The European Commission, the European Union’s executive body; the European Investment Fund (EIF), an EU-affiliated provider of finance to organizations that lend to small and medium-sized enterprises (SMEs); and six European microfinance institutions (MFIs) recently signed guarantee agreements under the European Programme for Employment and Social Innovation (EaSI), an initiative that supports “the modernisation of employment and social policies,”[3] job mobility, microfinance, microenterprises and social inclusion in the European Union. The guarantee agreements will enable approximately 20,000 microenterprises to access EUR 237 million (USD 261 million) in loans through the partner MFIs: Association pour le Droit à l’Initiative Economique of France; Laboral Kutxa/Caja Laboral Popular of Spain; Microfinance Ireland; Nextebank of Romania; PerMicro of Italy and Qredits Microfinanciering of the Netherlands. It is anticipated that the beneficiaries will include individuals who face challenges of entering the labour market and accessing commerical finance.
Marianne Thyssen, the Commissioner for Employment, Social Affairs, Skills and Labour Mobility of the European Commission, said that “[…] Microfinance is an essential instrument to promote entrepreneurship and fight against social and financial exclusion”[1]. Pier Luigi Gilibert, the chief executive officer of EIF, added that “[…] EUR 237 million [USD 261 million] provides a boost to the microfinance sector and will help to support disadvantaged micro-entrepreneurs, many of which were previously unemployed. I am also pleased that we are concluding agreements with these institutions today, many of whom have successfully deployed EU microfinance support in recent years. We also expect to sign similar transactions in the coming months”[1].
EaSI is managed by the European Commission and it is implemented by EIF. Its guarantees are expected to leverage approximately EUR 920 million (USD 1 billion) in loans through local intermediaries including MFIs and banks in the European Union between 2014 and 2020 [3].
By Alíz Crowley, Research Associate
About European Commission
The European Commission (EC), founded in 1951, is the executive body of the European Union (EU). It is responsible for proposing legislation, implementing decisions, upholding the EU’s treaties and the day-to-day running of the EU. EC has its headquarters in Belgium and also operates offices in Luxembourg as well as “representations” in all EU countries.
About European Investment Fund (EIF)
The European Investment Fund (EIF) is a provider of risk finance to organizations that lend to small and medium-sized enterprises (SME) in Europe. The fund is a public-private partnership whose shareholding structure, as of 2014, includes the European Investment Bank (65.1 percent equity); the European Union (EU) as represented by the European Commission (24.3 percent); and 24 financial institutions from EU member states plus Turkey. EIF is a member of the EIB Group, the parent organization of the European Investment Bank (EIB). As of 2015, EIF has total total authorized capital of EUR 4.5 billion (USD 5 billion).
Sources and Additional Resources
[1] European Investment Fund, EIF and the European Commission mobilise EUR 237m in loans to support 20,000 European micro-enterprises
[2] European Investment Fund, EIF corporate brochure – EIF’s support for entrepreneurship and innovation in Europe
[3] European Commission, EU Programme for Employment and Social Innovation (EaSI)
MicroCapital Universe Profile: European Commission
MicroCapital Universe Profile: European Investment Fund (EIF)
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