Andor praises EU microfinance funding for start-ups
The second annual report into the EU's European Progress Microfinance Facility was praised by Commissioner of Employment, Social Affairs and Inclusion László Ando, "Progress Microfinance is clearly an effective facility both for microfinance providers and entrepreneurs. By providing access to microfinance to create jobs, particularly for disadvantaged people, the Facility has proved to be an important social investment tool that should continue in the future."
The European Progress Microfinance Facility launched together with the European Investment Bank Group at the end of 2010 to help people who would otherwise have difficulties getting a loan to start or develop their own business by providing access to finance. It also gives incentives to serve "risky" target groups e.g. young people who cannot put up sufficient collateral for a traditional bank loan. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc.
The facility provides guarantees and funded instruments to microfinance intermediaries. The €203 million funding for the initiative comes from the European Commission and the European Investment Bank (EIB) for the programming period 2010–13.
Progress Microfinance provides loans of up to €25,000 and aims to generate a total loan volume of €500 million for 46,000 micro-borrowers across Europe until 2019.
The Commission listed examples of successful loans; a young Portuguese waiter, who had been working under precarious conditions in a restaurant for several years, was able to start his own restaurant in the South of Portugal thanks to a microloan from Millennium BCP with a Progress Microfinance guarantee; a Romanian couple who, after losing their jobs in a mining company, successfully started a farm thanks to a microloan from Patria Credit and, a Spanish lady was able to open a hairdressing salon in Murcia thanks to a small loan from ICREF/Mare Nostrum and so re-enter the labour market, after a childcare break of several years.