Post on 07-May-2015
34th ADFIAP Annual Meeting
April 20 to 23, 2011, North Cyprus “Responding to Global Issues & Trends:The Strategic Role, Resources and Relationships of National Development Finance Institutions”
DFIs and SME Finance:Building Capacity for SME Development and Innovative Financing Mechanisms
“Advisory Support for SMEs during their Life Cycle”
Barbara Schnell, Division Chief
Financial and Private Sector Asia
2
Agenda
KfW’s Advisory Support for SMEs4
Finance and Advisory Support during the Life Cycle of SMEs3
Conclusions5
KfW Bankengruppe: Overview1
Global Challenges2
3333
60 Years of KfWFinancing with a Public Mission
● Promotional bank of the Federal Republic of Germany
● Founded in 1948 as Kreditanstalt für Wiederaufbau
● Shareholders: 80% Federal Republic,20% federal states
● Headquarters: Frankfurt am MainBranches: Berlin and Bonn
● Representative offices: around 70 offices and representations worldwide
● Balance sheet total at end 2010: EUR 441,8 billion
● Financing Volume 2010: EUR 81.4 billion
● Around 4,530 employees (2010)
● Best rating: AAA/Aaa/AAA
4
A Bank with a Wide Array of Functions
Promotion of developing and
transition countries
International business
Promotion of construction
of new housing and modernisation
as well as education
Promotion of SMEs, business founders,
start-ups
Municipal infrastructure projects and
global loans in Germany/Europe
Domestic promotion
We promote the German economy
International project and
export finance
We ensure internationalisation
We promote development
Promotion of environmental and climate protection: 25.3 bn
Business AreaSME Bank
Business AreaPrivate Client Bank
Business Area Municipal Bank Business Area
Export and Project Finance
Business Area Promotion of
Developing and Transition Countries
Funding 2010: 64.3 bn EUR Funding 2010: 5.7 bn EUR
Funding 2010: 9.3 bn EUR
5
Agenda
KfW’s Advisory Support for SMEs4
Finance and Advisory Support during the Life Cycle of SMEs3
Conclusions5
KfW Bankengruppe: Overview1
Global Challenges2
6
Sustainable Economic Growth /Pro-Poor Growth
Global Division of Labour
Shortage of Resources
Population Growth
Global Challenges
Competitiveness
Climate Change
Job creation
Structural Changes
FrameworkConditions
GoodGovernance
Peace
Income Distribution
Gender Issues
Poverty Reduction
Demographic Change
77
Role of DFIs
The framework in which promotional banks/ development
banks operate is subject to continuous change due to
● New global challenges/ structural changes to be addressed
● The appearance of new areas of market failures
● The evolution of financial markets
● Changes in governmental economic policy
Therefore development banks have to engage in a continuous
process of re-defining their roles, tasks and products.
8
Agenda
KfW’s Advisory Support for SMEs4
Finance and Advisory Support during the Life Cycle of SMEs3
Conclusions5
KfW Bankengruppe: Overview1
Global Challenges2
9
Advisory Support for SMEsConsultancy Services Guaranteeing the Success of SME Promotion
Advisory Support
● supplements KfW’s financing offers for SMEs.
● helps companies to enhance their performance.
● supports KfW’s strategy of sustainable promotional activities (e.g. economic sustainability of SMEs, job creation, climate protection).
KfW offers grants in the crucial stages of companies’ life cycle (start-up phase and crisis) and when
companies face special challenges which require detailed know-how.
10
Phases of the Organizational Life Cycle:Need of Special Advisory Support
Combination of capital and advisory support (e.g. Venture Capital)
Separate advisory support
Start up-Companies
Business Founders
Mature Companies/
Declining Companies
Turn aroundadvisory services
t
Growing Companies/
Established Companies
Advisory support for special promotional purposes
Start-upFinance
GrowthCapital
Finance for Special Promotional
Purposes
Pro
fit/
Gro
wth
11
Agenda
KfW’s Advisory Support for SMEs4
Finance and Advisory Support during the Life Cycle of SMEs3
Conclusions5
KfW Bankengruppe: Overview1
Global Challenges2
12
Loan Financing
Global Loans, SecuritizationAdvisory Services
Financing of Start-ups
Support of young, growing and of established companies
Promotional Instruments focussing on SME financing
Start-up Loan(“KfW Gründerkredit”)StartGeld / Universal
KfW Entrepreneur Loan (Part “A”)
ERP Regional Promotion Programme
Mezzanine Financing
ERP Capital for Start-ups
ERP Innovation Programme
Equity
ERP Start-up Fund
ERP Participation Programme
KfW
Participation in “High-Tech Founder
Fund” (PPP)
ERP Environmental and Energy Efficiency
Programme
KfW Entrepreneur Loan(Part “B”)
13
KfW’s Promotional Approach:Companies with a Need of Special Advisory Support
Start up-Companies
Business Founders
Mature Companies/
Declining Companies
t
Growing Companies/
Established Companies
High-Tech Founder Fund (PPP)- Companies up to 1 year -
Equity in combination withstrong advisory support
ERP Start-up Fundfor technology-based companies Equity and advisory support through Lead-Investor-Model
„Start-up Coaching in Germany“for business founders/
business start-ups
Special promotional purposes:Energy efficiency advice for SMEs
Initial advice and/or detailed consulting
Round Tablefor companies experiencing economic difficulties (in cooperation with chambers/ external advisors)
“Turn around” advisory servicesAdvice on a company’s economic,
financial and organizational questions
Pro
fit/
Gro
wth
14
Early Stage (1)High-Tech Start-ups:Combination of Financing and Advisory Support
High-Tech Founder FundGovernment, KfW, BASF, Zeiss,
Daimler, Siemens, Deutsche Telekom
Technology Start-up
- Risk Capital
Founder
- Management Support
Investor Coach
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Early Stage (2)Broad-based Initial Advisory Services for SMEs:“Start-up Coaching in Germany”
max. for 12 monthsmax. for 12 monthsSpecial Conditions for
starting a business out of unemployment
Special Conditions for starting a business
out of unemployment
Grant: 50%, 75% or 90%
of total costs
Grant: 50%, 75% or 90%
of total costs
Consulting Servicesand Coaching
Consulting Servicesand Coaching
Total costs: up to 4.000 EUR
or 6.000 EUR
Total costs: up to 4.000 EUR
or 6.000 EUR
up to 5 years after foundationup to 5 years
after foundation
Application via KfW‘s regional partnersApplication via KfW‘s regional partners
2010: ca. 29.000 commitments2010: ca. 29.000 commitments
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Special Promotional Purposes:Energy Efficiency Advice for SMEs
Detailed consultingDetailed consultingInitial Advice Initial Advice
Grant: 60 % of costsGrant: 60 % of costs
1 – 2 days of consulting1 – 2 days of consulting
In-depth energy analysis of energy saving measures and investments, savings potential
and cost effectiveness
In-depth energy analysis of energy saving measures and investments, savings potential
and cost effectiveness
Grant: 80% of costsGrant: 80% of costs
Total consulting costs:up to 8.000 EUR
Total consulting costs:up to 8.000 EUR
Reducing information deficits about
energy saving options
Reducing information deficits about
energy saving options
Application via KfW‘s regional partnersApplication via KfW‘s regional partners
2010: ca. 4.800 commitments2010: ca. 4.800 commitments
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Established SMEs with Need for Improvement:“Round Table” and “Turn Around“ Advisory Services
Round Table „Turn Around“ Advisory Services
Target Group Advisory services for SMEs experiencing economic difficulties owing to unexpected economic developments.
Advisory services for SMEs in economic difficulties, but with a positive business forecast.
Analysis of weak points already completed.
Procedure External advisors analyses the weak points and offers proposals for their solution.
“Round table” with participation of all lenders.
Implementation of measures:
External advisor coaches the company to cope with the identified weak points and to improve and restore the capacity and competitiveness of the company.
Grant EUR 160 per day of work for advisor/ project monitor (max. 10 days)
50% or 75% of the costs
Max. EUR 8,000
Partners Regional partners
Chambers of Commerce/Trade/ Crafts
Regional partners
Chambers of Commerce/ Trade/ Crafts; Local business development institutions
Commitments in 2010
Ca. 2.500 Ca. 1.700
18
Agenda
KfW’s Advisory Support for SMEs4
Finance and Advisory Support during the Life Cycle of SMEs3
Conclusions5
KfW Bankengruppe: Overview1
Global Challenges2
19
Conclusions
KfW offers advisory support in order
● to increase the prospects of success and growth of start-ups
● to support the efficient implementation of KfW financing programmes
● to encourage SMEs to improve their energy savings capacity
● to support SMEs during a (temporary) time of crisis
In addition to pure financing KfW offers a package of advisory services accompanying SMEs through their life cycle.
202020
Thank you for your attention!
Barbara Schnell KfW Bankengruppe
Division Chief Palmengartenstrasse 5–9
Financial and Private Sector Asia 60325 Frankfurt am Main
Fon +49 69 7431 – 2205
Fax +49 69 7431 – 2944barbara.schnell@kfw.de