The EIF and Fair Finance have signed a guarantee agreement aimed at supporting micro-enterprises and young entrepreneurs in London.
This transaction was signed under the European Progress Microfinance Facility (Progress Microfinance), funded by the European Commission and the European Investment Bank and managed by the European Investment Fund. Fair Finance is the first institution in the UK to receive support under this facility.
Following this agreement, Fair Finance will provide a total amount of £2 million to micro-entrepreneurs across London particularly in disadvantaged areas, with a strong focus on supporting entrepreneurs excluded from access to traditional banking services including ethnic minorities and young entrepreneurs. This agreement will provide easier access to finance to around 370 local micro-enterprises and help to combat youth unemployment.
Commenting on the agreement, Chief Executive of the European Investment Fund Richard Pelly said: “I am delighted to be signing the first Progress Microfinance agreement in the UK with Fair Finance.
At a time of tightening credit conditions and given the need for improving access to finance for businesses, this agreement will bring valuable benefits to micro-entrepreneurs across London and in particular young entrepreneurs”.
The transaction will allow Fair Finance, to continue further develop its current lending activity to small and micro-enterprises in London.
“In seven years of operations Fair Finance has been able to provide a socially responsible alternative to high-cost lending for thousands of Londoners. Increasingly entrepreneurs and small businesses have been asking for our support to help them build and grow. This financing has real significance for this group and can provide a kick-start to small business lending, building confidence in this sector and demonstrating to the mainstream lenders the potential that we know exists. Our objective is to help businesses through this investment and to provide a catalyst to lending and the local economies”, says Faisel Rahman, CEO of Fair Finance.
Micro-enterprises wishing to apply for a micro-loan under Progress Microfinance can directly contact Fair Finance‘s branches in London.
About the European Progress Microfinance Facility
The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative is established with EUR 203 million of funding from the European Commission and the European Investment Bank. The European Investment Fund (EIF) acts as Management Company on behalf of the EU Microfinance Platform FCP-FIS - European Progress Microfinance Fund, the main vehicle through which Progress Microfinance is implemented. Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. It has a particular focus on, but is not restricted to, groups with limited access to the conventional credit market. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc. Loans less than EUR 25,000 are made available through selected intermediaries participating in the facility. Progress Microfinance does not provide direct financing to micro-entrepreneurs or individuals.
Fair Finance marks the 34th transaction signed under Progress Microfinance since its inception in 2010. To date, commitments of EUR 110 million under Progress Microfinance have been signed to benefit EU micro-borrowers. Countries where agreements have been signed to date include Austria, Belgium, Bulgaria, Cyprus, France, Greece, Ireland, Italy, Lithuania, Poland, Romania, Slovenia, Spain, The Netherlands and the UK.
For further information about this initiative please visit: www.ec.europa.eu/epmf
EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital and guarantees 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. The EIF total net commitments to private equity funds amounted to over EUR 6.5bn at end 2012. With investments in over 430 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF guarantees loan portfolio totalled over EUR 4.7bn in 255 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About Fair Finance
Fair Finance is a non-profit social enterprise based in London. It has been delivering affordable and responsible financial services to the financially excluded since 2005 and has branches across London. Over the last 7 years it has helped tens of thousands of London residents escape from high cost payday and doorstep lenders, create businesses, helped people open bank accounts and given debt free advice to the overindebted.
It is widely recognised as one of the leading microfinance and community finance organisation in the UK and the EU, winning numerous awards for its work in tackling exclusion.
For further information please visit: www.fairfinance.org.uk