ISMEA – SGFA Rural Credit Guarantee Funds

1. ISMEA – SGFARural Credit Guarantee Funds January 12th 2006 - Budapest

2. The Past Ministry of Economy Supervision Rural Credit Guarantee Fund (FIG) Subsidiary guarantee

3. The Change – First Step • Public rural credit guarantee funds reorganization: • 2004 December – the Fund merged by incorporation into ISMEA • ISMEA – Rural Market Services Government Agency • Supervised by Ministry of Agriculture

4. The Change – Second Step • ISMEA added new guarantee products to the subsidiary guarantee • December 2005 – ISMEA’s guarantee activities pass to SGFA (company 100% owned by ISMEA)

5. Current Situation Ministry of Agriculture Supervision ISMEA 100% Subsidiary guarantee SGFA Direct guarantee

6. The Subsidiary Guarantee Fund • The fund was established in 1961 in order to help farmers to access long-term agricultural loans to start up new business • In the seventies the Fund was allowed to issue guarantees for agricultural medium and short-terms loans too

7. The Subsidiary Guarantee • Automatically issued by the Fund • Paid by the Fund when the banks incur a loss after the primary guarantees collection

8. The Fund’s Activity From To Bank Loan Borrower Borrower Primary guarantee Bank After the primary guarantees compulsory collection Fund Subsidiary guarantee Bank After the payment Borrower Additional guarantees Fund

9. Cover Percentage

10. The Direct Guarantee Fund • Still in progress • A State counter guarantee is provided for SGFA guarantee engagements • Three products • First Call Guarantee • Co-Guarantee • Counter Guarantee

11. Thank you • Giorgio Venceslai • venceslai@sgfa.it • SGFA • Via In Lucina, n.17 • 00186 – Rome – Italy • Tel. +390668406430