THE FUND UNION PROGRAM OFFERS A FINANCIAL SOLUTION

Garantiqa Hitelgarancia Zrt. (Garantiqa), The Hungarian Chamber of Commerce and Industry (MKIK) and KA-VOSZ Zrt (founded by MKIK and The National Organisation of Entrepreneurs and Employers - VOSZ) are starting up a one-stop-shop complex financial service for micro-, small- and medium size enterprises by the name of Fund Union Program. This was announced by the involved organisations at a press conference held together with Finance Minister János Veres. "This is not a crisis management program, but it contributes to the dynamisation of the SME sector, which has been revalued in the current situation" - said the minister.

Garantiqa Hitelgarancia Zrt., MKIK and KA-VOSZ Zrt (owned by VOSZ) are starting up a one-stop-shop financial service by the name of Fund Union Program to help the construction of the different financing forms of capital and credit, to raise their mutually strengthening effect and eventually to be able to call the EU funds in an effective way. Within the framework of the program, an SME-supporting consulting network examines the plans and funding needs of the entrepreneurs, develops the best financing structure for the implementation, helps finding the funding partners and the preparation of the suitable EU tenders. The entrepreneurs are led by the hand via a one-stop-shop service towards the signing of the contracts, and Garantiqa's surety guarantee stands behind every funding. All this was announced today by Finance Minister János Veres, Chief Executive Officer György Radnai, VOSZ Managing President Sándor Demján, MKIK President László Parragh and KA-VOSZ Zrt. Chief Executive Officer László Krisán at the joint press conference in the Ministry of Finance.

According to János Veres, it's not about a crisis management program, but the initiative contributes to the dynamisation of the SME sector: "The government considers the preservation of stability as its most important task in the current situation, but cannot overlook the securing of progress for Hungarian enterprises. The Fund Union Program is an initiative which, in time, can help the domestic small- and medium size sector in realising its best visions to a great extent" - said János Veres.

KA-VOSZ Zrt. is founding a financial service company in cooperation with Garantiqa Pont Consulting Ltd. (Garantiqa Pont Tanácsadó Zrt.), which, together with nation-wide chamber- and VOSZ networks run by KA-VOSZ is contributing to the success of the program - announced Sándor Demján. The local offices will also function as customer service offices of the Fund Union Program, the direct contact with the entrepreneurs will be realised through these offices.

If the enterprise needs a loan, capital investment, or even EU-tender advising, the professional consultants of Garantiqa Pont work out the suitable proportion of the financing forms, locate the funding partners (banks and risk capital investors), and manage the case until the signing of the contract or the submission of EU tenders. Whether it is about capital, loans or even EU subsidies, the guarantee of Garantiqa stands behind every resource part which decreases the risk of the financers, thereby improving the chances for SMEs to obtain the necessary funds - said György Radnai.

"The SME sector is in trouble, and if the credit crisis spreads any further, the problems can get even bigger" - said dr. László Parragh, MKIK President at the press conference. The President promised that the program will be introduced to the highest possible number of involved parties in the sector, since it is important to know that a company with an equity of 50 million HUF can also implement developments for a cost that is several times higher than its own capital.

László Krisán announced at the press conference that the common financial consulting organisation of KA-VOSZ and Garantiqa enters the market with a new product: the investment loan, built on the Széchenyi Card, as a combination of JEREMIE-funded and Hungarian Development Bank (MFB) loans, with the support of the Ministry for National Development and Economy (NFGM). The reliable entrepreneurs with a Széchenyi Card can request a loan with low interest rate, with a 10 year duration, even without a realty cover. To make this possible, we must continue believing in the entrepreneurs and we must create a loan which is not only inexpensive but also quickly and easily accessible. The new loan type can be requested at the local chamber and VOSZ offices (just as the Széchenyi Card), expectedly from the spring of 2009.

So far, two organisations have been created in order to make the Fund Union Program work. Garantiqa Risk Capital Management Ltd. (Garantiqa Kockázati Tőkealap-kezelő Zrt). was founded in August, with a 50 million HUF subscribed capital. The company has already been approved by the Hungarian Financial Supervisory Authority (PSZÁF). The activity of the company is capital management and other supplementary financial activities, the Chief Executive Officer is László Blága. The organisation also acts as an investor in promising enterprises. Garantiqa Pont Tanácsadó Zrt. was founded in September with a 125 million HUF subscribed capital, its activity is business- and management consulting. The Chief Executive Officer is Péter Csillik. The common financial service provider of Garantiqa and KA-VOSZ is awaiting registration.

Background:
Between 2005-2007, Garantiqa Hitelgarancia Zrt. helped the loan uptake of appr. 26.000 small- and medium size enterprises in a value of nearly 400 billion HUF. Using this possibility, the beneficiary not only brings other enterprises to a beneficial position, but also, by developments, raising employment level and thereby indirectly raising consumption, generates several hundred billion HUF tax income. During this time, the budget only paid out a little more than 10 billion HUF to counter-guarantee Garantiqa. The numbers obviously show that guarantee issuance is an effective way of SME subsidy, since a significant credit- and guarantee amount can be moved in a market-conform way at a low state cost, making it possible to realise a large tax income. The expansion of guarantees also contributes to the preservation of the financial stability of enterprises in debt, and to the realisation of their developments and investments.

KA-VOSZ Zrt. was co-founded by VOSZ and MKIK with the goal to help micro-, small- and medium size enterprises in liquidity difficulty to loans with beneficial conditions without bureaucracy, using new financial products. KA-VOSZ operates and develops the Széchenyi Card since 2002, and by giving totally 550 billion HUF current asset loans to 100.000 enterprises in 6 years, it has contributed to the development of the economy and the aid of small enterprises.
 
The characteristics of the Széchenyi Card 2 scheme are as follows:
• Increased tenor from 1 year to 2 years,
• can be obtained within 2 weeks with minimal administration,
• the monthly interest rate is below 1%,
• the access to loans is still supported by state interest and guarantee fee subsidy,
• the previous quarterly amortization obligation has been removed,
• can be requested in the offices of the local chambers of commerce and industry and VOSZ,
• reachable for every enterprise within 20 km distance, in more than 1.500 bank offices of 900 settlements. 

Thanks to the unique, nationwide network coordinated by KA-VOSZ Zrt., a personal contact can be maintained with the entrepreneurs, since as a first step, the local administrator meets the enterprises and carries out the registration tasks.