EU To Provide 45,000 Micro-Loans To Unemployed Willing To Start Small Businesses

The European Microfinance Facility will have a starting budget of EUR100 million which could reach more than EUR500 million in cooperation with international financial institutions such as the European Investment Bank (EIB) Group, the European Commission said in a press release Monday.

The initiative is part of the EU’s response to the crisis and is especially targeted at people who cannot normally obtain loans because of the economic crisis and the current lack of credit supply.

EU Commissioner for Employment and Social Affairs and Inclusion Laszlo Andor said „the Microfinance Facility offers an alternative to those suffering from the effects of the crisis and will help create new jobs”.

Andor stressed „the facility will also boost entrepreneurship and the social economy in Europe”, adding the facility is expected „to provide small loans to around 45,000 budding entrepreneurs over the next eight years.”

The beneficiaries of this facility will also be able to benefit from mentoring, training and coaching as well as assistance in preparing a business plan, in close cooperation with the existing European Social Fund.

Micro-credit in this Facility means loans under EUR25,000 and targets 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.

According to the European Commission, 99% of start-ups in Europe are micro or small enterprises and one third of these are launched by people who are unemployed.