The EIF and Crédal Société Coopérative (Crédal) have signed a guarantee agreement aimed at supporting micro-enterprises and self-employed entrepreneurs in Belgium.

This transaction was signed under the European Progress Microfinance Facility (Progress Microfinance), funded by the European Commission and managed by the European Investment Fund. Crédal is operating in Brussels and Wallonia.

This agreement allows Crédal to provide more loans to micro-entrepreneurs, including at-risk groups and as well offer a new product, on a pilot basis, which features larger loans up to a total amount of EUR 24 999 per micro-business.

This agreement is expected to provide access to finance to around 180 Belgian micro-enterprises, many of whom are excluded from the traditional lending market, allowing Crédal to continue to further expand its current lending activity to otherwise excluded micro-enterprises.

Micro-enterprises wishing to apply for a micro-loan under Progress Microfinance can directly contact Crédal in Belgium.

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.

Crédal marks the 19th transaction signed under Progress Microfinance since its inception in 2010. To date, commitments of EUR 74.5 million under Progress Microfinance have been signed to benefit EU micro-borrowers. Countries where agreements have been signed to date include Belgium, Bulgaria, Cyprus, France, Greece, Lithuania, Poland, Portugal, Romania, Spain and The Netherlands.

For further information about this initiative please visit: www.ec.europa.eu/epmf

About the EIF

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 6bn at end 2011. With investments in over 370 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 EUR4.4bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About Crédal

Crédal is an alternative financing cooperative founded in 1984 with a specific social vision: to promote fairer society and to reinforce social cohesion. Its main objective is to offer savings products for social purposes and to support social projects through credit and counselling. Crédal first activity was to finance non profit organisations and cooperatives through various traditional credit mechanisms at low interest rates. In 2000 Crédal started a microcredit programme for credit excluded persons who want to start or develop their own business. In 2004 Crédal launched another microfinance product: the social consumer credit (consumer credit in connection with a project of life for credit excluded).

The microfinance products of Crédal are intended for credit excluded persons (low income, lack of a guarantee, bad credit history, age, etc).

Traditional microcredit is intended for micro-entrepreneurs who want to start their own business but cannot obtain suitable financing from traditional banks. Loans amount starts from 500€ to 12.500€, repayment is due within 48 months and the interest rate charged is 5%. Since 2010, micro-credits can reach up to 24.999€ for specific professional projects (sustainable development,…).

In 2011, Crédal has granted 93 microcredits for micro-entrepreneurs.

The particularity of Crédal is to always focus on the accompaniment of its clients. Before the credit, the advisor will thoroughly study the client’s professional project and private budget in order to insure that the project is sustainable and to prevent overindebtness for the client. After the credit is granted, the client will benefit from a free accompaniment of 2 years.

Press contacts

EIF: David Yormesor, d.yormesor@eif.org, or visit EIF’s website www.eif.org
Crédal: Bernard Horenbeek, director – 010/48.34.70 -Nathalie Denis, Microfinance coordinator – 010/23.56.86 – nathalie.denis@credal.be; www.credal.be

HIGHLIGHTS

European Progress Microfinance Facility