Microfinance and EU

The European Microfinance Network (EMN) aisbl focuses exclusively on the microfinance sector in Europe and aims at increasing communication between the various European institutions that promote this sector.

The European Commission (EC) has launched several initiatives in the field of microfinance and is part of a dynamics to promote microfinance as an economic development tool.

According to the European Commission (EC), small and medium enterprises (SMEs) represent enterprises with less than 250 employees and a turnover that doesn’t exceed 50 million Euro per year, or a balance sheet that doesn’t exceed 43 million Euro per year. Micro-enterprises, more specifically, are companies with less than 10 employees and a maximum annual turnover of 2 million Euro.

The EC defines microcredit as “the extension of very small loans (micro-loans) to entrepreneurs, to social economy enterprises, to employees who wish to become self-employed, to people working in the informal economy and to the unemployed and others living in poverty who are not considered bankable. It stands at the crossroads between economic and social preoccupations. It contributes to economic initiative and entrepreneurship, job creation and self-employment, the development of skills and active inclusion for people suffering disadvantages” (EU, The European initiative to develop microcredit in support of growth and employment, 2007). Microloans do not exceed 25.000 Euro. 

European Strategic framework and EU Funds 2014-2020

The Europe 2020 strategy, adopted in 2010, sets three mutually reinforcing European priorities: smart, sustainable and inclusive growth. The strategic framework should support the EU and the Member States in delivering higher levels of employment, productivity and social cohesion, in order to reach out targets for 2020 on poverty (lifting at least 20 million people out of poverty and social exclusion) and employment (75% of the population aged 20-64 should be employed).  The latter is backed, since 2010, by the Platform Against Poverty and Social Exclusion (EPAP), one of the seven flagship initiatives created within the strategic framework. The European Structural Funds (ESF) are a key instrument to advance the Europe 2020 objectives.

Organized under the EU Initiative for Employment and Social Inclusion 2014-2020, and supporting the EU2020 Strategy, four EU Funds have been set by the EC (either extended from the previous budgetary period, or newly created):

  1. the European Social Fund (ESF), 
  2. the Fund for European Aid to the Most Deprived, 
  3. the European Globalisation Adjustment Fund (EGF) and 
  4. the recent Programme for Employment and Social Innovation (EaSI).

EaSI integrates and extends the coverage of three existing financial instruments: Programme for Employment and Social Solidarity (Progress), the European network of Public Employment Services EURES and the European Progress Microfinance Facility (EPMF).

Social innovation, at the heart of EaSI

The Employment and Social Innovation (EaSI) programme is a European-level financing instrument managed directly by the European Commission to support employment, social policy and labour mobility across the EU. The concept of social innovation, which has a special focus on youth, is at the heart of EaSI. The programme will provide 10-14 million Euro a year for social innovation activities.

Starting in January 2014, EaSI does not stand in isolation. Together with the European Social Fund (ESF) and the European Globalisation Fund (EGF), it forms a coherent set of EU programmes to promote employment, social protection and social inclusion, as well as working conditions for the period 2014-20.

The instrument feeds into the EU’s ten-year growth strategy by supporting the implementation of the employment and social objectives of Europe 2020. It also supports the roll-out of the seven flagship initiatives launched in 2010, notably the European Platform against Poverty and Social Exclusion, An Agenda for New Skills and Jobs, and Youth on the Move.

The three components of EaSI will receive the following allocations:

  • PROGRESS (Programme for Employment and Social Solidarity): Around 550 million Euro (61% of the total budget) will support activities with a strong Europe-wide dimension such as comparable analysis, mutual learning and exchanges of practices in the field of employment and social policies
  • EURES: Around 160 million Euro (18% of the budget) will be dedicated to the EURES network that provides information and advice to job seekers wishing to work in another EU country. EaSI will finance core activities at EU level, while the national activities can receive funding from the ESF.
  • Progress Microfinance: Around 200 million Euro (21% or the budget) will extend the support given to microcredit providers and institutions in order to make more loans available, and will help to develop the social investment market and access to financing for social enterprises.

EaSI objectives

With an amount of 920 million Euro as budget, the EaSI programm pursues:

  • Strengthen ownership of EU objectives and coordination of action at EU and national levels in the areas of employment, social affairs and inclusion.

  • Support the development of adequate social protection systems and labour market policies by promoting good governance, mutual learning and social innovation.

  • Modernise EU legislation and ensure effective application of EU legislation.

  • Promote geographical mobility and boost employment opportunities by developing an open labour market.

  • Increase the availability and accessibility of microfinance for vulnerable groups and micro-enterprises, and increase access to finance for social enterprises.

  • Increase policy coherence and impact of Commission’s instruments with a common objective, contribution to the Europe 2020 Strategy for Growth and Jobs.

Source: European Comission


Read more about the EU Funds latest news:

EMN Exchange visit on EU Funds (18/12/2013, Brussels)


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