EC-OECD Financing Start-Up Seminar -

Key Conclusions

1. Importance of entrepreneurship in ESF programmes

• Entrepreneurship is an avenue for economic recovery and job creation; critical at a time of high unemployment.

• There is under-exploited potential in disadvantaged (youth, unemployed, handicapped) and under-represented groups (women, seniors).

• Support should be focused on the barriers facing these groups : lack of access to loans, poor financial literacy, lack of credit history, negative attitudes to entrepreneurship, weak entrepreneurship skills

• These people have different needs and need adapted or specialised support

EC-OECD Financing Start-Up Seminar -

Key Conclusions

2. Entrepreneurship support systems are more effective than individual actions

• A weakness of current support is a series of disconnected, short-term measures with only partial coverage of the needs

• Integrated programmes fill gaps and make links, ensure that bottlenecks are addressed

• Measures are needed across the whole entrepreneurship ‘life cycle’: orientation/gestation; start-up; growth/crisis – with clear ways forward and increasing intensity

• A menu of measures exists from previous programmes, e.g. EQUAL: training, business development services, access to finance, access to markets, legal frameworks, welfare bridge, entrepreneurship education

• An action planning process can be used to conceive the system and involve stakeholders

EC-OECD Financing Start-Up Seminar -

Key Conclusions

3. A foundation of specialist intermediaries must be nurtured

• Some of the most successful interventions have been realised through specialist agencies like IQ Consult and Fair Finance

• They have understanding of the market, ability to reach the target groups and a drive to innovate

• ESF support can be used to generate these types of new business model

• It is important to scale up the best initiatives of this kind – and share best practice models

EC-OECD Financing Start-Up Seminar -

Key Conclusions

4. Microfinance initiatives are needed

• Finance is one of the biggest barriers to start-up – for living expenses (welfare bridge) and business expenses (grants and loans)

• Most current ESF programmes use grants – but these not as efficient as loans; they are expensive to the public and do not use private sector expertise

• Traditional banks are unlikely to enter the microfinance loan market – their model is of low interest rates and low transaction costs; but misses those with no credit history

• Interest rates are not the key factor in success – outreach is more important

EC-OECD Financing Start-Up Seminar -

Key Conclusions

5. Evaluation has a central role to play in programme development

• Ex ante evaluation results must be attached to the Partnership Contract

• It must include data on the rationale for proposed actions, indicators for monitoring and estimates of expected results

• Logical frameworks are the key tool, together with appropriate indicators

• Bear in mind the counterfactual