Jean Claude Depoisier (SOCAMA) - The EU Financial Instruments : Experiences gained of the SOCAMA Network
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The SOCAMA network is a mutual guarantee organization established in France in 1917 to facilitate access to bank loans for small businesses. It consists of 26 regional organizations that guarantee over 25,000 loans worth €700-900 million annually. SOCAMA works exclusively with Banque Populaire banks to reduce collateral requirements and protect entrepreneurs' personal assets. With support from the European Investment Fund, SOCAMA offers two loan products - one for business growth and another for business transfers - that provide a 100% guarantee and limit recourse to personal assets. SOCAMA has seen strong growth in loan production since 2003 thanks to these new products but activity decreased during the financial crisis before a slight rebound in 2010. SOCAMA's expertise
Jean Claude Depoisier (SOCAMA) - The EU Financial Instruments : Experiences gained of the SOCAMA Network
- 1. Jean Claude Depoisier Vice-Président of the SOCAMA Network Istanbul 17th October 2014 The EU Financial Instruments : Experiences gained of the SOCAMA Network
- 2. Sommaire 1. The SOCAMA : Facts and figures, missions, organizational model, decision-making process, business model 2. Relations with EIF and Products of SOCAMA supported by European programs 3. Performance of SOCAMA : key figures 4. Conclusion 2
- 3. 1.The SOCAMA Set up for and by entrepreneurs (1917 Act ) Activities of guarantees for bank loans A network of 26 SOCAMA throughout France 250 000 members Between 25 000 and 30 000 loans guaranteed every year for a total value of € 700 - 900 million Exclusive partnership with the Banques Populaires 3
- 4. 1.The SOCAMA : Missions To facilitate access to bank loan finance To reduce collateral requirements by the Banques Populaires To protect the entrepreneur’s personal assets – By providing a 100% guarantee 4
- 5. 1.The SOCAMA : Organizational model Representatives from the different sectors (800 volunteers) : Professional organizations Chambers of Crafts Chambers of Commerce 5
- 6. 1.The SOCAMA : Decision-making process SOCAMA Analysis of professional criteria BANQUE POPULAIRE Risk control and Analysis of financial criteria Grant the SOCAMA guarantee Loan grant by BANQUE POPULAIRE If ok Banque Populaire If ok SOCAMA 6
- 7. 1.The SOCAMA :The business model The SOCAMA guarantee is funded as follows : Underwriting of share members Contribution to mutual guarantee fund Payment of management fee 7
- 8. 2.The SOCAMA supported by European programs Two exclusive SOCAMA / Banque Populaire / EIF products to protect the personal assets of the entrepreneur and his/her family: To finance the growth of companies : “SOCAMA Express Loan without personal collateral requirements” To finance business transfers : “SOCAMA Business Transfer Loan » 8
- 9. 2. Relations with IEF : agreements signed European programs MAP CIP1 CIP2 Periods To September 2003 from June 2007 To October 2007 from March 2011 To April 2011 from March 2013 To April 2013 from March 2015 Total amount loans counter- guarantee 965 M€ 1 318 M€ 1 800 M€ 9
- 10. 2.The SOCAMA product mix with the support of European programs The SOCAMA Express Loan without personal collateral (PESE) - Maximum loan amount : € 50 000 - Loan term : between 18 and 60 months - 100% SOCAMA loan guarantee with 50% counter-guarantee by the EIF. - Advantage for the borrower : Full protection of personal assets. The SOCAMA and Banque Populaire explicitly decline to claim the pledge of any personal collateral or guarantee 10
- 11. 2.The SOCAMA product mix with the support of European programs The SOCAMA Business Transfer Loan (PSTR) - Maximum loan amount : € 150 000 - Loan term : between 18 and 84 months - Period of grace up to 9 months possible - 100% SOCAMA loan guarantee with 50% counter-guarantee by the EIF. - Advantage for the borrower : Protection of personal assets. Recourse to personal assets is limited to 25% of the loan amount. 11
- 12. 3. Performance of SOCAMA : Key figures Loan production Strong increase of activity between 2003 and 2007 through the launch of new products developed in partnership with the EIF……followed by a decrease during the crisis years and a slight rebound in 2010. Production in € million 3 211 204 158 217 270 296 258 232 46 108 147 173 127 114 164 185 184 177 184519 574 575 535 671 549 375 382 397 358 326 0 100 200 300 400 500 600 700 800 900 1000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 PSTR PESE STANDARD 12
- 13. 3. Performance: Key figures Production by activity sector as of 31/12/2013 13
- 14. 3. Performance of SOCAMA : Key figures division of loan allocation as of 31/12/2013 14
- 15. 3. Performance of SOCAMA : Examples of financed projects Financing of the purchase of a vehicule in a joinery Need 17K€ : purchase of the véhicule 17 K€ Financing : The SOCAMA Express Loan without personal collateral 17 K€ Financing of a lift for welcome of the handicapped persons in a hotel Need 30 K€ : a lift 30 K€ Financing : The SOCAMA Express Loan without personal collateral 30 K€ Financing of the installation of a 30-year-old young man as craftsman taxi with purchase vehicule and license Need 180 K€ : a new véhicule 35 K€ - license 140 K€ - expenses transaction 5 K€ Financing : Money of the family 15 K€ - The SOCAMA Business Transfer Loan 150 K€ - Complementary Loan 15 K€ 15
- 16. In conclusion, …….. - Its exclusive partnership with the Banques Populaires, - its expertise in analyzing professional criteria, -its very confordable pricing, - and its products supplied together with the European Investment Fund and European supports, .…………...do SOCAMA the leader mutual guarantee company for small business in France. 16
- 17. Thank you for your attention 17