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Reform of Subsidies for business start-up

Country of implementation
Hungary
General short description of the innovation
The aim of the scheme is to promote entrepreneurship and skills, and to encourage unemployed people to set up their own business. To this end, as of 2007 the two previous measures were merged into a new scheme with slightly altered conditions. The new scheme provides: / ? up to 3 million Forints interest-free loan or non-repayable grant, and / ? a monthly allowance of up to the minimum wage for a period of no longer than six months, regardless of eligibility for job search bene?t. /
Target group
Total Population
Policy Field
  • employment
Type of Policy
  • public
Duration of the policy
2007
Scope of innovation
  • Scope: temporary
  • Spatial coverage: national
General description of (intended) objectives and strategies
Prior to January 1, 2007 business start-up was supported by two schemes: the business start-up scheme for unemployed persons and the self-employment scheme for unemployed persons. The ?rst scheme supported persons who were eligible for job search bene?t, except for disabled persons who were eligible regardless of their status. The scheme, in addition to a monthly sum equal to the amount of job search bene?t, provided a contribution to the cost of entre-preneurship training, consultancy, mortgage and credit repayment insurance. / The second scheme provided an interest-free loan of up to 3 million Forints to support self-employment. / The aim of the scheme is to promote entrepreneurship and skills, and to encourage unemployed people to set up their own business. To this end, as of 2007 the two previous measures were merged into a new scheme with slightly altered conditions. The new scheme provides: / ? up to 3 million Forints interest-free loan or non-repayable grant, and / ? a monthly allowance of up to the minimum wage for a period of no longer than six months, regardless of eligibility for job search bene?t. / The bene?ciary of the scheme is the individual job seeker and therefore it is not considered state aid. Persons are eligible for the business start-up subsidy if they have been registered with the Public Employment Service as unemployed for at least 3 months. The recipients shall either become self-employed, set up a business or be a self-employed farmer.The two components can be awarded separately or together. To be eligible for the interest-free loan the bene?ciary job seeker must provide at least 20 per cent of their own contribution to the total cost of capital investment and adequate collateral (e.g. assets, real estate, bank guarantee) for the repayment of the loan. / / / http://econ.core.hu/file/download/HLM2005/TheHungarianLabourMarket_2008_onefile.pdf, p157 /
Nature of the innovation-short-term perspective
Promote entrepreneurship and skills, and to encourage unemployed people to set up their own business through business start-up scheme and the self-employment scheme
Nature of the innovation-long-term perspective
Promote activation of unemployed people and increase labour market participation
Type of ideal-typical strategy for the innovation
  • others (activation)
Type of innovation
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • others (Subsidies for business start-up)
Intended target group
Unemployed
Working age population
  • employment situation (unemployed)
Actors involved in policy-making/implementation and/or evaluation
  • beneficiaries/users (unemployed)
Intended output
  • others (Subsidies for business start-up)
Did the innovation have any outcome related to job quantity?
lower
Clarification of outcomes in terms of impacting resilience and labour market inclusion
to promote entrepreneurship and skills, and to encourage unemployed people to set up their own business
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