1997 is record year for Kera Corporation
Over 11,000 new jobs created in Kera financed projects and 3,000
new companies set up
An estimated 11,300 new jobs were created in projects financed
by Kera in 1997, which is the largest number so far and almost
40% greater than the previous year. In 1997, the number of client
companies also rose from 11,000 to a new high of 17,000. Half
of these new client companies, about 3,500, were new enterprises.
Nearly half of the new jobs were in the industrial sector, a fifth
in corporate services, and a fifth in both the retail sector and
companies producing consumer services.
In 1997, the total amount of funds granted by Kera rose to FIM
2.1 billion, of which FIM 1.7 billion was loans and FIM 300 million
guarantees. The volume of regional venture capital financing tripled
compared with 1996. The share of risk financing – i.e. financing
without adequate collateral – was 95%.
Effective since the beginning of 1998, the new Finnish criteria
for SMEs, which is in accordance with similar EU criteria, will
increase the amount of potential client companies. According to
the new criteria, the turnover of a SME may not exceed 40 million
ecu (approx. FIM 240 million) nor the total assets 27 million
ecu (approx. FIM 160 million).
In 1997, the amount of bankruptcies among client companies remained
low and was clearly smaller than the previous year, partly explaining
the improved result for 1997. The PRO97-project in which personnel
participated actively was used to develop internal efficiency.
Financing granted equally distributed between the regions
21% of total financing was granted to support area I of the development,
18% to support area II, 19% to support area III, and 14% to areas
of structural change. Client companies in the support areas I
and II and the areas of structural change received regional interest
subsidy of 1% or 2% for loans granted by KERA. Close to a third
of total financing was directed outside the development areas.
An estimated 18% of all new jobs were created in surpport area
I of the development, 17% support area II, 18% in support area
III and 11% in the areas of structural change.
Client companies boost exports
According to the client companies’ final accounts, exports increased
noticeably, over 13%, and the total value of exports for all client
SMEs was approximately 22% of their aggregate turnover.
In addition to guarantees and loans for investment and operating
capital, Kera can participate in export investment through special
development loans. Last year, FIM 75 million of such loans were
granted.
Surprisingly strong demand for small loans
Kera’s small loans, micro-loans and loans for women entrepreneurs
were all part of the national drive against unemployment. Over
FIM 300 million worth of micro-loans were granted and loans for
women entrepreneurs worth FIM 110 million.
In spring 1996, Kera already provided client companies with micro-loans.
However, it was only at the beginning of 1997 that such loans
became available to companies in the retail and consumer service
sectors. The loans for women entrepreneurs, which are meant for
companies owned and managed by women, were included in Kera’s
selection of financing products at the beginning of 1997, and
have been available to all sectors with the exception of agriculture.
Early in the year, Kera’s regional offices were flooded with loan
applications, resulting in additional work as each application
required a company analysis regardless of the loan amount.
Demand for small loans may decrease this year as pent-up demand
was relieved last year.
Client companies benefit from restructuring of governmental administration
Co-operation with the newly-formed State Employment and Economic
Centres has proven to be useful and conducive to improved efficiency
in corporate services throughout the country. The above centres
began to operate in autumn 97 and include the regional units of
the Finnish Foreign Trade Association and the Technology Development
Centre of Finland. Moreover, if the share of Regional Councils
is included in this co-operation, the recent structural development
in administration has clarified the division of labour between
the various parties.
Kera also aims to co-operate with the enterprise agencies in order
to shorten the time spent on applications for small companies.
The project to reform governmental special financing was commenced
in 1997. Representatives from Kera participated in the project’s
preparation. We are fully confident that the project will improve
the quality and effectiveness of our client services.
EU support for loans granted by Kera
The European Regional Development Fund grants interest support
to Kera’s small loan programme(micro-loans, loans for women entrepreneurs,
start-up loans)in eastern and northern Finland and industrial
areas of structural change. For 1998-99, FIM 40 million has been
allocated for interest support. The programmes are expected to
commence at the beginning of March 1998.
According to Kera, FIM 300-400 million can be granted for loans
in the small loan programme. The financing would create 3,000-4,000
new jobs largely in the service and industry sectors. It would
also require an equally large amount of national support in the
form of interest subsidy and compensation for credit loss.
The question at hand is significant as Kera is set to become the
Finnish intermediary for regional aid offered by the EU’s Structural
Fund.
For further information, please contact:
Information Officer Irja Saikkonen,
tel.+358 (0)20 460 3232.
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© Kera Corporation