1. 1 Innovative Financing for Women Entrepreneurs Siv Hellén General Counsel Nordic Investment Bank August 12-13, 2004 Equal Opportunities for WoMen 2004 Nordic Forum in Turku, Finland

2. 2 BACKGROUND – 1 ST LOAN PROGRAM nThe idea was born at a conference in 1999 in Reykjavik called ”Women & Democracy at the dawn of the new Millennium” nThe first loan facility of EUR 1 million was established in 1999 under NIB’s Baltic Investment Program nThe facility was divided into three equal parts per country nNIB signed agreements with one bank in each country which banks then onlent the money for 44 projects nThe facility was fully used up in September 2000 nSurveys were made in all Baltic countries concerning female entrepreneurs 1 st loan program

3. 3 ELIGIBLE PROJECTS nThe purpose of the loan program was to support and increase women’s involvement in business and decision-making nThe projects were carried out by local SMEs or resident individuals in the private sector nPriority was given to –Projects creating jobs and projects financing SMEs located in rural areas and in regions with high unemployment –Projects involving transfer and exchange of know-how, goods and services between the Baltic and the Nordic countries –Projects involving interaction between women with different backgrounds 1 st loan program

4. 4 FINANCING REQUIREMENTS AND LENDING TERMS AND CONDITIONS nRequests considered on commercial and economic basis nFocus on the strategy of the potential borrower and the competitiveness of the project idea and also on environmental aspects nFlexibility on the expenditure, but requirement for other financial resources to back the project nMaturities of 5-7 years nInterest rate based on market terms and set by the financial intermediaries nLoans to be adequately secured 1 st loan program

5. 5 LOAN ACTIVITY – SECTOR BREAKDOWN 1 st loan program

6. 6 EXPERIENCE GAINED: WOMEN’S POINT OF VIEW Surveys showed: nWomen set up their companies still with own capital nWomen have equal opportunities to access credit nWomen need more encouragement and support nWomen want role models nWomen need more information on credit possibilities nWomen are more careful and take less risks than men nWomen feel that credits for SMEs are in general too expensive 1 st loan program

7. 7 nMany women found it positive that the loans were intended only for women and thought this would support women’s entrepreneurship nSome were disappointed with the conditions and requirements, others were positively surprised by the friendly and helpful reception and quick procedure at the banks n50 % of the women thought they will probably need more financing in the future for their business (expenditure or continuing) nGovernment support was considered to be important 1 st loan program EXPERIENCE GAINED: WOMEN’S POINT OF VIEW

8. 8 nBanks found it difficult to combine profitability and small credits nBanks were not used to address women’s particular concerns nBanks should not give advice on how to prepare business plans nBusiness plans prepared by external consultants often not of good quality nWomen in rural areas with start-up projects were difficult to reach nLoan applicants did not have sufficient collateral 1 st loan program EXPERIENCE GAINED: BANKS’ POINT OF VIEW

9. 9 nWomen like to be target clients nWomen do not need generally better terms and conditions nWomen need good advice in preparing business plans nWomen need information about credit possibilities nBanks need training in how to handle women entrepreneurs as clients nCollateral support is needed especially in rural areas and for start-up projects nExpedient loan processing essential EXPERIENCE GAINED: SUMMARY CONCLUSIONS 1 st loan program

10. 10 2 ND LOAN PROGRAM nProvided in equal parts by NIB & CEB nTotally EUR 10 million for the Baltic countries nEstonia: EUR 2 million through one local intermediary nLithuania: in total EUR 4 million through two local intermediaries –Supported by Finnish Ministry for Foreign Affairs nLatvia: EUR 4 million through two financial intermediaries nTotally 119 projects, maintained 1 786 jobs and created 329 new jobs 2nd loan program

11. 11 Loan Program for Russia nSt. Petersburg and Leningrad Oblast area. nFinancial intermediary: Vneshtorgbank (VTB) nProgram amount EUR 2 million nSME involving women in decision making process nSingle loan to a project not exceeding 50% of total project cost or EUR 100,000 nInterest rate based on market terms and margin to reflect the risk of the project. nMaturity not exceeding 5 years.