01. 04.10:
Unemployed Microfinance Facility agreed
Following the compromise reached with the European Parliament late last year (see this previous article), the Council of Ministers for Employment and Social Affairs have now officially agreed to set up a fund providing entrepreneurial microloans to individuals and enterprises badly affected by the current economic crisis.
The EUR100 million Progress Microfinance Facility (expected to leverage 5 times that amount in credit) has been designed to provide a total of 45,000 loans from 2010-13.
The support is to be targeted at the following beneficiaries:
* Those recently made redundant or at risk of losing their job.
* Disadvantaged people, particularly those facing multiple deprivation and with no access to banking services.
* Micro-enterprises, and especially social enterprises employing people from the above groups.
It is expected to take the following forms:
* Equity investments aimed at strengthening the equity/capital base of microfinance providers and to support investments.
* Loans to microfinance institutions, to ensure they are in a position to provide loans to micro-borrowers at local level.
* Risk sharing and guarantees among several participants.
It is now expected that the first initiatives will be launched over the coming months with a budget of EUR25 million being provided for approximately 5,000 loans in 2010. It seems likely that a call for expression of interest to select local level (public or private) microfinance providers will be launched shortly. Complementary coaching, training, and mentoring opportunities are likely to be made available to loan beneficiaries through the European Social Fund (ESF) - presumably via Ireland’s Human Capital Investment Operational Programme under the Structural Funds.
