The European Investment Fund (EIF) and Banca Popolare Sant’Angelo (BPSA) have signed a microfinance guarantee agreement in Italy under the EU Programme for Employment and Social Innovation (EaSI). This new financing agreement was made possible by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe.
This new guarantee agreement allows BPSA to provide EUR 10 million in loans to 650 micro-entrepreneurs over the next 5 years in Italy. Micro-entrepreneurs will be able to benefit from loans at a reduced interest rate with lower collateral. Among the entrepreneurs, BPSA will primarily target women, young people and start-ups.
European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: "Empowering people who face difficulties in accessing credit from traditional banking sources is one of our key priorities, both under the Juncker Plan and Programme for Employment and Social Innovation. The EUR 10 million of EU support will help hundreds of start-ups, women and young entrepreneurs in Italy to get access to finance and put their talent to work. This is how we will build a fairer and a more inclusive European Union."
EIF Chief Executive, Pier Luigi Gilibert, said: “This microfinance agreement with Banca Popolare Sant’Angelo will help to benefit micro-enterprises, in particular at-risk groups and thereby contribute to social inclusion and job creation. Micro-entrepreneurs in Italy will now have access to additional finance to start up, grow and expand their businesses.”
BPSA Chief Executive, Ines Curella, said: “Among Italian regions, according to the last statistics, Sicily has one of the higher company’s percentages access credit denial. The principal reason, often attributed to bad wish of the local banker system, must be researched in the local economic crisis which erodes company assets and creditworthiness, principally in small companies. Being a Sicilian Bank, nearer to the local economic activity, we are happy and proud to help local companies in difficulty trough this new ethical and social tool. This will let to all good local company, but actually braked by a momentary non-structural weakness, to realize their business projects”.
The EaSI Guarantee scheme was launched in June 2015. It is funded by the European Union and implemented by the European Investment Fund. Micro-enterprises wishing to apply for a loan under EaSI, can contact BPSA branches.
EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, such as microfinance, social finance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal with interested parties directly to provide support under the EaSI Guarantee.
About the Programme for Employment and Social Innovation
The European Commission's Programme for Employment and Social Innovation ("EaSI") aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The microfinance and social entrepreneurship axis of the EaSI programme provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance, which includes microcredit i.e. loans of up to EUR 25,000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the European Commission is supporting social enterprises through investments of up to EUR 500,000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to (potential) entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. It is also being implemented through the ‘EaSI Capacity Building Investments Window’ to reinforce the capacity of financial intermediaries in the areas of microfinance and social finance through equity investments mostly. The European Commission has selected EIF to implement the EaSI Guarantee and the EaSI Capacity Building Investments Window.
Furthermore, the Commission is reinforcing the social dimension of the EFSI for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.
About the European Investment Fund
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
For further information on EU microfinance and social entrepreneurship support please refer to:
About the Investment Plan for Europe
The Investment Plan for Europe (the Juncker Plan) focuses mainly on removing obstacles to investment, increasing the visibility of investment projects while providing them with technical assistance, and making smarter use of new and existing financial resources. By November 2018, the Investment Plan had already mobilised over EUR 360 billion of investment across Europe.
