To promote jobs and growth in Europe, social and micro-enterprises will soon have access to over €500 million in finance. This is the result of a new mandate agreement signed today between the European Commission and the European Investment Fund (EIF). Support will be made available under the European Programme for Employment and Social Innovation (EaSI), which will provide a €96 million guarantee for the period 2014-2020 which is expected to mobilise over €500 million in loans. The programme targets individuals who wish to start or further develop their own social and micro-enterprises, in particular, people who have difficulties in entering the job market or in accessing finance.
Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: “With the support of our funding, tens of thousands of jobs will be created. By easing access to finance, new enterprises will be set up and existing ones will be scaled up. The programme we are launching today is a clear expression of the Commission’s firm commitment to create jobs and growth and improve social conditions.”
EIF Deputy Chief Executive, Marjut Santoni said: “The agreement signed today with the European Commission enables the EIF to support even more micro-enterprises across Europe over the next 7 years. This programme builds on the successful EU Progress Microfinance Initiative, EaSI’s predecessor, through which 50 of our cooperation partners across more than 20 EU countries, mobilised financing for more than 30,000 disadvantaged micro-entrepreneurs, many of which were previously unemployed.”
The guarantee for microfinance or social finance providers is managed and implemented by the EIF on behalf of the European Commission. The €96 million EaSI Guarantee will offer credit risk protection for lending products provided to social and micro-enterprises. The previous Progress Microfinance initiative helped to create and preserve more than 47,000 jobs. EaSI will build on its successes.
The EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, such as microfinance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal directly with interested parties to provide support under the facility.
About the European Investment Fund
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over €8.8 billion at the end of 2014. With investments in over 500 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF’s guarantees loan portfolio totalled over €5.6 billion in over 350 operations at end 2014, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About the Programme for Employment and Social Innovation
Under the European Programme for Employment and Social Innovation (EaSI), the European Commission supports microfinance and social entrepreneurship finance with an overall envelope of €193 million for the period 2014-2020. The aim is to increase access to microfinance, i.e. loans of up to €25 000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the European Commission will also support social enterprises through investments of up to €500 000. The microfinance and social entrepreneurship support will be first implemented through the EaSI Guarantee, which shall enable microcredit providers and social enterprise investors to reach out to entrepreneurs they would not have been able to finance otherwise for risk considerations. The European Commission has selected the EIF to implement the EaSI Guarantee.