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European Commission

László ANDOR

European Commissioner responsible for Employment, Social Affairs and Inclusion

Using microfinance to help to integrate Roma

Conference of the Kiútprogram - Brussels, 4 September 2012

Ladies and Gentlemen,

I am pleased to be here with you at the closing conference of "Kiútprogram" pilot project. I have closely followed the implementation of this project which is a pioneering venture from that we could learn.

This program is also a good example how the European institutions can work together to stimulate changes on the ground, like launching common initiatives.

In June, I took part in another closing conference of the pilot project on "early childhood education and care". Both of these pilot projects may contribute to solutions for the serious social and economic problems faced by the Roma, who very often are the victims of social exclusion and discrimination, even regarding their access to the labour market.

Ladies and gentlemen,

The Commission has succeeded in putting Roma integration high not only on the EU's political agenda but also on Member States' national agendas to address this problem in European dimension.

Indeed, the Commission called the Member States to prepare National Roma Integration Strategies which have been assessed by the Commission. This is already an important step in the process for Roma social and economic inclusion.

Through the process the Commission has encouraged the 'integrated approach' that combines actions across all the key sectors playing an important role in lasting results for Roma integration, such as employment, education, health and housing. The measures in these fields are successful if they are mainstreamed and embedded into a non-discriminatory practice.

All Member States have acknowledged 'employment' as a priority area in their National Roma Strategy. We have examples of countries, such as Spain, that proposed positive policy actions in this area worth learning from. However, only 11 Member States have paid attention to provide access to micro-credit.

I thank the organisers for presenting the initiative today to reflect on the Kiútprogram achievements and lessons for the future. I believe that these experiences need to be used in those Member States where the micro-credit instrument has not been applied for the integration of disadvantaged groups into the labour market. Nevertheless, the 11 Member States, including Hungary, should take further efforts to successfully use microcredit practices.

The Commission considers Hungary as a positive example of proposing policy actions for Roma integration. Specifically, the Hungarian Government set out in its national strategy ambitious targets for raising employment in a systematic way, based on 3 pillars:

  • integration in an open and legal labour market through active labour market policies

  • social economy and

  • public employment schemes for the most disadvantaged.

Hungary has acknowledged the importance of microcredit programmes. However, I would welcome a stronger focus on reintegration in the open labour market by developing even more concrete measures in the area of self-employment and microfinance.

Indeed, social microfinance could be a successful tool to create jobs, particularly amongst groups with difficulties to raise finance from more traditional sources, such as Roma.

I strongly encourage the continuation of microfinance on the EU level to address this demand and to bring the EU microfinance market to maturity.

Therefore, the European Commission aims to continue microfinance support in the next financial period under the proposed Programme for Social Change and Innovation (PSCI). Like the EU's current Progress Microfinance Facility, the PSCI would be complementary to inclusive entrepreneurship policies under the European Social Fund. The European Social Fund can, for instance, finance business development services that help start-ups to acquire the necessary skills for running their business.

In addition, the new programme would allow for capacity building of microfinance institutions to develop the European microfinance market. It would also support social enterprises, which are businesses whose primary purpose is to achieve a social impact and drive social change, thus making a valuable contribution to the Europe 2020 Strategy.

The current Progress Microfinance Facility has proved to be an important social investment tool that should continue in the future.

The results of Progress Microfinance Facility are encouraging: until now, transactions have been signed with 20 microcredit providers in 14 Member States. Hundreds of entrepreneurs, many from vulnerable groups, have already benefitted from the micro-credits offered. Some microfinance providers specifically include Roma in their target group, e.g. Mikrofond in Bulgaria.

European microfinance support has contributed to job creation for members of the Roma community

  • either because they have been given a chance as entrepreneurs

  • or because they found jobs in enterprises created thanks to a microloan

  • or because they have acquired appropriate skills.

Moreover, the projects have helped in the fight against prejudice and they have given self-confidence to the targeted group.

In this context, the experience of the microfinancing programmes, such as Kiútprogram, need to be extended in Europe to achieve a successful use of microcredit practices to integrate disadvantaged groups – including Roma - in the labour market.

Ladies and gentlemen,

Social return on investment is our long-term goal. What has been demonstrated through the Kiútprogram is that the social benefits allocated to this target group outweigh the costs of the programme.

The Kiútprogram shows that lending is not enough - it must be supported by non-financial support. For instance, how can you lend money without improving the financial literacy of the loan applicants? There is an obvious need for bookkeeping, tax adviceing and legal support and training. A clear division of tasks and responsibilities among service providers and personalised services for Roma jobseekers - via the public employment service – is necessary.

The main responsibilities for action and progress lie at national level, but the EU will remain committed to work with the Member States and monitor progress on visible and sustainable positive changes in the lives of the Roma.

My hope is that after drawing the lessons from the Kiútprogram, they could be fed into our microfinancing initiatives, while the methodology will be adapted to each national situation.

I would like to encourage Member States to seize the opportunity of the new programming period 2014-20 to support inclusive social microcredit arrangements in their respective country. This conference will bring useful elements to achieve this goal.

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