The Hague, 11 February 2011
First of new EU microfinance projects gets off the ground in The Netherlands
Access to credit is a major concern for many EU companies, in particular for Small and Medium Entreprises (SMEs) and for entrepreneurs who want to start their own business or get new projects off the ground. Without financing, companies and entrepreneurs can lose out on important employment opportunities. This has become even more worrying in the current economic context. That is why the European Commission has today, jointly with the European Investment Fund (EIF), launched the first EU microfinance project in the Netherlands. This EU-wide initiative will allocate various European funds to the Dutch Microfinance Institution Qredits to facilitate loans of over EUR 20 million to small businesses and people in the Netherlands who have lost their jobs and want to set up their own company. As part of the EU's Europe 2020 strategy for smart, sustainable and inclusive growth, the EU Microfinance Facility is one of the concrete actions taken at European level to address the consequences of the crisis (IP/09/1070)
Princess Máxima of the Netherlands, EU Commissioner for Employment, Social Affairs and Inclusion László Andor, Dutch Deputy Prime Minister Maxime Verhagen and EIF's Chief Executive Richard Pelly all attended today's launch event.
Speaking to journalists, Commissioner Andor said "This new Microfinance Facility will help boost entrepreneurship and the social economy in Europe. Its core aim is to create jobs and specifically help vulnerable groups find an alternative route out of unemployment. Over the next eight years, we hope to provide small loans to around 45,000 European entrepreneurs. "
At the event, the Chief Executive of the European Investment Fund (EIF), Mr Richard Pelly, and Managing Director of Qredits, Mr Elwin Groenevelt signed a guarantee agreement and loan deal which will facilitate the provision of the EUR 20 million loan, through Qredits, to micro-entrepreneurs in the Netherlands. Qredits hopes to extend support under EUR 25,000 to over 1,000 small businesses in the Netherlands, many of whom are higher risk borrowers and often face difficulties in accessing credit from traditional banking sources.
The European Progress Microfinance Facility (Progress Microfinance) is a new initiative established with EUR 200 million of funding from the European Commission and the European Investment Bank Group, managed by the European Investment Fund (EIF). Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. The facility aims to make it easier for people who might have difficulties in accessing funds for business start-ups. Although it has a particular focus on groups with limited access to the conventional credit market, it is not restricted to these. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc.
Financial products (micro-credit guarantees and funded instruments) are made available through eligible intermediaries such as Qredits participating in the facility. Through the European Progress Microfinance Facility, the European Investment Fund provides a guarantee to institutions like Qredits, enabling it to lend to micro-entrepreneurs.
Micro-credit in the EU means loans under €25,000. It is tailored to micro-enterprises, employing fewer than 10 people (91% of all European businesses), and unemployed or inactive people who want to go into self-employment but do not have access to traditional banking services. 99% of start-ups in Europe are micro or small enterprises and one third of these are launched by people who are unemployed.
About European Progress Microfinance Facility: http://ec.europa.eu/epmf
About the EIF: http://www.eif.org
About Qredits: www.qredits.nl