Summary of operations |
Credit portfolio |
Risk
management | Profit and loss
account | Balance
sheet | Statement of source
and application of funds
The year 1996 was a successful year for Kera
Ltd in many ways. The company’s own financial performance was the
best in its 25 years of operations. But first and foremost, Kera Ltd
proved its effectiveness as a risk financier and developer of small
and medium-sized enterprises.
Nearly 8,000 new jobs were created in Kera-financed investment
projects, mainly concerning SMEs. This is the highest figure in
Kera’s history. It is also notable in national and international
terms.
Demand for financing picked up on the previous year. SMEs, too,
finally emerged from their recession-generated stupor and investment
got off to a cautious start. The number of business start-ups also
grew. Kera Ltd’s credit and guarantee portfolio increased, but above
all growth was most evident in the number of clients. The inflow of
small enterprises boosted the clientele by as much as 40%, giving a
total of 11,287 at year end. During the year, Kera Ltd operations
were overhauled and expanded substantially. The starting point for
the reform was the international evaluation conducted on Kera in 1995
and the strategic policy outlined on that basis in association with
the Ministry of Trade and Industry.
Kera’s role as an SME risk financier became more apparant. The
focus is on correcting deficiencies and upgrading the efficiency of
financial markets with loan and guarantee products targeted at SMEs
which allow for collateral risk. Furthermore, a greater proportion of
Kera’s financial products are special products promoting the start-up
and development of SMEs, i.e. start-up loans, micro-loans, loans for
female entrepreneurs, development loans and environmental loans. A
capital loan was introduced for companies in the growth stage.
The most important innovation in Kera’s substantial product
development were small loans. The aim was to develop a suitable
financial product for small businesses which are either in the
start-up phase or already operating, to promote the creation of new
enterprises and jobs. In spring 1996, a micro-loan was introduced for
businesses with at most five employees. This was supplemented with a
special loan for female entrepreneurs at the beginning of 1997.
Demand for micro-loans has been gratifyingly brisk, and we have
clearly reached a new, younger generation of entrepreneurs. Within
just over six months, micro-loans were used to finance some 3,000
businesses, creating over 3,000 new jobs. It seems that the
micro-loan is an extremely effective and, in financial terms,
exceptionally economical instrument in promoting the rise of new
small businesses and jobs.
A notable reform was also that service businesses are now eligible
for Kera Ltd risk financing as regards small loans and guarantees.
This marks a new chapter in government business and industry policy.
Kera Ltd continued to intermediate European Investment Bank
funding to Finnish SMEs. It also began to intermediate within the
EU’s JOP programme, which promotes the foundation and development of
joint ventures in Central and Eastern Europe. About 150 Finnish SMEs
said they were interested in the wide range of finance available
under the programme. Kera Ltd’s results improved further in 1996. The
consolidated profit and loss account shows a profit of FIM 110.6
million for the financial year, and the corresponding figure for the
parent company (Kera Ltd) is FIM 100.9 million. The Group posted a
better result than the parent company, mainly because of Incap Oy’s
performance. The growth in Kera Ltd profits was due to the improved
net income from financial operations and the fall in credit losses.
Of the subsidiaries, Start Fund of Kera Oy expanded its venture
capital activities by setting up two new sectoral funds, with equity
acquired mainly from private sources. Kera Ltd was also active in
developing the operations of regional venture capital companies.
1996 was a profitable and workintensive year for Kera Ltd, and
attaining the targets for 1997 will call for considerable further
effort. Following accelerated economic growth, the prospects for SMEs
are favourable. Growth and investment are now also possible for
businesses on the domestic market.
In Finland as elsewhere in Europe, SMEs are playing an
increasingly important role in job creation. For its own part, Kera
Ltd is helping to lay down the preconditions for better employment in
SMEs. Versatile risk financing and development are needed at all
stages of setting up and developing a business. This is new,
jobcreating European SME policy at its best.
I should like to express my thanks to the company’s new and old
clients, and also to thank our constituent groups for their
invaluable support. At the same time I should like to thank the
entire staff of Kera Ltd for their excellent and succesful work in
1996.
Managing Director
© Kera Ltd