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Mr. László ANDOR

EU Commissioner responsible for Employment, Social Affairs and Inclusion

"First of new EU microfinance projects gets off the ground"

Signing ceremony with Qredits

The Hague, 11 February 2011

Your Royal Highness,


Distinguished guests,

Ladies and gentlemen,

Today's event comes at a point when the European Union is slowly beginning to emerge from the economic crisis.

While we must continue our efforts to sustain growth, we do not want growth at any cost. Instead, we want growth to be:

  • Smart, in other words driven by knowledge and innovation;

  • sustainable and

  • socially inclusive to foster high employment and social cohesion;

Entrepreneurship will be a vital element in achieving this triple goal. However, to date, Europe is far from exploiting its full potential.

In the USA, every tenth adult starts their own business. In Europe, it is only one out of every twenty. And yet a recent survey revealed that 45% of all Europeans would like to be their own boss if they could.

It is clear that we need to make changes. We cannot afford to waste talent, in particular given that:

  • first, a significant proportion of business starters - between 20 and 50% - are unemployed or inactive individuals; and

  • second, starting a business offers some of the people furthest from the labour market a real possibility to go back to work.

That is why entrepreneurship and self-employment form a key part of Europe 2020.

Ladies and gentlemen,

Lack of finance is among the most important reasons that hold back European business starters. One clear way to promote entrepreneurship is to increase the availability of microcredit for those who want to start up or further develop their own enterprise but do not have access to traditional banking loans.

According to our findings, supply of micro-credit is lagging well behind demand. Even before the crisis, the gap was estimated at around seven thousand micro-loans, in other words, at least 6.3 billion euro.

Since the crisis, the availability and accessibility of credit has further decreased - especially for the more vulnerable groups in society. The EU has responded to this problem by setting up the European Progress Microfinance Facility.

With an EU contribution of EUR 100 million and another EUR 100 million from the European Investment Bank, we expect to be able to fund 46 000 loans throughout the EU over the next ten years, totalling EUR 500 million.

This clearly illustrates how much of an impact the EU budget can have on the lives of European citizens. The Commission is determined to increase the role of financial engineering in the new financial period; that is to say after 2013. Microfinance support will certainly continue to be part of that and we will build on the experience of the Progress Microfinance Facility.

Ladies and gentlemen,

Today is an important moment. I am very proud to witness the signature of the very first contract under this instrument.

Funds made available from the European Union budget and managed by the European Investment Fund will guarantee the microloans that Qredits will give out to people who want to start or further develop their own business.

By covering part of the risk, Progress Microfinance allows Qredits to provide funding for people who are not able to provide sufficient collateral for a 'traditional' loan.

Furthermore, by the end of this month, the second contract will be officially signed in Belgium and the European Investment Fund (EIF) is preparing another 14 transactions to be signed throughout the European Union in the course of the year.

However, guarantees and funding alone are not enough. We need to continue to build up the capacity of microfinance providers - especially non-banking ones – in order to increase the provision of micro-credit in the EU.

In addition, micro-lending is not just a question of disbursing small size loans to a client; it is essential that the loan is accompanied by advisory services. That is why the Commission has established the JASMINE initiative. It offers funding to microfinance providers to support their development and help them reach sustainability.

Today, as part of JASMINE, Qredits will sign a second contract with the European Investment Fund that will help build up its infrastructure, by hiring an additional six loan officers and enhancing its IT system.

Ladies and gentlemen,

We must also look at strengthening the capacity of entrepreneurs and potential entrepreneurs.

As I have already mentioned, advice and training are vital. A key instrument here is the European Social Fund, which can be used to finance training and coaching for current and future micro-entrepreneurs.

Over the coming year, the Commission will provide assistance to ESF managing authorities and other actors to help improve the business-support services provided to vulnerable groups.

The EU does not only refer to entrepreneurship in its policy documents; it provides concrete support to all actors involved in making entrepreneurship a source of jobs and social inclusion. And in my mind, the contract signed today with Qredits illustrates this clearly.

Thank you for your attention

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