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Supporting start-up enterprises

Country of implementation
Hungary
General short description of the innovation
95.4% of the beneficiaries would be entrepreneurs were provided support corresponding to the minimum wage for a max. of 6 months, and almost 500 were provided also some capital a smaller or bigger amount of it to start an enterprise.
Target group
Total Population
Policy Field
  • education
  • employment
  • social
  • wage
Type of Policy
  • public
Duration of the policy
2009 -2010
Scope of innovation
  • Scope: : temporary, job creation, answer to the crises
  • Budgets: in 2010 - 2,381.0 million HUF= 7.9 million EUR
  • Number of intended beneficiaries: In 2009 - 6605 head, in 2010 7724 head
  • Spatial coverage: national
General description of (intended) objectives and strategies
The general aim of the measure was to provide assistance to jobseekers contemplating self-employment. The regional NES centres announced tenders for jobseekers in need of assistance to start an enterprise of their own. The centres issued the call for tenders for repayable capital grants and/or non-repayable subsidy corresponding to the lowest minimum wage ever available for a maximum of 6 months. In the first case, i.e. interest-free repayable capital grants,the awarded amount which can be used for investment as well as the replenishment of the current assets must be repaid in five years, after one year of grace. All things considered, there was a rather marked demand for the subsidy equalling the minimum wage from among the two forms. The majority of the circle of eligible applicants, i.e. the registered jobseekers, found it difficult to meet the tender criteria, because they had to finance 20% of all investment or current asset costs / from their own resources, and adequate, in the first place unencumbered, real estate had to be provided as mortgage collateral. In addition, they had to agree to keep up the entrepreneurial activity for 3-5 years. Given the uncertain and frequently changing economic conditions, it was difficult to provide for these conditions. Enterprises started with the help of the grant covered many areas of the national economy; these include entities active in trade, in various services, travel, agricultural original producers, industrial and producer entities. Most applications concern some kind of service provision.The majority of applicants start out as sole proprietors, but some set up a business association or join / an existing entity, or they opt for original producer activities. The main reason for starting an enterprise was the shortage of vacancies, that is, an external constraint, but in the majority of cases the entrepreneurs who started their activities with a grant did not return to the system. / The call for tenders in 2010 was accompanied by a matching subsidised labour market training course to master the skills needed for / enterprising. This course will provide an opportunity to jobseekers with no relevant qualification in business/financial matters to understand the basic terms and conditions of enterprising and to become able to make a thorough business plan already before starting an enterprise. / In several regions (Northern Hungary, Central Transdanubia), jobseekers intending to start an enterprise in the most deprived small regions or settlements were given priority in the assessment process, and the same applied to certain groups of jobseekers (long-term jobseekers, career-starters, persons older than 50). Applicants who wished to start an enterprise in an activity area matching their vocational qualifications also stood a better chance. / In 2010 a total of 7,176 persons were awarded some form of this support. 215 among them were provided capital only; 6,701 subsidy corresponding to the minimum wage only, and 260 both forms together. / /
Nature of the innovation-short-term perspective
short term measure, job creation
Type of ideal-typical strategy for the innovation
  • typical strategy for the innovation (optional; according to Obinger)-encompassing security
Type of innovation
  • new form of policy implementation/delivery
New outputs
  • learning workplaces
Intended target group
All the would be entrepreneurs lacking the necessary initial capital and skills
Working age population
  • employment situation (please specify: e.g. typical work/atypical/unemployed) (unemployed)
  • main source of income: social protection (please specify; e.g. unemployment benefits/disability benefits/social assistance/other benefits) (unemployment benefit or social assistance)
Actors involved in policy-making/implementation and/or evaluation
  • making/implementation and/or evaluation-agency or national social insurance body
  • making/implementation and/or evaluation-beneficiaries/users
  • making/implementation and/or evaluation-central state
  • making/implementation and/or evaluation-employers (organised or individual)
  • making/implementation and/or evaluation-private not-for-profit organisations (e.g. Third Sector organisation or NGO)
Intended output
  • lifelong learning
  • subsidies/tax-credits
  • training schemes
Intended and unintended outcomes
no data for comparison available
Clarification of outcomes in terms of impacting resilience and labour market inclusion
This a job creating active labour market policy, combining training with financial support and coaching support. The long term unemployed became self-employed and created jobs for other people as well.
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