Promoting self-employment and enterpreneurship from ESF through JEREMIE initiative LT practice 2010-04-20 ESF TWG, Bruges

Background Consequences of financial crisis: Unemployment rate 13% Downturn more than 10% GDP Narrowed access to finances (high risk and interest rates) Only training, consultation, orientation activities were not sufficient to enhance employment  triggered to search for new interventions to create more jobs and enhance enterpreneurship

Intervention scheme Targets: To enhance self employment and start ups as a sustainable way to keep people active in business and labour market To reach economically inactive people in distressed areas To make intervention attractive, but “in touch with reality” (offer some additional incentives) Key elements of intervention: Provide micro credit for start ups combined with consulting One-stop-shop principle applied Additional incentives to promote instrument and encourage self employment and start-ups

Intervention scheme - facts Established “Enterpreneurship fund”, portfolio – 14 mln. Euro Ceilings of loan (up to 90%) – up to 25 000 Euro (micro credit) for start up Project duration (repayment period) – 3-5 years Loans provided under “De minimis” scheme (also applies for eligibility of activities) Indicators Jobs created – 1000 Number of individuals/ ME/ SME received loans 1200

Social aspects of intervention Promotion of social target groups: Unemployed Disabled Youth under 29 years old Persons over 50 years old Star-ups in most distressed regions and regional centers Who can apply for micro credit: Individuals working with business licence, SME’s not older than year.

Implementation phases Promotion phase Assessment of skills and needs Trainings (advanced or basic) Consultation on preparation of Business Plans Micro credits Mentoring

ESF JEREMIE scheme

What makes it attractive? Type of aid Max amount Loan (loan will cover up to 90% of the total costs of the business project) Up to 25 000 Euro Interest rate rebate Not more than 5% of interest rate State guarantee No need for deposit Additional incentives for maintaining workplace at least 2 years For priority groups up to 30% repayment or up to 870 Euro per project For all other groups – up to 27% repayment or up to 783 Euro per project

Key challenges Reach and encourage economically inactive people Risk for demand of micro credit Ensure quality of trainings and assessment of needs Make the intervention attractive and realistic at the same time Too many additional incentives could lead to not market based conditions

Thank you for your attention! Ramunas Dilba Ministry of Finance of the Republic of Lithuania Operational Programmes Management Department Human Resource Development Operational Programme Management Division J.Tumo-Vaižganto str. 8a/2, LT-01512, Vilnius Phone: +370 5 219 44 37, Fax: +370 5 219 44 65 r.dilba@finmin.lt, www.finmin.lt