Unlocking the Potential of the Financial Intermediary System in Development Policy: A Focus on Regional Development

The purpose of this study is to shed light on the possibilities of higher-level development policy involvement of the financial intermediary institutional system, with particular regard to regional development. The investigation was primarily based on the analysis of the Hungarian financial intermediary system of refundable subsidies from the European Union that operated from 2007 through 2013. The reason for this is that, in terms of the diversity of the institutional system, both concerning the preceding and the 2014-2020 development cycle, this period had the highest diversity of institutions mediating subsidies, which plays a crucial role in the development of solutions that are more precisely suited to the financing needs of the final beneficiaries. After reviewing the available literature and development policy documents, I applied a research method based on a Delphi analysis. The investigation revealed a new finding: the market experience of the institutions' experts was the key factor in the successful placement of intermediary institutions' resources. This aspect had not been previously highlighted in evaluations or literature findings. In addition, the research pointed out, among other things, that for more optimal use of financial instruments for cohesion purposes, an integrated policy mix should be created at a higher level, including primarily the social and financial sectors, as well as the territorial development policy. All this would enable the introduction of combined support products at the implementation level, linking financial instruments with other non-financial types of support. For example, loan or guarantee products could be supplemented with consultancy, education, or mentoring support (especially concerning management, organization development, and strategic planning).