First social finance transaction in Denmark to provide EUR 27 million for social enterprises

The European Investment Fund (EIF) and Merkur Cooperative Bank (Merkur) have signed the first Social Entrepreneurship guarantee agreement in Denmark under the EU Programme for Employment and Social Innovation (EaSI).

This new guarantee agreement allows Merkur to provide a total of EUR 27 million to social entrepreneurs over the next 5 years. The EU-backed programme will help Merkur to provide loans to social enterprises, targeting vulnerable groups.

Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: "Thanks to EUR 27 million in EU funding, Merkur will help 600 social entrepreneurs in Denmark to access financing. This will allow them to grow businesses in areas with a strong social impact such as educational institutions, social institutions for citizens with special needs and social enterprises. Through the programme for Employment and Social Innovation, the European Commission shows its commitment to foster sustainable employment for the most vulnerable people in the labour market."

EIF Chief Executive, Pier Luigi Gilibert, said: “This new EaSI guarantee will help Merkur to diversify its client base and deliver more finance solutions to social enterprises. Merkur's core business focuses on lending to enterprises which generate a valuable impact for the communities where it operates and this transaction will bring lasting benefits to entrepreneurs in Denmark.”

Merkur’s CEO, Lars Pehrson, said: “I am very pleased that Merkur is now able to finance a wider group of enterprises with a social purpose. Merkur already has quite a lot of experience in this field, but with the new guarantee agreement we will be able to reach further, e.g. to social enterprises in parts of Denmark where funding can sometimes be difficult to achieve.”  

The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund. Social-enterprises wishing to apply for a loan under EaSI, can contact Merkur branches in Denmark.      

EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries – like Merkur – such as microfinance, social finance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal with interested parties directly to provide support under the EaSI Guarantee.

About the Programme for Employment and Social Innovation

The European Commission's Programme for Employment and Social Innovation (EaSI) aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The microfinance and social entrepreneurship axis of the EaSI programme provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance, which includes microcredit i.e. loans of up to EUR 25,000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the European Commission is supporting social enterprises through investments of up to EUR 500,000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to (potential) entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. It is also being implemented through the ‘EaSI Capacity Building Investments Window’ to reinforce the capacity of financial intermediaries in the areas of microfinance and social finance through equity investments mostly. The European Commission has selected EIF to implement the EaSI Guarantee and the EaSI Capacity Building Investments Window.

Furthermore, the Commission is reinforcing the social dimension of the EFSI for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.

About the European Investment Fund

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance 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.

For further information on EU microfinance and social entrepreneurship support please refer to:

EaSI Programme

EU support to social entrepreneurship

About Merkur

Merkur is a values-based bank committed to social justice within a sustainable economy and is Denmark’s foremost financial institution in the field of sustainable banking. From its founding in 1982 and onwards, Merkur has built a solid foundation of expertise in financing social, cultural, and environmentally friendly activities and businesses.  

Press contact:

EIF:
David Yormesor
tel: +352 42 66 88 346
e-mail: d.yormesor@eif.org

Merkur:
Ann Hybertz Frandsen
tel: +45 62 65 67 31
e-mail: ahf@merkur.dk