JEREMIE - Activity overview

The Joint European Resources for Micro to Medium Enterprises initiative, known by the acronym JEREMIE, is an initiative of the European Commission’s Directorate General for Regional Policy (DG Regio) and the EIB Group (European Investment Fund and European Investment Bank) to enhance SME finance.

JEREMIE offers EU Member States, through their national and regional Managing Authorities, the opportunity to use part of their EU Structural Fund allocation to indirectly finance SMEs,through financial intermediaries, by means of equity, loans or guarantees, through revolving Holding Funds.In accordance with the structural funds regulations, these Holding Funds can be managed either by the EIF or national institutions.

EIF partnered with the European Commission, represented by DG REGIO, in 2006 to prepare the ground for this initiative and that partnership remains strong today. The first steps of the initiative included assessing the demand for SME financial instruments in regions and Member States (evaluation studies), assisting Managing Authorities in the programming phase of the cohesion policy and advising interested Managing Authorities on practical arrangements for the implementation of these JEREMIE funds.

By end 2008, EIF finalised 53 national and regional evaluation studies, marking the end of the evaluation and preparatory phase of the initiative.

The main JEREMIE benefits are:

•   Flexibility: Contributions from the Operational Programmes to the JEREMIE Holding Fund will be eligible for interim up-front payments by EU Structural Funds, giving Managing Authorities more flexibility in allocating these resources. Structural Fund contributions to the Holding Funds must be invested in SMEs by 2015.

•   Benefits of a portfolio approach: The Holding Fund will be able to re allocate the resources to one or more financial products in a flexible way, depending on the actual demand over time. The umbrella fund approach will allow a diversification of risks and expected returns due to financial products having different default rates, as well as active cash flow management to allow for a swift response to changing market requirements.

•   Recycling of funds: The Holding Fund is of a revolving nature, receiving repayments from the financial intermediaries for further investments in the SME sector. This makes SME support via EU Structural Funds sustainable, unlike the pure grant approach.

•   Leverage: A significant implied advantage of JEREMIE is its potential ability to engage the financial sector either at the Holding Fund level, with additional capital from financial institutions, or at the level of financial instruments, through co financing, e.g. in both cases potentially in cooperation with the EIB.

EIF's expertise as a Holding Fund manager can be of particular added value in the lesser developed regions/Member States, where there is a need for capacity building initiatives and transfer of know how between local institutions and EIF. In those regions where JEREMIE is managed by another body, EIF can also be involved as an adviser, for a wide range of services such as cash flow management of Holding Funds, structure of Holding Funds, product design in line with European Regional Development Fund regulation, reporting and monitoring, corporate governance due diligence/second opinions, setting up of financial vehicles, etc.

The JEREMIE Holding Funds, managed by EIF, will provide a wide range of financial instruments for SMEs, such as microcredit, guarantees, venture capital and equity‑type instruments, or export‑credit insurance. Read more on JEREMIE financial tools