General Principle

Through EIF, the EU partly guarantees micro-credit financing granted by local institutions to very small enterprises (“microenterprises”, as defined by the EU). The risk-sharing arrangements established between EIF and each of its local partners, known as “Intermediaries”, aim to stimulate micro-lending.

Please click here to view the Guarantee Policy and Operational Guidelines governing the Micro-Credit Guarantees Window.

The Product

Depending on the type of Intermediary and its activity, EIF can issue:

• Direct guarantees to Intermediaries that provide micro-credits. EU Micro-Credit Guarantees partially cover portfolios of micro-credits issued to microenterprises.
• Indirect or counter-guarantees to Intermediaries that issue guarantees for the benefit of microfinance institutions. EU Micro-Credit Guarantees partially cover portfolios of guarantees.

Main Product Features (applicable both to direct and indirect EU Micro-Credit Guarantees)

• Guarantee rate: for each loan/guarantee in the portfolio, up to 75% of the Intermediary’s commitment.
• Guarantee cap: payments are capped at a pre-agreed amount, which is a percentage of the total amount covered by the EU Micro-Credit Guarantee. The percentage is negotiated with EIF and is based on the expected cumulative losses incurred by the Intermediary.
• Fees: EU Micro-Credit Guarantees are provided free of any charge.
• Guarantee maturity: 5 years for each micro-credit covered
• Micro-credit criteria:
  • Borrowers: Microenterprises - click here for the EU definition
  • Purpose of financing: investment loans or leases for the development of the borrower (investments in tangible or intangible assets, or business transfers)
  • Minimum maturity: 12 months
  • Maximum amount: EUR 25,000
• Special EU requirements: Given the public nature of the EU Micro-Credit Guarantee Window, certain EU conditions apply. Click here for futher information about the EU requirements.

Please click here to view the application procedure and download the relevant application information.

Important information for small businesses (SMEs)

Please note that SMEs themselves cannot obtain a guarantee directly from the EIF and should therefore not approach EIF.Information for SMEs about sources of loan finance backed by the European Union will be available on a dedicated website that is presently under construction. Links to this SME-dedicated website will be published on the EIF website in due course.