EPMF - European Progress Microfinance Facility is a new initiative launched by the European Commission and the EIB Group (the European Investment Bank and the European Investment Fund), in the field of social policy and entrepreneurship to address, in particular, the adverse effects of the global financial crisis on at-risk groups. The facility is aimed at individuals who want to start or further develop their own micro-enterprise, including for self-employment. It will target people who have difficulties accessing the job market or have had trouble obtaining credit in the past.
It aims at increasing the lending activity to micro-borrowers through a wide range of financial intermediaries such as non-bank MFIs, micro-banks, dedicated microfinance companies or investment funds, local savings banks, smaller co-operative banks, smaller development banks/institutions and selected local commercial banks.
In this context, EPMF, which is expected to be match-funded by EIB, will provide up to EUR 100m to support employment, development of micro-enterprises and the social economy in EU Member States. The Facility will be available over a 6-year horizon in the form of guarantee products and funded instruments. The first support mechanism under this program, a micro-loan guarantee instrument has been available since July 2010.
A wider range of additional financial support instruments, including funding of financial intermediaries providing micro-loans, is set to reach the market in autumn 2010.
The EIF will not provide direct financing to borrowers. Financing will be made available through financial intermediaries participating in the Facility. Intermediaries may include commercial banks, microfinance institutions, guarantee institutions, and community development finance institutions. Intermediaries will provide beneficiaries with micro-credits and guarantees on micro-credits. Borrowers can benefit from more than one micro-loan under the Facility up to a maximum amount below EUR 25,000.
The financing can be used for the setup and/or development of micro-enterprises, including for investment, leasing, and working capital needs, as well as the acquisition of licenses and other start-up costs. Financing cannot be used to cover credit lines such as overdrafts or short-term revolving facilities.
