingthesociallybeneficialinitiatives Wideknowledge of thesectors and theirsneeds Expertiseinproviding financial services (venture capital, guarantees, loans) Offeringadvisory services to thesocialeconomyentities and SMEs

  5. TISE’sfields of activity: • Ownregularlendingactivity forsocialeconomyentities and micro and SMEs • Financial intermediary of theloan fund for socialeconomy – (ES Fund/TISE) as well as and of Jeremie and theOperationalProgramme for the Development of Eastern Poland (PO RPW) for micro and SMEs • Service provider for CoopEst

  6. TISE’skeynumbers: Total balancesheet as of 31/03/2014 - PLN 136 M (approximately EUR 32 M) TISE for the SE abroad: 21 loans for thetotalamount of EUR 1,1 M inHungary, Slovakia, Slovenia, Romania

  7. SocialeconomysectorSE entities non-governmental institutions (over 76,000 entities, including 7 667 public benefit organizations) socialcooperatives(~800) cooperatives of the disabled and the blind(~ 300) cooperatives of employees (~ 600 ) ZAZ (Vocational Training Center, 68), WTZ (Occupational Therapy Workshop, 684) other institutions such as: associations of local governments, ecclesiastical legal persons and organizational units running public benefit activity, limited liability and joint stock companies sport clubs operating as non-profit companies

  8. SocialeconomysectorSE supportingentities Public administrationbodies– MIR (Ministry of Infrastructure and Development) and MPiPS (Ministry of Labour and Social Policy) Regional and localadministrationauthorities (i.e. Warsaw, Katowice) Supportingspecializedentitieswith no legal personality: OWES (Social economy support centers) , CES (Social economy centers), KCES (National Centre for Social Economy), SKES (SocialEconomy Permanent Conference) institutions of social assistance and social integration with no legal personality including: CIS (Social Integration Centers, currently 92 operating entities), KIS (Social Integration Clubs, 286), National Association of Social Cooperatives Loanproviders(PAFPIO, TISE, MFES, Regionalloanfunds – Kujawsko-pomorski, Dolnośląski, Pasłęk, Nida, etc)

  9. Selectedproblemsof thesocialeconomyin Poland Act on Social Enterprise Pact for theSocialEconomy National Program of Social Economy Development (KPRES) legal instability supporting system atearlystage of development limited access to externalfinancing

  10. Pilot project- origins 2008 – establishment of an expert team workingon system solutions in the field of social economy. July2012 - financing agreement between the Ministry of Labour and Social Policy (Intermediate Institution) and BGK (state-owned bank - Systemic Beneficiary) chosen to carry out the project. In September 2013 BGK invitedbids to selectfinancial intermediaries responsible for providing services directly to the social economy entities in five macro-regions* covering the whole country. The tender consisted of 5 parts (1 part = 1 macroregion). * Definded by theexpert team based on number of existingNGOs and socialcooperatives

  11. Pilot project- origins Thepotential financial intermediarieswereobliged to: grant a minimum number of loans and provideadvisory services to a minimum number of socialeconomyentities (thelimitswerefixed for eachmacroregionseperately) In all 5 macroregions 14 offersweremade by 9 institutions and consortia Criteriaineach part of the tender were: Business plan assessment – 55% Fund management cost – 38% Advisory service cost – 7% BGK hasselected TISE to performthetaskinall 5 macroregions In January 2013 BGK signed five agreements with TISE

  12. Pilot project - objectives • Grantingatleast251loans by 30/06/2015 for themaximumtotalamount of PLN 25 M; projectdeadline – December 2020; • Providingadvisory services to atleast200socialeconomyentities by 30/09/2015; intotal 4 000 hrs, totalvalue of the de minimisaid – PLN 400 K; • Creating minimum 50jobs; • Assessingthe financial situation of the social enterprises basedon the group of financed and rejected clients; • Determining the financial needs of the social economy entities; • Checking in practice the risk assessment methodologydesigned for the sectorproposed by BGK.

  13. Pilot project– specialfeatures • Preferential conditions (interest rate 25% or 50% of therediscountrate, no charges, no commision, no extra fees); • For socialeconomyentiitesrunning business activity; • Freecounselingafterloangranting. • Regional distribution (five macro-regions corresponding to the areas of operation of five Social Economy Centres);

  14. Pilot project - regionaldistribution

  15. Pilot project • - fixedparameters

  16. Pilot project • - parties Mentors Counselors

  17. Pilot project - beneficiaries Entitiesplanning to developtheirbusinesses aiming to achieve an income or employment growth; Micro or small enterprises; Registered and engaged in economic activities for at least 12 months at the date of loan application; Organized in the form of: Cooperatives of employees, Cooperatives of the disabled and the blind, Social cooperatives, NGOs, Ecclesiastical legal persons or organizational units carrying out public benefit activities, Non-profit joint-stock companies, limited liability companies and sports clubs.

  18. Pilot project - process Assistance in loan applicationspreparation Directcontactwiththe SE entities Use of theexisting support networks Local partners and TISE advisers Advisory services for theborrowersto ensure sustainable operation of the SE entities One analysis center Ensuring uniform standards of assessment

  19. ESFund/TISE – applicationverification and assessment • Main financial parameterstakenintoaccount: • cash flows, • EBITDA /debt repayment, • debt ratio, • return on sales ratio, • fixed assets to fixed capital ratio. Riskassessmentisbased on themethodologyprovided by BGK under the tender and consists of: 1. Formalverification; 2. Evaluation of the profitability of the project (business plan, financial projections); 3. Examination of the creditworthiness of the entity (financial data); 4. Evaluation of securities (a blank promissory note with a promissory note declarationis a minimalrequired security).

  20. ESFund/TISE performance as of March 31st, 2014 Usedallocation as of 31/03/2014 • FromMarch 2013 tillMarch 2014: • 115loansgranted for thetotalamount of over10,1 M PLN (40% use of funds); • 115business activity development have been implemented; • 156declaredjobsto be created and sustained; • 2.196 hrsdeclaredinterestinadvisory services;

  21. ES Fund / TISE – pilot projecttime schedule Loansgranting Providingadvisory services Possibleextention of theloangranting period Portfolio monitoring and projectsettlement 03/2013 30/06/2015 30/09/201520172020

  22. ESFund/TISE performance as of March 31st, 2014 By branches:

  23. ES Fund / TISE performance as of March 31st, 2014 By entities

  24. ES Fund / TISE – pilot projecteffectivenessparameters • Use of funds – 100% by 30/06/2015, atleast 125% by 2017 • Overdue and lostloansratio – 15% as of 31/12/2017 • Number of loansgranted – 250 by 30/06/2015 and atleast • ~ 380 by 31/12/2017

  25. ES Fund / TISE – observationsafteryear one • Low maximum loan amount ; • Fixedmaximummaturity; • Only investment and jobcreationpurposecan be financed - no possibility to use a loan for working capital ; • Unavailability for SE entitiesemploying more than 50 employees - exclusion of many workers' cooperatives and cooperativesof thedisabled and blind; • Unavailability for entities with no legal personality i.e. ZAZ (Vocational Training Center); • Unavailability for start-ups

  26. Financingneedsof thePolishsocialeconomyentities • Widerrange of financial products: • Working capital and liquidityloans; • Investment and development fiancing; • Quasi capital – social VC, subordinateloans, mezzanine; • Biggeramounts • Longerfinancing period • Availablealso for: start-ups, enterprises employingmorethan 50 employees, • Financial participation of the financial intermediaries

More Related