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ESTONIAN RURAL DEVELOPMENT FOUNDATION Rain Vändre Member of the Board

ESTONIAN RURAL DEVELOPMENT FOUNDATION Rain Vändre Member of the Board. A BANKER is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. Mark Twain RURAL DEVELOPMENT FOUNDATION

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ESTONIAN RURAL DEVELOPMENT FOUNDATION Rain Vändre Member of the Board

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  1. ESTONIAN RURAL DEVELOPMENT FOUNDATION Rain Vändre Member of the Board

  2. A BANKER is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. Mark Twain RURAL DEVELOPMENT FOUNDATION is a partner who lends you his umbrella for sun andrain.

  3. Rural Life Crediting Foundation (1993) + Rural Credit Guaranty Fund (1997) = Rural Develompent Foundation (2001) HISTORY

  4. The Foundations rights of establishment are executed by Ministry of Agriculture. The purpose of the Foundation is to support economic development in Estonian rural areas by executing specific support programs. The activity of the Foundation enables to retain rural areas employment and to improve sustainabilityof rural entrepreneurs. ABOUT US

  5. STRUCTURE Minister of Agriculture supervisory board 7-15 members management board up to 3 members credit committee secretary up to 5 members customer service legal accounting service and financial service

  6. Credit Committee of Management Board decides on projects up to 130 000 EUR and makes proposals on projects over 130 000 EUR to Supervisory Board. Supervisory Board decides on projects up to 1 600 000 EUR. DECISION COMPETENCE

  7. REVENUE 1,531 mEUR Interest income 1,508 mEUR incl Interest income from loans 1,2 mEUR Revenue from guarantees 240 947 EUR Other incomes 22 561 EUR EXPENSES 1,36 mEUR Allowance for loan losses 319 558 EUR Maintenance expenses 624 353 EUR Other reserves 83 470 EUR Result of the financial year 172 561 EUR BUDGET 2006

  8. ASSETS EUR Cash at bank 6 581 499 Loans 31 273 828 Allowance for loan losses - 1 016 539 Other receivables and prepayments 81 355 Fixed assets 13 226 TOTAL ASSETS 36 933 368 * EUR/EEK 15,6466 BALANCE SHEETS 31.12.2004

  9. LIABILITES AND EQUITY EUR Debts 51 673 Guarantee reserve 1 984 686 Total liabilities 2 199 710 Owners`equity 33 012 041 Result for the financial year 1 191 799 Total owners´equity 34 733 657 TOTAL LIABILITES AND EQUITY 36 933 368 * EUR/EEK 15,6466 BALANCE SHEETS 31.12.2004

  10. Total revenue 3 282 205 Total expenses 2 074 758 Result for the financial year 1 191 799 * EUR/EEK 15,6466 STATEMENTS OF REVENUE AND EXPENDITURE 31.12.2004

  11. GUARANTEES Our activity takes place on a self- supporting basis, i.e that the income earned by the RDF covers all the costs connected to the activity. The extent of the guarantee issued by the RDF was increased up to 75% based on the Rural Development and Agricultural Market Regulation Act. The liability of the Foundation arising from a guarantee/suretyship instrument extends only to the debtor’s principal monetary obligation and supplements the debtor’s liability.

  12. GUARANTEES What is the core principle behind the guarantee? The primary liability of the entrepreneur lies with the loan – the loan is secured by the entrepreneur’s property. By providing a guarantee, RDF assumes secondary liability. If the entrepreneur’s business plan proves unsuccessful and the loan cannot be serviced, the property set as collateral to the loan will be realised in the first order. If the proceeds from the disposal of the collateral prove insufficient for covering the bank’s claims, RDF will disburse the guarantee to the bank.

  13. Loan amount guaranteed by RDF cumulated from 1997 to 2005(in million EUR) * withdrawal from 1997 to 2005 - 2,39% (1,2 mEUR)

  14. GUARANTEES in 2005 133 guarantee agreements (9,0 million EUR) The rural entrepreneurs used the guarantee mostly to receive loans (16,7 million EUR), and factoring-financing (0,7 million EUR). For leases the guarantees were used significantly less. Theaverage amount of a loan issued to a rural entrepreneur was 130 000 EUR, which on average was guaranteed by the Foundation in the amount of 70 000 EUR or by 51,7 %.

  15. GUARANTEE ACTIVITY01.01 - 31.12.2005

  16. LOANS PORTFOLIO (in million EUR)

  17. LOANS in 2005 • RDF issues two types of direct loans: • investment loan; • loan for bridge financing of non-profit associations. • Other loans are issued to customers by co- • operation partners: banks, leasing companies, • savings and loan associations.

  18. LOAN ACTIVITY 01.01 – 31.12.2005

  19. Loan amountdue toobtained by enterprisesfrom 1997 to 2005is323 million EUR/incl. loans 220 million EUR and loans with RDF´s guarantee 103 million EUR/

  20. Hansapank, SEB Eesti Ühispank, Sampo Pank, Tallinna Äripank, Eesti Krediidipank, Parex Banka, Bayerische Hypo- und Vereinsbank AG as well as their subsidiaries. The Foundation has co-operation contracts with savings and loan associations. COOPERATION PARTNERS

  21. Aadress R.Tobiase 4, 10147 Tallinn, Estonia Telephone +372 648 4064 Facsimile +372 648 4065 E-post mes@mes.ee Internet http://www.mes.ee CONTACT Management Board Raul Rosenberg, Rain Vändre, Thea Kaurla

  22. Thank you for your attention! Questions?

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