The European Progress Microfinance Facility has granted €50 million loans to 6000 entrepreneurs
Microfinance is recognized by the European Union as a tool for addressing issues of poverty alleviation and for meeting the challenge of financial exclusion.
More than 6000 entrepreneurs have already received loans for a total of close to 50 million euros under the European Progress Microfinance Facility, according to the third annual report on this EU instrument.
The report confirms that the Progress Microfinance has significantly contributed to job creation, helping a high percentage of people who were previously unemployed or inactive into employment.
Microfinance aims at promoting self-employment and entrepreneurship among low-income individuals or those who do not have access to typical banking services. The Facility, established in 2010 with € 200 million of funding from the European Commission and the European Investment Bank, finances loans below €25,000 for unemployed people, people at a risk of losing their jobs and disadvantaged individuals, including people at risk of social exclusion. In addition, upon receiving the loan, these people are also offered training and mentoring in order to enhance their business skills .
Besides individuals, Progress Microfinance also supports micro-enterprises, including those in the social economy providing jobs for the unemployed or the disadvantaged.
Progress Microfinance does not directly finance entrepreneurs, but works through microcredit providers at national, regional or local level in the EU. The microcredit providers may be private or public banks, non-bank microfinance institutions and not-for-profit microcredit providers.
According to the report, agriculture and trade remain the two sectors receiving most support from the Facility, accounting for more than a half of all supported enterprises. Plus, almost 80% of the micro-companies supported are start-ups operating for less than three years. The report also indicates that almost one third of final beneficiaries said they were unemployed or inactive when they applied.