JEREMIE - Joint European Resources for Micro to Medium Enterprises

The JEREMIE initiative developed in cooperation with the European Commission, offers EU Member States, through their national or regional Managing Authorities, the opportunity to use part of their EU Structural Funds to finance small and medium-sized enterprises (SMEs) by means of equity, loans or guarantees, through a revolving Holding Fund acting as an umbrella fund.

The JEREMIE Holding Fund can provide to selected financial intermediaries SME-focused financial instruments including guarantees, co-guarantees and counter-guarantees, equity guarantees, (micro) loans, export‑credit insurance, securitisation, venture capital, Business Angel Matching Funds and investments in Technology Transfer funds. 

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. 

The Holding Fund develops an Investment Strategy prior to the signature of a JEREMIE Funding Agreement between the EIF and a national/regional government of an EU Member State. The national/regional counterpart transfers the funds allocated to JEREMIE to a JEREMIE bank account, a call for expression of interest is launched and Financial Intermediaries are selected based on a due diligence process. The decision is taken with the involvement of the Investment Board.

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.

For more information see: http://ec.europa.eu/regional_policy/thefunds/instruments/jeremie_en.cfm

To date EIF has signed eleven agreements with EU Member States and regions, seven of which are with New Member States. This demonstrates a continuing commitment to supporting economic development in these regions.