JEREMIE - Activity overview

JEREMIE’s resources are mainly derived from EU Structural Funds for the funding period 2007-2013, the monies issued by the European Commission to EU Member States and their Regions for SMEs. National and regional Managing authorities of the EU Member States may opt to participate in JEREMIE. Managing authorities may also decide on JEREMIE terms such as the investment strategy and related financial instruments, amount of funds available or the selection of the financial institution managing JEREMIE actions.

JEREMIE is not an institution but a process made available for EU Member States through the EU Cohesion Policy, and managed by selected financial institutions such as EIF.

A sustainable tool to support SME finance

Traditionally, monies from EU Structural Funds have essentially been spent as grants, which are issued as one-off payments on a project basis. The JEREMIE initiative offers new opportunities for Member States and Regions to invest and re-invest Structural Funds using a range of financial instruments, instead of grants. Investment and re-investment opportunities through JEREMIE mean that funds are used to maximum advantage, gaining additional value, or leverage, and also that funds can be used over a longer period for the benefit of SMEs. 

JEREMIE's financial instruments draw on the EIB Group’s expertise in SME finance, notably guarantees, venture capital, securitisation and loans. JEREMIE financial products will operate on market terms to encourage the participation of private as well as public financial institutions, which is of key importance.

A flexible set of financial tools

JEREMIE provides for a range of financial tools to obtain the most appropriate allocation of funds in order to match supply and demand for SME finance at national or regional level.The intiative allows for prudent initial funding contributions by national and regional authorities with opportunity to increase funding allocation at a later date. Adapting financial tools during the cycle of implementation is also foreseen, allowing responsiveness to market conditions. JEREMIE therefore provides Member States and Regions with a tailor-made set of financial tools, formulated to be optimally applied in each setting.

Preparation for JEREMIE actions

The EC’s Directorate General for Regional Policy (DG Regio) instructed EIF, as the EU's specialist financial institution for SME finance, to study the situation.

Since 2006, EIF evaluated the gaps between the potential demand for non-grant financial debt and equity instruments in support of SMEs and existing supply capacity of local financial intermediaries, such as banks and venture capital funds to prepare the grounds for the JEREMIE initiative. So far, EIF worked on some 30 demand-supply gap evaluations for Member States and regional authorities that had expressed an interest in the JEREMIE initiative.

 Implementation of JEREMIE actions

On the basis of EIF’s evaluations of market gaps, Managing Authorities from Member States and Regions may opt to use their Structural Fund allocations for the funding period 2007 to 2013 to implement SME finance actions through the JEREMIE initiative. This implementation phase of JEREMIE began in 2007 and will run until 2013.   

Member States and Regions opting to participate in JEREMIE financial actions place part of their EU-allocated Structural Funds in a dedicated fund (a JEREMIE holding fund). These monies invested into a JEREMIE holding fund to be used in a range of possible financial instruments for SMEs enabled by and coordinated through the JEREMIE initiative. To participate in the JEREMIE initiative, Member States and Regions must enter into a formal process which is described below.

 Organisational structure of JEREMIE actions 

Managing Authority
The national or regional authority responsible for managing the Member State or Region’s Structural Funds allocations, known as the Managing Authority, must opt to participate in the JEREMIE initiative.

Holding Fund
The Managing Authority then establishes a Holding Fund for the Structural Fund monies earmarked for utilisation under the JEREMIE initiative and appoints a Fund Manager (e.g. EIF). The Holding Fund acts as a fund-of-funds. The cooperation between the Managing Authority and the Fund Holder is governed by a Funding Agreement which, for example, defines the type of cooperation and the operational modalities of the fund holder in implementing the instruments.

The Holding Fund’s responsibilities include the selection of local financial intermediaries for the different financial instruments through calls for expression of interest and monitoring the use of funds by financial intermediaries and by beneficiary SMEs.

The Holding Fund may be governed by a JEREMIE Investment Board, operating on a national or regional level, which is comprised of representatives of the Managing Authority (or Authorities) and other national and regional bodies involved in SME finance, as considered appropriate by the Managing Authority.

The Holding Fund acts on the basis of an Investment Strategy and Business Plan for the implementation of the JEREMIE funds. Upon the plan’s approval by the JEREMIE Investment Board, the EU Structural Fund allocation will be contributed into the Holding Fund.

Financial intermediaries
With funds available, the Holding Fund opens an open call for expression of interest to identify possible beneficiary financial institutions specialised in SME finance on the basis of the JEREMIE holding fund investment strategy. JEREMIE foresees a wide spectrum of SME financial institutions to become intermediaries such as SME finance operators, venture capital funds, loan funds, technology transfer vehicles, micro finance providers, banks, and guarantee funds.

JEREMIE financial intermediaries may provide SME-focussed financial instruments including guarantees, co-guarantees and counter-guarantees, equity guarantees, (micro) loans, securitisation, venture capital, Business Angel Matching Funds, and investments into Technology Transfer funds.

Small businesses
SMEs are the final beneficiaries and may obtain funding directly from EIF partner financial institutions. JEREMIE funds are not issued directly to small businesses (SMEs). SMEs should therefore not apply to EIF or the EC for financial support. In due course, SMEs interested in obtaining finance will be able to identify and contact financial intermediaries in their countries based on information provided in this website as soon as the JEREMIE initiative becomes active in Member States and Regions. Please visit the Access to Finance website for information about sources of finance backed by the European Union.