Innovation Finance: Guarantee Mechanisms Luxembourg 7, December 2001

Submitted by Administrator on 22 April, 2010 - 17:10
in
Dec 7 2001
Event Date: 
7 December, 2001 - 17:00
Venue: 
Luxembourg

The funding requirements for small and medium enterprises (SMEs) form the largest and the fastest growing sector of existing and new businesses in the European Union and in the accession candidate states of central Europe. Guarantees for the financing of innovative projects are an interesting mechanism, because it is in this area of activity that obtaining funding is perceived as, and is in fact, the most difficult. This situation is caused by the lack of an historical trading record, the lack of suitable collateral cover in the form of tangible assets and very often the lack of experience or track record by the entrepreneur or project proposer. This situation leads to a failure by traditional funding providers to create and practice a risk assessment regime that takes account of the needs of SMEs operating in an increasingly competitive commercial environment.

The main aim and focus of the workshop was to examine and discuss the issue of guarantees as mechanisms for the advancement of understanding in the practice of risk assessment and how collateral or financial coverage can be developed and better managed across Europe. The goal was to outline and discuss good practices in this area. Thirty-three participants attended the workshop, representing a cross selection of scheme managers and policy makers from across Europe.

The main conclusions of the workshop related to : 1) the need to look closer and consider all proposals for support for innovative projects: ‘innovation is everywhere’ was a term used to clarify this issue; 2 ) the need for active marketing strategies, ranging from the importance of working with banks and other institutional contacts to the identification of attractive and qualifying projects from random contacts and investors; and 3 ) the requirement of a combination of resources both of technical and financial nature. The involvement of an influential mentor was highlighted as a good practice.

Information available for this workshop :

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