JEREMIE Programs in Hungary László Kállay Head of Department Department for Enterprise Finance Ministry for National Development and Economy Brussels, 2 June, 2008

Operational structure Final beneficiaries National Development Agency (NFÜ) Level 1 Program accounts, Holding Fund Managing authority EU Treasury Level 2 Level 4 Level 5 NFÜs Treasury Account n+2 (2015) line Financial intermediaries Level 0 Level 3 Venture Finance Hungary Co. Ltd. (MV Zrt. - financial institution acting as holding fund manager)

Legal background According to Regulation 1083/2006/EC a financial institution can be selected as holding fund manager through public procurement, or through designation by law In Hungary Venture Finance Hungary Plc. (MV Zrt.) has been designated as the holding fund manager, based on the provisions of Government Decree 255/2006 regarding New Hungary Development Plan As an integrated part of NDPs institution system, National Development Agency (NFÜ) has the following tasks: –Harmonization of the planning, programming, evaluation and execution of NDP –Co-ordination of the planning, programming and execution of operative programs Based on the provisions of Regulation 1080/2006/EC and 1828/2006/EC and considering national properties, NFÜ and MV Zrt. have signed a Funding Agreement.

Financial Programs Aim: To eliminate uncovered market failures (based upon GAP- analysis) Tool: New financial programs – In the first two years (action plan) of the budget period: 1.Micro Loan 2.Portfolio guarantee 3.Venture capital Funds Further specific programs can be launched later on (factoring loan/guarantee, social loan, etc.) Resources allocated to each product are easily re-allocable

1. Micro loan Type of fund: refinancing fund for financial intermediaries (HUF 82.8 bn, EUR 330 mn allocated) Loan guarantee is available for intermediaries as an option Fin. intermediaries: Credit institutions, financial enterprises, local micro- finance institutions Contribution by financial intermediaries: Credit institutions, bank-owned financial enterprises: min. 50% Micro-finance institutions, other financial enterprises: min. 20% Main conditions of micro loan Size: max. HUF 6 million (cca. EUR 25 thousand) Purpose of loan: capital expenditures and/or current assets Interest rate: max. EU ref. Rate bp. Loan period: max. 5 years

2. Portfolio guarantee Facility: automatic portfolio guarantee behind SME loans (HUF 67.2 bn, EUR 268 mn allocated) Financial intermediaries: Credit institutions, bank-owned financial enterprises Extent of guarantee: max. 80% of the guaranteed part of the loans Guaranteed SME loans: Size: max. HUF 100 million (EUR 400 thousand) Maturity: max. 10 years Purpose: capex and current assets

3. Venture capital Aim: to improve the capital status of the Hungarian SMEs in the early (seed, startup) and growth stage. Launch of the program: last quarter of 2008 Facility: financial resources for venture capital funds (HUF 46 bn, EUR 185 mn allocated) Financial intermediaries: Independent entities licensed to manage registered venture capital funds according to Act CXX of 2001 on the Capital Market. Alternatives for co-operation: Joint Fund; Co-Investment Fund Private contribution required: min. 30% Investment size: Max. EUR 1.5 million investment per year per target company (max. in 3 consecutive years)

Micro loanPortfolio guarantee Total Tenders publishedOct, Nov 2007Nov 2007 Incoming tenders (EDOP and CHOP)21526 Number of applicants18321 Tenders accepted (EDOP and CHOP)14519 Tenders rejected (EDOP and CHOP)202 Agreements signed (EDOP and CHOP)1213 Amount committed (EDOP and CHOP)HUF 15.6 bnHUF bnHUF bn Amount provided (EDOP and CHOP)HUF 1.4 bn0 Status of the programs as of 26th May 2008 Financial intermediaries Volume of loans contracted (EDOP and CHOP)HUF 1.4 bn Number of beneficiaries291 Average loan sizeHUF 4.8 million Average intertest rate6-6,5% Micro loans placed

Thank you for your kind attention! László Kállay Tel.: Fax.: