FINANCING OF SMEs IN EUROPE "CHAMPAGNE ARDENNE ENTREPRENDRE" AN EXAMPLE OF PUBLIC/PRIVATE PARTNERSHIP FOR SME FINANCING BUDAPEST, 21st MARCH 2007

GENERAL OBSERVATIONS Difficulties for SMEs to access financial assistance Shortage of corporate equity capital Insufficient "SME risk" factoring by banks Insufficient business support services and follow-up

OBSERVATIONS RELATIVE TO CHAMPAGNE-ARDENNE Corporate demography below the national average : rate of businesses created/10,000 inhabitants : 71 Champagne-Ardenne 84 France Public and private Research & Development play an extremely minor role (1% of France's total) Need to strengthen bonds between the economic fabric and the university community

FINANCIAL ENGINEERING ADAPTED TO SMEs Guarantee funds for bank lending amounting to 70 % (equity capital, creation, transfer, innovation) Regional venture capital (€4.5 million) and development capital (€10 million) firms Support for project sponsors

Presentation of de CHAMPAGNE-ARDENNE ENTREPRENDRE

Objective : "create employers" Core target : the future SME (project with potential) Business leaders who are personally involved Coaching provided for two to three years - fitting into an exchange-driven enrichment dynamic - individual : each creator coached by a member business leader - group : monthly club gathering of a dozen creators Loans on trust, granted to creators individually, from €15,000 to €45,000 SPECIFIC ASPECTS

THE ENTREPRENDRE NETWORK CONCEPT Validate creation projects Send out to the creator an "echo", which helps him to build his project better Grant loans on trust, without interest or collateral Contribute to funding and its leverage effect Facilitate integration into the local economic fabric Insert the company created into economic life more quickly Provide coaching on a monthly basis for two years "Train" the new business leader in his trade through experience sharing

AN EFFECTIVE METHOD Better sustainability and productiveness of future SMEs The coaching effect improves the chances of success Leverage of the loan on trust Successful creators mobilise bank loans more easily Solidarity among business leaders The creator receives objective personalised advice and brain power

SOME KEY FIGURES 35 associations throughout the region 385 new SMEs supported in 2006 (€9 million) or 3,300 jobs in 3 years and 5,200 in 5 years 2,500 committed business leaders More than 2,000 business creators Nearly 20,000 jobs generated since 1986 A total of €45 million in loans on trust granted Continuation rate of 85 % in 3 years and 75 % in 5 years

ECONOMIC ASSESSMENT Creation of businesses in Champagne-Ardenne by staff size level in 2005 The target (business of 3 employees or more) represents more than a hundred businesses out of a total of 2,940, i.e. 4%.

Projects First contact Contact – Opinion Project enrichment Validation Expertise Outside organisations Hiring Committee Loan on trust Coaching Creators club Network introduction Involvement of members Advising Administration

Positioning of Champagne-Ardenne Entreprendre in relation to the other support structures

67 Regular members, including 5 bank partners The support of the Region, the Caisse des Dépôts (Government Deposit and Consignment Office), and our bank partners for the funding for loans on trust 10 Hiring Committees : ► 13 projects and 18 award winners supported €360,000 in Loans on Trust distributed Already more than 100 jobs created and/or saved Already 19 Successful award winners Clubs and 13 Individual Coaching Plans in place 2005 OVERVIEW