Brussels, 10 September 2008
The European Commission and the EIB Group launch the JASMINE initiative to develop micro- finance institutions in Europe in support of growth and employment
Danuta Hübner, Commissioner for Regional Policy, is attending the closing session of the annual conference of the European Micro-finance Network in Nice, France, organised under the auspices of the French Presidency of the European Union. Micro-finance institutions have chosen this year to review the initiative launched by the European Commission in November 2007 for the development of micro-finance in support of growth and employment. On this occasion, Danuta Hübner announced the launch of a new instrument to increase the range of micro-finance available in Europe.
"Micro-finance provides an opportunity that must not be missed to generate growth and jobs in Europe, as advocated in the Lisbon Strategy. There is currently a sizeable gap between the amount of micro-finance available in Europe, which is completely insufficient, and the number of persons wishing to create or develop their businesses but who lack access to traditional bank financing. The European Union is therefore launching an original initiative to give fresh impetus to this sector," commented Ms Hübner.
The European Commission and the EIB Group (the European Investment Bank and the European Investment Fund) have developed a joint action known by the acronym JASMINE (Joint Action to Support Micro-finance Institutions in Europe).
• This initiative provides, on the one hand, for the provision of technical assistance to micro-finance institutions (MFIs) to help them to become credible financial intermediaries and obtain capital more easily. The "JASMINE" unit to be created within the European Investment Fund (EIF) will be responsible for vetting the business plans of applicant MFIs and helping them to achieve a high level of quality as regards their governance, financial management and commercial policy. The aim is to motivate these institutions to adopt good practices so that they can be awarded quality labels. JASMINE will also help to create training courses and publicity campaigns on the European micro-finance initiative for the Member States, the regions, the banks and micro-finance institutions.
• Another aspect is to finance operations by the most promising non-bank institutions so that they can grant more loans to project promoters. The JASMINE unit will examine the viability of applications and will make proposals concerning the cofinancing of these operations by the EIB and private partners.
The original feature of JASMINE is that it brings together several EU Institutions (the Commission, the EIB, Parliament), public and private banks, the EUROFI network (think tank on European financial and banking services) and donors. The project is due to start in early 2009 with a pilot phase that should last for three years. The project's start-up capital will be some 50 million euros. The European Commission and the EIF will contribute to implementing this initiative by committing the resources available under the cohesion policy and funds made available by the EIB/EIF Group and other financial partners.
JASMINE is one of the actions announced in the Communication on the development of micro-finance in Europe adopted by the European Commission in November 2007 (see IP/07/1713). It complements the JEREMIE initiative launched jointly by the European Commission and the EIB in 2006, which allows the Member States and regions of the EU to transform part of their Structural Fund allocations into financial products designed specifically for small and medium-sized enterprises.
According to estimates based on Eurostat data, the potential demand for micro-finance in the EU could be for more than 700 000 new loans, representing a total of some 6.3 billion euros in the short term. People excluded from traditional financial services are the main users of this form of micro-finance. New providers therefore need to be found: micro-finance institutions are good intermediaries but they lack capital.
The conference of the European Micro-finance Network in Nice is being attended by around 400 participants, representing banks and researchers, professionals in the sector, investors, regional or national government representatives, representatives of the European Commission, policy-makers and the private sector.
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