EPMF - European Progress Microfinance Facility
On 2 July 2009 the European Commission proposed to set up a new microfinance facility providing microcredit to small businesses and to people who have lost their jobs and want to start their own small businesses. However the proposal has yet to be agreed by the Council or Parliament.
The proposal envisages an initial budget of €100 million, taken from the Progress programme, which could leverage more than €500 million in a joint initiative with international financial institutions, in particular the European Investment Bank (EIB) Group. The new facility is one of the actions announced in the Commission's communication: A Shared commitment for employment on 3 June (see IP/09/859 and MEMO/09/259).
The current economic downturn started as a financial crisis prompted by severe liquidity problems: banks stopped lending to each other and also stopped lending to people to do business and create jobs. The new microfinance facility aims to make it easier for people who, in the current context of reduced credit supply, might have difficulties in accessing funds for business start-ups.
Workers who have lost their jobs or are at risk of losing them and want to establish their own businesses will have better access to funds and benefit from additional support measures such as mentoring, training and coaching. Disadvantaged people, including the young, who want to start or further develop their own small businesses, will also benefit from guarantees and assistance in preparing a business plan.
The fund could result in around 45,000 loans over a period of up to eight years. In addition, the possibility to apply to the loans interest rate rebates from the ESF will make it easier for people to access the funds.
Microcredit in the EU means loans under €25,000. It is tailored to micro-enterprises, employing fewer than 10 people (91% of all European businesses), and unemployed or inactive people who want to go into self-employment but do not have access to traditional banking services. 99% of start-ups in Europe are micro or small enterprises and one third of these are launched by people who are unemployed.
The Commission expects the new 'European Progress Microfinance Facility' to be operational in 2010.
Commission press release: http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=547&furtherNews=yes
Providers in 2012
By 2012 the initiative had been taken up in nine countries: http://ec.europa.eu/social/main.jsp?catId=983&langId=en