EUR 200m loan fund launched to support micro and social enterprises

The loan fund will provide senior and subordinated loans to microfinance institutions and social enterprise lenders in order to boost their lending capacity.

The European Union, the European Investment Bank (EIB) and the European Investment Fund (EIF) have launched a EUR 200 million loan fund to support lending to micro-enterprises and social enterprises under the EU Programme for Employment and Social Innovation (EaSI).

In line with the EU's policy objectives, the fund will promote microfinance and social entrepreneurship in the EU Member States and other participating countries, by encouraging microfinance institutions and social enterprise leaders to increase funding for micro-enterprises as well as social enterprises as a means of supporting financial and social inclusion.

The loan fund will provide senior and subordinated loans to microfinance institutions and social enterprise lenders in order to boost their lending capacity. It expands the range of EU level financial instruments available under the EaSI programme, which so far included guarantees and (quasi-) equity investments.

Commenting on the new EaSI loan fund, Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: "We are delighted about the launch of this new loan fund under our Programme for Employment and Social Innovation that will give a sizeable boost to microfinance institutions and social enterprise leaders in Europe. This new fund is another addition to the toolbox of EU level instruments dedicated to social finance. Moreover, it reflects the EU's unwavering commitment to delivering on the European Pillar of Social Rights, building a more inclusive and fairer Europe, and supporting equal opportunities and access to the labor market."

Ambroise Fayolle, Vice-President of the European Investment Bank, said: "Today's announcement demonstrates that the European Investment Bank Group is committed to supporting micro-entrepreneurs who bring new opportunities and foster job creation in local economies. This EaSI Funded Instrument shows how the EIB Group can have a concrete positive impact on European citizens by helping them in all the fields of entrepreneurship, especially via microfinance"

EIF Chief Executive, Pier Luigi Gilibert said: "Due to fragmentation in Europe's microfinance market and the embryonic social entrepreneurship ecosystem, the EU programs will continue to have a catalytic effect in boosting finance for micro and social entrepreneurs. The EaSI Funded Instrument will complement existing EIF financing for micro and social enterprises by addressing the funding gap for intermediaries which usually have limited access to deposit funding".

The contribution from the European Union is allocated from the budget of the EU Programme for Employment and Social Innovation (EaSI), a programme designed to promote a high level of quality and sustainable employment, to guarantee adequate and decent social protection, to combat social exclusion and poverty and to improve working conditions across Europe, including by means of financial instruments.

The EU does not provide direct financial support to enterprises but instead implements the instrument through local financial intermediaries, such as microfinance institutions and social enterprise lenders active across the 28 EU Member States and additional participating countries.