£200 Million in Pot to Support Microbusinesses

Eupoe is mobilising €237 million – that’s close to £200 million – in loans to support 20,000 micro-businesses in 28 countries, including Britain and Northern Ireland.

Its new European Programme for Employment and Social Innovation (EaSI for short) is backed by cash from the European Investment Fund and will help leverage loans to start-ups and social enterprises, sometimes at rates of interest at less than one per cent.

And six micro-finance institutions, including one in the Republic, signed guarantee agreements in Brussels yesterday that will open up access to finance for the smallest of businesses, which often draw a blank when trying to source funding via traditional bank means.

It coincides with more than 20 events taking place across Europe today, under the tagline ‘What if we could turn job seekers into job creators?’ to showcase how micro-finance supports European citizens, the unemployed or those excluded from the traditional financial sector.

Acccording to the latest overview of the micro-credit sector in the EU, more than 125,000 European citizens became micro-entrepreneurs since 2013, and the micro-finance sector in Europe had an impact on at least 250,000 jobs by its lending activity.

“Micro-finance will develop in a very important way in the future as a complementary partner of the bank sector which, due to its regulatory frameworks, cannot always reach the most deprived,” said Patrick Sapy, president of the European Micro-finance Network (EMN).

“Our societies absolutely need to have access to micro-finance.”

Among the first deals enabling loans contracts to micro-enterprises is one signed between the European Investment Fund (EIF), which is part of the European Investment Bank group, and Microfinance Ireland, which was created in 2012 in response to the economic crisis and collapse of the banks.

“We take the risks conventional lenders don’t, and our key outcome is measured in the jobs we support,” its chief executive Michael Johnson said.

Microfinance Ireland has already approved lending of €11 million and supported 700 small enterprises in Ireland, sustaining more than 1,600 jobs.

“We’re investing in people. Half of our decision-making it based on the person and the rest on the numbers,” Mr Johnson said.

“But we could not have made these achievements without the help of European money.”

The European Commission will contribute with €17 million to the guarantees signed yesterday, which is expected to result in micro-loans worth €237 million.

Marianne Thyssen, Europe’s Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: “I congratulate the six micro-credit providers which are signing their guarantee agreements and easing access to finance for new micro-enterprises.

“Micro finance is an essential instrument to promote entrepreneurship and fight against social and financial exclusion. We are committed to creating growth and jobs and today we are delivering concretely on this priority.”

On an eve of European Microfinance Day reception in Brussels last night, the initiative was endorsed by Queen Mathilde of Belgium, who met a number of female entrepreneurs including Miena Rust of Miena’s Handmade Nougat Company based in the Wicklow Mountains.

Supported by Microfinance Ireland, her luxury nougat business, set up in 2012, employs two people and supplies a number of multiples and independent stores across the island.

In total, the EaSI guarantee of €96 million is expected to provide a leverage of more than €500 million in loans over the 2014-2020 period in order to promote jobs and growth in Europe for the next 15 years, unlocking a total of 30,800 micro-loans and 1,000 loans to social enterprises.

Source: irishnews.com