1. Hungarian SME policy – Development after EU accession Tamás Leskó, Hungary

2. SMEs in Hungary The SMEs influence significantly the competitiveness of the Hungarian economy: –99,9% of the total number of enterprises are SMEs –872 000 SMEs operating (December 2004) –SMEs employ more than 74% of employees employed in the private sector –The contribution to the Gross Added Value of the SME sector is approximately 50% –Their share of export is 36%

3. SME development policy before EU accession Act on small and medium-sized enterprises and the promotion of their development Phare programmes –Micro Credit Programme –Promoting the co-operation among SMEs –Introducing e-business to SMEs National grant programmes –Investments –EU preparation –Interest subsidies

4. Grants for SMEs Number of assisted SMEs The amount of subsidy (EUR million) 20012 404106,1 20021 01243,4 20034 85148,0 Total8 267197,5 SME development policy before EU accession

5. „The EU at your doorstep” –473 presentations –In 118 sub-regions (NUTS IV) of 14 counties –13 500 SMEs took part Industrial parks –179 business parks from 1996 to 2005 – 2 500 enterprises SME development policy before EU accession

6. New SME definition Reducing administrative burdens − Simplified Tax for Entrepreneurs − Simplified business registration − Contract samples Introducing tax allowances and reducing tax rate − Tax rate of personal income tax and corporation tax was reduced from 18% to 16% − Tax allowances to encourage investments by SMEs SME development policy after EU accession

7. EU Structural Funds in SME development Number of assisted SMEs The amount of subsidy (EUR million) 20044 01094,1 20052 50441,1 Total6 514135,2 Economic Competitiveness Operational Programme

8. Financial programmes Credit programmes –Financing investment –Financing working capital Factoring programme –Subsidised interest to spread factoring among SMEs Credit guarantees –67 thousand SMEs, EUR 2150 million (2003-2005) Venture capital

9. Credit programmes Name of Construction Amount of credit (EUR) Duration (year) Micro Creditmax 25.000max 8 Midi Creditmax 100.000generally 6 SME Credit for a Successful Hungary 20.000- 4.000.000max 15 Széchenyi Cardmax 40.0001

10. Promoting entrepreneurial culture Calls for application for gipsy (roma) entrepreneurs –Special consultancy –State aid for purchasing machinery Providing information –On EU requirements –Specific publications Student programmes

11. Education of entrepreneurship Student enterprises Education for primary and secondary school pupils Fairs of student enterprises Competition of students on entrepreneurial skills „Job Shadow” programme Conferences for students Conferences for teachers

12. New Directions in the Hungarian Enterprise Development Policy New principles in enterprise development policy –Functional Approach –Sustainability –Institutional Development, Capacity Building –Co-ordination Based on Market Mechanisms For the period of 2007–2013 a new micro-financing system to be set up through EIF’s JEREMIE mechanism

13. Thank you for your kind attention! Mr. Tamás LESKÓ Deputy Head of Department Department for SME Development Ministry of Economy and Transport, Hungary lesko.tamas@gkm.gov.hu