The Jeremie Program is an efficient means for developing domestic SMEs, said János Fónagy, Parliamentary State Secretary of the Ministry of National Development, at a conference on EU funds for SME development, held in Budapest on Thursday.

At the conference jointly held by Venture Finance Hungary Plc. and the Századvég Foundation, the State Secretary explained that the majority of employees work for micro, small and medium sized enterprises worldwide, including Hungary. At the same time, a considerable portion of the GDP is generated by the mostly foreign owned big companies, which also account for the greatest part of export.

It has been a priority for the successive governments of Hungary to stabilise the production of domestic businesses, increase their productivity and competitiveness, and to assist them in offering their products and services in both domestic and foreign markets, Mr Fónagy added.

The State Secretary pointed out that the current Government, which took office in 2010, was convinced that the key to economic growth were strong and independent small enterprises capable of creating jobs. He recalled that the Government has taken a number of measures to raise the profitability of enterprises, including the reduction of the corporate tax from 19 to 10 percent up to a tax base of HUF 500 million. This enabled companies to spend tens of billions of forints retained on innovation, development and wage increases. In addition, the strategic agreements signed with big companies are also favourable for small enterprises by extending supplier opportunities, he mentioned. The Government strove to draft the agreements by including a provision on the increased contribution of Hungarian suppliers as far as possible.

The State Secretary said the Hungarian economy has entered a period of strategic partnerships, where the State and investors as well as the latter and Hungarian SMEs regard each other as strategic partners and develop mutual long-term business relationships.

As János Fónagy noticed, the Government takes the view that empowering SMEs is the best way to enhance the national middle class. These social groups bear the biggest burden which is why they need to be reinforced through various decisions by the Government and the competent policy-makers.

With reference to the European Union’s program launched to promote small enterprises, Tamás Karsai, Director General of the National Development Agency, said they moved towards refundable aids in the current financial period. They include the Jeremie Program, which provides credit, guarantees and venture capital to SMEs. It basically supports micro and small enterprises that are creditworthy but cannot expect bank funding due to their size.

The program’s Hungarian fund manager is Venture Finance Hungary Plc., which delivers the aid to enterprises via financial mediators. Balázs Garamvölgyi, Deputy CEO for Business of Venture Finance Hungary Plc., explained that the organisation has so far delivered approximately HUF 210 billion of all refundable aids within the program to more than 16 thousand enterprises. The number of financial mediators hired under the program exceeds 150.

(MTI)