According to the Hungarian SBA Fact Sheet the supporting ecosystem of the companies in crises is very poor. On the basis of results of REBORN project and a nation-wide survey regarding second chance possibilities Ministry of Innovation and Technology was open to participate on a meeting series about this problem and the possible solutions.
IFKA has initiated a series of consultations with the Ministry and different other relevant stakeholders to collect information about the tools that can be used to improve the situation and to help restarting entreprenuers. Due to the talks and events a new call for proposal’s idea was formed which was launched in the beginning of January 2020.
In Hungary, 5-6 thousand companies and 30-50 thousand jobs are lost every year due to drifting into crisis and then insolvency. This would mean a loss of billions of forints to the economy, although some businesses could be rescued based on international experience. EU Restructuring and Insolvency Resolution Directive 2019/1023, issued in June 2019 now reduces the grace period for individual countries: every EU member must take action at systemic level to ensure the reorganization of its businesses that are in crises or already in a state of insolvency. Also the Hungarian SBA (Small Business Act) Fact Sheet emphasized in 2018 that the supporting ecosystem of companies in crises and restarting entrepreneurs is weak.
That is why IFKA has initiated a series of consultations in 2019 with the Ministry of Innovation and Technology and different other relevant stakeholders to collect information about the tools that can be used to improve the situation and to help restarting entrepreneurs. The aim of the meetings was to share ideas and experiences regarding how to support second chance entrepreneurs and entrepreneurs in distress. Participants were highly interested in the method of engaging entrepreneurs in crisis to diagnose and of the whole supporting process. They shared recent experiences and opinion about the lack of trust in consultants and in consultancy procedure in Hungarian culture. Due to the talks and events a new call for proposal’s idea was formed.
During the meetings the following topics were arised:
• It is necessary to examine the effective supporting methods in other European countires
• One of the first steps should be to define the stakeholders of a restarting entrepreneurs’ supporting system in Hungary
• The bank sector is a key stakeholder in the project
• We should revise the insolvency law
The new call for proposal called GINOP-1.1.10: IMPROVING THE COMPETITIVENESS OF MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES TO ENHANCE COMPANY KNOWLEDGE was announced in the beginning of January 2020. In this call’s focus there are the supporting methods of family businesses and entrepreneurs in crises or distress. The program will be implemented by IFKA in the next two years.