the european progress microfinance facility raymond maes european commission employment, social...

The European Progress Microfinance Facility

Raymond MaesEuropean Commission

Employment, Social Affairs & Equal Opportunities

Open days 6 October 2010

Why this initiative?

Part of response to crisis with rising unemployment and social exclusion.

Commission communication June 2009:‘A shared commitment for employment’‘ offer a new chance to the unemployed and

open the road to entrepreneurship for some of Europe’s most disadvantaged groups’

How?

Redeploy and leverage EU resources to:

• Extend range of targeted financial support to new entrepreneurs in the current context of a reduced credit supply.

Gear existing instruments to better:

• Assist (potential) micro-entrepreneurs with mentoring, training and coaching.

What do we aim at?

Creating jobs and fighting exclusionby:

Increasing access to, and availability of, microfinance for:

vulnerable groups (unemployed, disadvantaged people, youth...)

micro-enterprises, especially those in the social economy

How much?

• Union’s contribution € 100 M (2010-2013)

• EIB contribution: up to € 100 M

Expected total ‘leverage’: € 500 M

What are the products?(jointly managed with EIF/EIB)

Guarantees on microcredit portfolios (€ 25 million from EU

resources)

Specialised Investment Fund (SIF) providing:– debt instruments– equity

to be on-lent in the form of microcredits(up to + € 225 million = € 74m from EU + up to € 100m from the EIB + up to € 51m from other investors)

Who are the providers?

Public and private financial intermediaries (MFI); on national, regional and local levels in the EU; providing microcredits to persons/micro-

enterprises in the EU; or guarantees on microcredits in the EU

special investment vehicle

MFIy MFIz

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FBy FBy FByFBz FBz

MFIx

Fund Manager(EIF)

FBz

Agreement between special vehicle and MFI

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beneficiaries

FB=Final Beneficiaries

European Commission

Share holdingin special vehicle

But besides funding…integrated business support is crucial• Delivered in the form of integrated packages of financial,

business and social expertise to starters• Offering advice, training, mentoring and support for

preparing the start into self-employment, and for the first years in business

• Broad range of delivery / support systems:– European Social Fund (ESF) - more than € 2.75 billion for

entrepreneurship– Public employment services - first contact point (local offices and

advisors)– Enterprise Boards - Network of 550 contact points– Non-governmental organisations (NGOs) - reaching out to the

most excluded

The individual’s perspective

Public employment

service or NGO Microfinance provider

(bank or NGO)

4. Training, coaching (European Social Fund)

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Support

Next steps?

• 9-10 November 2010: European Microfinance conference Official launch Microfinance Facility

• Spring 2011: first annual report

• In parallel: development of assistance to business support structures

Thank you!

General information on:

www.ec.europa.eu/epmfInformation for intermediaries:

http://www.eif.europa.eu/(under: Microfinance - European Progress Microfinance Facility)