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Conclusions of the AECM Annual Meeting – Strengthening the role of the Guarantee Institutions in SMEs financing is a necessity

The conclusions of a unique three-day international event hosted in

Athens by the Hellenic Development Bank-HDB

With great success and an impressive participation of 160 delegates from all over the world, the high-level annual meeting of the European Association of Guarantee Institutions (AECM) took place in Athens.  The 35 speakers came from 16 different countries, many of them representing supranational institutions.

Both the General Assembly, and the Annual Seminar of AECM were hosted for the first time in Athens by the Hellenic Development Bank-HDB, which is represented in its BoD by the CEO of HDB, Athina Chatzipetrou.

The CEO of HDB, Athina Chatzipetrou, is an elected member of the AECM Board of Directors and was recently elected Chairwoman of the Communication and Marketing Working Group. HDB positioned itself on the use of technology as an ally in tackling the bureaucracy of SMEs financing.

The HDB CEO presented to the AECM members the new KYC by HDB platform which facilitates access to finance via the banking system for SMEs.

The data indicating the positive footprint of the first few weeks were presented to AECM members.

  • The Hellenic Development Bank-HDB announced the free provision of two innovative digital tools for trial use to the AECM members, demonstrating the promotion of sustainability and innovation in Greece via the creation of innovative digital solutions and actions.  

These new digital tools were presented by the HDB Executive Vice-Chairman, Pantelis Tzortzakis:

Τhe ESG TRACKER by HDB, created in collaboration with the company Resnovae, a self-assessment tool for SMEs that will be able to record their stage of sustainable development based on ESG criteria.

The SOFIA Innovation Scoring by HDB, created in collaboration with the company Renvis, an innovative business tool for scoring business Innovation.

The participants were particularly impressed and satisfied by the constructive interventions of the Deputy CEO of Eurobank, Andreas Athanasopoulos and the General Manager of the Hellenic Bank Association (HBA), Charikleia Apalagaki.

  • Mr. Athanasopoulos presented a data analysis of the necessity and effectiveness of the guarantee scheme, especially in a period of shrinking credit supply from large institutions, through a detailed presentation that set the tone for the market.
  • Ms. Apalagaki presented the remarkable success of the Hellenic Development Bank-HDB’s SME support scheme to address the COVID-19 effects , highlighting the fact that these schemes have not only been half repaid, but are recording a positive trend of less than 1% in Non-Performing Loans (NPLs).

Konstantinos Makedos, Chairman of TMEDE, which is also a member of the AECM, presented detailed data proving the growth of the Greek economy. Furthermore, he demonstrated the results already achieved in the financing of SMEs that are members of TMEDE, in cooperation with the Hellenic Development Bank-HDB, thanks to the expertise and commitment of the two institutions to provide modern tools to support entrepreneurship and continuous job growth, noting the leverage of TMEDE’s resources from 8 million euros to 69 million euros in loans.

During the three-day annual event, special emphasis was placed on the need to simplify legislation, as well as on the green transition and the adoption of ESG criteria by SMEs.

  • The AECM Chairman, Guy Selbherr, observed the difficulties that SMEs often face regarding complexity in legislation and red tape related to European programmes. He suggested designing a simpler administrative treatment (proportional to what can be supplied by SMEs) for monitoring and reporting.

The OECD representative, Lucia Cusmano, announced the newly concluded knowledge partnership between the  OECD Platform on Financing SMEs for Sustainability and AECM. Marjut Falkstedt, Chief Executive of the (EIF), recognized the role of guarantee instruments and the partnership with the AECM.

Under the well-delivered moderation of Mateusz Olszak from AECM’s Polish member BGK, Andreas Bergmann, representing EC’s Directorate General for Competition, said that in the context of successive crises, prolongation of the flexibility foreseen under state aid rules should be conditioned by serious disturbances of the economy (such as liquidity risk). State aid should be limited to what is really needed and checked.

Chris Allen, representing EC’s Directorate-General for Economic and Financial Affairs, informed that over the past winter, the EU economy performed better than expected. The Commission’s role has grown.  Overall, the economic forecast foresees an improved economic outlook amid persistent challenges.

Jonathan Denness, representing EC’s Directorate-General for Regional Policy and Urban Development examined the question on whether regulation might make new programs easier. He presented the most important elements of the new CPR regulation that were simplified and pointed that sometimes, due to multi-level actors, simplification might be complicated.

  • Among others, the issue of the de minimis rule concerning state aid and the possibility of increasing the threshold in the next few months was discussed.

Commenting overall on programmes for the coming years, it was observed by the delegates that the effort to reduce allocation of grants is a positive factor for guarantee schemes, allowing better leverage of EU resources and mobilisation of more resources by Member States.

Regarding the European InvestEU programme, it was noted that the speed of implementation is improving and that there is confidence in the overall success of the programme in the future, with some final possible adjustments. Following an introductory speech of Giorgio Chiarion Casoni who represented the Directorate-General for Economic and Financial Affairs, a discussion took place between him, Astrid Bartels from the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, Agata Mazurkiewicz from the Directorate-General for Competition, Ana Vizcaíno Ochoa from the Spanish counter-guarantee institution CERSA and Kiril Velitchkov, Manager of KBC Group European Financial Instruments under the successful moderation of Kurt Leutgeb, Head of Guarantees and Equity from aws, one of AECM’s two Austrian members.

Regarding the regulatory environment to finance sustainability of SMEs, Gerhard Huemer, representative of SMEunited, pointed out the factors hindering growth in a general context of consecutive crises, such as the lack of available manpower. A similar opinion was expressed by Lina Konstantinoupoulou from the body Eurochambres, representing some 20 million European SMEs, which oppose the invasion of regulation, reporting requirements and red tape.

Giovanni Zazzerini, Secretary General of the International Network of Small and Medium Enterprises – INSME, stressed the need for more innovation as a source of development. Regulation on sustainability, even if it is considered as a “burden”, has to be seen as an opportunity for SMEs to better analyse themselves, offering the possibility to open new fields and markets, he noted.

Tony Greenham, representative of the British Business Bank, described the profile of the regulatory requirements, which has some common features with the European one.

The Green and ESG finance should vary between large and small banks and be used as a strategic advantage. The new green finance should be additional, not substitutional the existing ones. Both banks and customers will be the driving forces in leading most SMEs to adopt ESG criteria, not regulations.

Burçak İnel, representative of the European Banking Federation, focuses to make the supply of sustainable growth financing an objective for the banks by disseminating best practices and awareness.

The CEO of the Credit Guarantee Fund (KODIT) from Korea, Mr. Choi Won-mok, noted that the Korean institutions are seeking to create a good harmony between practicesand regulatory rules in guarantee activity to ensure greater efficiency. Participants were impressed by the overwhelming size and the high impact of the guarantee activity in Korea which was represented by delegations from KODIT, KOTEC and KOREG.

It is worth noting the view of the Association of German Guarantee Banks (Verband Deutscher Bürgschaftsbanken, VDB), represented by Gernot Rößler, who is also the Chairman of AECM’s working group Law and Regulation,  on guarantee institutions relating to the fact that the current banking legislation is demanding more and more requirements. He discussed the regulatory framework under the refreshing moderation of Giuseppe Gramigna, Senior Adviser of the World Bank Group and also of AECM, with Lászó Tóth, Deputy CEO at AVHGA, one of AECM’s two Hungarian members and with Konstantinos Adamantopoulos, Legal Adviser to TMEDE.

From the Egyptian side, namely Nagla Bahr, President of the Euro-Mediterranean Guarantee Network (EMGN) and Managing Director of the Credit Guarantee Company, it was noted that the Egyptian guarantee scheme has shown a significant increase in its activities in recent years due to a strong financial support from the Central Bank. The international perspective was completed with speeches from Luz Stella Lozano, Secretary General of REGAR, and of Cha Ji Yeong, Deputy General Manager of KOREG which were followed by a discussion moderated by José Fernando Figueiredo, Founding President of GNGI and Special Honorary President of AECM to which also Mohammed Al-Jafari, Director General of JLGC, added his profound expertise.

  • It is noted that at the annual meeting of the Global Network of Guarantee Institutions (GNGI), in the margins of AECM, Bernhard Sagmeister from aws, Austria was elected and Mohammed Al-Jafari from JLGC, Jordan was re-elected as co-coordinators of the GNGI.

The three-day annual event was attended by, among others, representatives of the European Commission and top executives of guaranty institutions from around the world.

The HDB Chairman of the BoD, Mr. George Zavvos, hosted on  behalf of the HDB BoD a gala dinner at the Acropolis Museum to welcome the AECM members and delegates.

AECM is a strong and well-established organization with members in more than 30 countries and now 5 international partners, since the General Assembly of AECM accepted unanimously the partnership application of the Credit Guarantee Company of Egypt during its internal meeting in Athens.