In December 2013, the go-ahead was given for the Hessen-Mikrodarlehen ("Micro-Loan"), an unsecured loan especially initiated to support founders and start-ups. From the inception of the programme to the end of the year 2018, a total of 361 projects, with loans amounting to a total of EUR 6.7 million, were funded. With a commitment share of 71 per cent, the average volume that has been applied for amounted to EUR 18,032. This clearly shows that large amounts are not always needed to foster the success of a good business idea. The defaults seen to date have amounted to EUR 144,115, i.e. less than 2.2 per cent since the end of 2013. Looking back to the preceding year, a total of 75 loan applications in a volume of EUR 1.59 million were approved in 2018.
The product has now been in the market for five years and the first clients have now repaid their loans on schedule. Among them is the businesswoman Rieke Rauert, who, with the support of the Hessen-Mikrodarlehen, turned her passion for interior design into a career five years ago and founded the Home Staging Company "ROOM N°1". Today, Ms. Rauert successfully furnishes and decorates properties that are up for sale as well as show apartments and showrooms and meanwhile has made a name for herself not only in Frankfurt but also beyond. "The beginning in particular was challenging, as I did not have any contacts at the time. During the first two years, I have therefore predominantly been networking. After I was able to produce the first two important recommendations, much has changed and the business slowly started to get going. Now everything is going fine - ROOM N°1 is now a German limited company (GmbH), and a large number of projects are on my list again in 2019, from interior design concepts to speeches and furnishing projects. I am even going to launch a second company", says Rauert, summing up her success story. (The complete interview with Rieke Rauert may be found here).
"At the time, we initiated the Hessen-Mikrodarlehen in order to help founders bring their new business ideas to the market. The strong demand for this type of loan proves that we are offering a highly attractive product for start-up funding. Hesse will also in the future provide funding, in order to support entrepreneurs", says Tarek Al-Wazir, Minister of Economics, Energy, Transport and Housing of the State of Hesse.
The Hessen-Mikrodarlehen, which WIBank offers on behalf of the State of Hesse via cooperation partners, such as Chambers of Crafts and Chambers of Industry and Commerce or regional business promotion agencies, to which the applications for the loan are sent, may amount to between EUR 3,000 and EUR 25,000. Meanwhile it constitutes an important element of the Hessian start-up funding programme. It serves to fund investment and working capital which is required for the start-up, takeover or consolidation of an enterprise in Hesse during the first five years after commencing its business activities. The Hessen-Mikrodarlehen is being used by a highly heterogeneous group of clients – its users include both technologically oriented university graduates as well as small handicraft businesses. A promising business idea and its long-term economic viability are paramount at the time of application. The loan has a term of seven years, carries a nominal interest rate of 5.75 per cent p.a. at present, and provides for a redemption-free period of six months, which can have positive effects in the particularly critical initial phase of the foundation of a company.
Since October 2018, a new version of the Hessen-Mikrodarlehen has been available: "Hessen-MikroCrowd" is a combination of a micro loan and crowdfunding. The cooperation partner of WIBank is Startnext GmbH, an online-based crowdfunding platform for ideas, projects and start-ups in Germany, Austria and Switzerland, on which founders, inventors and creative minds can present their ideas and fund them with the support of other people (= the "Crowd").
Within the scope of the Start-Up-Initiative of the State of Hesse, a third product version is in addition planned to be introduced to the in the range of products for start-up funding "Hessen-Mikrodarlehen" in 1Q 2019.
Wirtschafts- und Infrastrukturbank Hessen (WIBank)
Hesse has pursued a successful funding policy for more than 60 years. Irrespective of whether the funding focuses on the field of trade and industry, residential construction, infrastructure or education; as the promotional bank of the State of Hesse, WIBank is active as a service provider and partner of the Hessian state government in many areas. It bundles nearly the entire public-sector development and funding business and in addition offers its own funding programmes. The individual programmes can be designed in the form of loans, grants, equity or guarantees.
Moreover, it has been entrusted with performing structural tasks - a unique range of responsibilities in the landscape of German promotional banks.
Leiterin Presse und Öffentlichkeitsarbeit
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