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Mr. László ANDOR

Commissioner for Employment, Social Affairs and Inclusion

"Stepping up EU support for microfinance"

Conference on Microfinance in Europe

Brussels, 9 November 2010

Deputy Prime Minister Milquet,


Ladies and Gentlemen,

It is a pleasure for me to be here today at this conference on Microfinance in Europe. Its objective, as you know, is to discuss the best ways to achieve an integrated EU approach to supporting microfinance and promoting entrepreneurship. This first and foremost requires coordination inside the Commission and I would like to take the opportunity to thank colleagues from all services who have worked hard to make these two days possible.

Our challenge today is clear. We need to tackle the impact of the crisis by doing more with less. And we need to lay down the basis for a lasting recovery. There is a broad consensus that this requires building a new economic model, where economic growth needs to be:

  • smart - in other words, driven by knowledge and innovation;

  • environmentally sustainable and

  • socially inclusive - that means capable of fostering high levels of employment and social cohesion.

Key developments at EU-level

Under the new Europe 2020 strategy, ambitious policy targets have been agreed and the Commission is committed to doing its utmost to support the Member States in their efforts to reach them through a number of flagship initiatives.

Three of them fall under my areas of responsibility as Commissioner for employment, social affairs and inclusion.

First, 'Youth on the move', sets out a number of actions to improve the very difficult situation for young people on the labour market.

Second, an 'Agenda for New Skills and Jobs' which I will present on 23 November. will identify measures to promote the development of people's skills in order to foster employability and raise employment rates. It will also focus on flexicurity as a key concept for improving labour market performance, not least for the most vulnerable groups.

Third, I will present a 'European Platform against Poverty' before the end of the year. The Platform will outline how we can work together to reduce poverty and achieve more social inclusion.

Crucially, all of these flagship initiatives include or will include entrepreneurship, self-employment and microfinance as essential elements.

Why is entrepreneurship important ?

Ladies and Gentlemen,

Over the last few years we have seen a sharp rise in the number of people who have lost their jobs or who are in vulnerable positions. The crisis has shown that we need to develop new ways of creating sustainable employment.

In this context, self-employment and entrepreneurship is one of the pathways to more and better jobs. Indeed, for some people who are furthest from the labour market self-employment is one of the ways to get back into work.

Data has shown that an important proportion of business starters - between 20 and 50% - are unemployed or inactive individuals.

Moreover, some of these businesses do not require high skills – for example, small shops and services, or food processing by small scale farmers.

In many cases, self-employment is not inferior to wage employment in terms of earnings, working conditions and working time. It also often offers greater job satisfaction and gives people a strong feeling of being more in control of their work.

The results of an EU-wide survey on entrepreneurship, published by the Commission in the summer, indeed show that 45% of all Europeans would like to be their own boss if they could, but that many are held back by a difficult access to finance the starting up of a business.

The importance of micro-loans

A key way to promote entrepreneurship is to increase the availability of microloans for those who want to start up or further develop their own enterprise but do not have access to traditional banking loans.

Most people know microfinance from the Grameen bank and projects in developing countries. But, over the last decade microfinance has also carved out a place in entrepreneurial support across the EU - especially during this recent period of economic difficulty.

Even before the crisis in 2007, the Commission estimated the total demand for microloans in the EU to be 6.6 billion euros. And the crisis is likely to have increased this demand. Despite this, the availability and accessibility of credit has decreased.

EU micro-loans

That is why the Commission proposed the European Progress Microfinance Facility.

Progress Microfinance builds on EU initiatives that have developed so far to strengthen microfinance in the EU. Here, I’m thinking in particular of the JASMINE programme and the Competitiveness and Innovation Framework Programme (CIP) microloan window.

The Progress Microfinance Facility brings EU support to microfinance to another level.

Both the EU and the European Investment Bank have committed themselves to contributing 100 million euros each to the fund. This, together with potential contributions from third investors, means that we hope to provide around 500 million euros to microloans over the coming ten years.

Furthermore, as from July of this year the guarantees window of Progress Microfinance has become operational. I am pleased to announce that the loan and equity provision to intermediaries will start this month.

And the first microloans supported by Progress Microfinance will be provided within two months time.

However, increasing the availability and accessibility of microloans is only part of the answer. To be effective, financial support through Progress Microfinance must be complemented and integrated with tailor-made guidance, training and coaching for micro-entrepreneurs.

This is where the European Social Fund can play an important role, providing accompanying measures to business starters and micro enterprises

It can provide training and coaching for current and future micro-entrepreneurs as part of its core activities or as part of specially designed operations for micro-entrepreneurs.

The Commission will set up a support scheme for ESF managing authorities and other actors to provide advice on how to design support services for micro-entrepreneurs.

Minister Milquet,

Ladies and Gentlemen,

The different departments of the Commission work hand in hand to provide a coherent support package for entrepreneurship and self-employment at EU level. Today’s joint conference is an illustration of this cooperation.

Nonetheless, while coherent and effective EU support is important, the strongest results come from activities developed at national, regional and local level.

I hope that this conference leads to new ideas and inspires all of us to further develop cooperation and partnership between all actors involved in the complex area of entrepreneurship support.

I can assure that for our part, the Commission will continue to encourage, facilitate and support a strengthened role for entrepreneurship and self-employment in creating jobs and fighting exclusion.

Thank you for your attention.

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