This article is part of our special report SME’s Access to Finance.
The Commission will next week extend a €200 million 'social' micro-financing project helping Roma communities in Bulgaria and a company manufacturing fashion handbags in the Netherlands.
The European Progress Microfinance Facility differs from other venture funds in giving small awards and focusing on social groups with limited access to the conventional credit market.
Loans of up to €25,000 are offered through eligible intermediaries to women, youths, minority groups, the disabled and those who would otherwise find access to cash hard to come by.
Managed by the European Investment Fund (EIF) on behalf of the European Commission, the scheme began issuing its funds in February this year.
Beneficiaries of funding initiated since February include underprivileged urban communities in Brussels, Bulgarian sole traders with an outreach to rural areas and the Roma population and female sole traders in Lithuania.
A Dutch microcredit provider participating is funding a new fashion bags and accessories brand set up by a female entrepreneur who found other avenues to finance closed. Similar schemes have been signed with microcredit providers in Poland, Romania, and Cyprus.
Investments are set to be made in Portugal, the UK, Italy, Spain and Slovenia in the coming year.
A spokeswoman for the Commission confirmed to EURACTIV that the support given to microcredit providers under the original facility will be extended beyond 2013 with new resources to be confirmed as part of a package to be proposed by the Commission next week (5 October).
The EU contribution to the facility is €100 million (2010-2013). Out of these €100 million, €25 million are allocated to a 'guarantee part', while the remaining €75 million are used for funded instruments.
The Commission claims that more than €500 million in micro-credit can be leveraged by its investments attracting further funding from third parties.
- 5 October: Commission to propose extension of the Progress Microfinance Facility
EU official documents
- European Commission:Implementation of the European Progress Microfinance Facility — 2010 (11 Apr. 2011) [FR]