The European Union, the European Investment Bank (EIB) and the European Investment Fund (EIF) have launched a EUR 200 million loan fund to support lending to micro-enterprises and social enterprises under the EU Programme for Employment and Social Innovation (EaSI) as shown in the press release of the European Investment Bank.
In line with the EU’s policy objectives, the fund will promote microfinance and social entrepreneurship in EU Member States and other participating countries, by encouraging microfinance institutions and social enterprise lenders to increase funding for micro-enterprises as well as social enterprises as a means of supporting financial and social inclusion.
The loan fund will provide senior and subordinated loans to microfinance institutions and social enterprise lenders in order to boosting their lending capacity. It expands the range of EU level financial instruments available under the EaSI programme, which so far included guarantees and (quasi-) equity investments.
The contribution from the European Union is allocated from the budget of the EU Programme for Employment and Social Innovation (EaSI), a programme designed to promote a high level of quality and sustainable employment, to guarantee adequate and decent social protection, to combat social exclusion and poverty and to improve working conditions across Europe, including by means of financial instruments.
According to the same source, the EU does not provide direct financial support to enterprises but instead implements the instrument through local financial intermediaries, such as microfinance institutions and social enterprise lenders active across the 28 EU Member States and additional participating countries.
The EaSI programme aims to support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, through notably loans of up to EUR 25 000 and social enterprises through investments of up to EUR 500 000. The microfinance and social entrepreneurship support is being implemented through three EU level instruments.
For further information: European Investment Bank