First social finance transaction in Italy to provide EUR 50million for social enterprises

The European Investment Fund (EIF) and Banca Etica (BE) have signed the first Social Entrepreneurship guarantee agreement in Italy under the EU Programme for Employment and Social Innovation (EaSI). The European Investment Bank (EIB) Vice President, Ambroise Fayolle and the President of Banca Etica, Ugo Biggeri signed the agreement during the European Microfinance Network’s 14^th Annual Conference in Venice.

This new guarantee agreement allows BE to provide a total of EUR 50 million to 330 social entrepreneurs over the next 5 years, to both Spanish and Italian businesses. Social enterprises including those employing people with disabilities, people who have been long-term unemployed, migrants and asylum seekers, will be able to benefit from loans at a reduced interest rate, with reduced collateral requirements, under the EU supported programme. BPE will focus on a vast range of social enterprise sectors, targeting innovative socially oriented start-ups, social agri-businesses and companies active using energy efficiency and renewable energy technology.

The European Microfinance Network’s 14^th Annual Conference in Venice, which this year focussed on the power of financial education for vulnerable populations and which brought together over 300 micro and social finance providers and representatives from guarantee-granting institutions.

Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: "Thanks to this EUR 3 million EU funding, Banca Etica will be able to offer loans on preferential terms to over 330 social enterprises in Italy and will open up its lending activity towards social enterprises in Spain. By providing them a greater and easier access to finance, we contribute to the development of social enterprises in key areas for social inclusion, such as social agro-businesses and businesses contributing to the integration of migrants and refugees. We remain fully committed in combating social exclusion and improving working conditions in Europe, with particular efforts directed towards the most vulnerable people in the labour market."

EIB Vice President, Ambroise Fayolle said: “This new EaSI guarantee enables Banca Etica to provide finance solutions to social enterprises who often struggle to access finance from traditional lenders. I am pleased that we can announce the agreement here at the European Microfinance Network’s annual meeting and would encourage their other members to follow suit. Banca Etica has a successful track-record in supporting social entrepreneurs and I am convinced that this new agreement will help to strengthen their product offer in this segment.”

Banca Etica’s president, Ugo Biggeri said: “We are very proud that EIF recognized the potential of ethical finance. Banca Etica is constantly growing in Italy and Spain and this agreement will further empower our capacity to produce an important social impact”.

EMN General Manager, Jorge Ramirez said: “EMN is honoured to host this signature ceremony during its main annual event. With this agreement, Banca Etica becomes the 13^th EMN member to access the EaSI Guarantee facility and we are wholly unwavering in our mission to facilitate greater access for MFIs to EaSI financial instruments and technical assistance.”

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 Banca Etica branches in Italy.       

EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, 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 Banca Etica

Banca Etica is the first and yet only bank in Italy entirely committed to ethical finance. Born 18 years ago Banca Etica now serves Italy and Spain. Products and services include savings accounts, current accounts, debit and credit cards, affinity cards with organisations like Amnesty International, payment services and online banking. Banca Etica’s focus is in financing organisations operating within the third-sector that carry out civil society oriented economic projects, and for-profit organisations focused on organic food, green energy; employee buy-outs; and social innovations. Banca Etica is one of the Italian most active microfinance provider.

About the European Microfinance Network

The European Microfinance Network’s mission is to build up universal and open access to appropriate financial and complementary support services. Services that are suited to society’s needs at affordable prices allowing people to deploy their talents to create wealth and value with a positive social impact. EMN is empowering its 94 members in over 26 countries to become acknowledged actors and partners in the financial sector who are reaching out to a large number of enterprising people who, in turn, create jobs and contribute to sustainable growth.

Press contact:

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

Banca Popolare Etica
Chiara Bannella
tel: +39 334 6883414
e-mail: cbannella@bancaetica.com

EU Commission:
Sara Soumillion
+32 2 296 7094