Europe: Over EUR 100 million made available from EU Progress Microfinance so far

Over EUR 100 m have been made available to 21 different microcredit providers in 15 countries across the EU, amounting to around 50% of the funds available under the European Progress Microfinance Facility (Progress Microfinance).

Progress Microfinance is funded by the European Commission and the European Investment Bank (EIB) and managed by the EIF. Thanks to the microfinance agreements signed over the last two years, microcredit providers can provide microloans to micro-businesses in the EU, targeting in general disadvantaged borrowers who have difficulties in accessing the traditional credit market.

László Andor, Commissioner for Employment, Social Affairs and Inclusion said: “Microfinance has strong potential to help people stand on their own feet especially in times of hardship. I am glad that the Progress Microfinance Facility has now reached cruising speed with more and more people benefiting from it. I invite other countries and institutions to join in. EU support to this important tool should continue.”

Commenting on the success of the initiative, EIF Chief Executive Richard Pelly said: “Over EUR 100 million in new commitments to microcredit providers in two years demonstrates the fast impact of Progress Microfinance since its launch, especially given the current demand in the market for microfinance. We are convinced that the microcredit providers we are working with will help financing the start-up and expansion of many micro-enterprises at this crucial time for the European economy.”

A number of new microfinance agreements were signed at the end of 2012 including deals with Adie in France, SocGen Expressbank in Bulgaria and the newly created Microfinance Ireland institution in Ireland. At least 10 – 12 new agreements are due to be signed in 2013. In total, EUR 500 million of microloans to 46,000 micro-borrowers are expected to be made available until the end of Progress Microfinance by 2020.

About the European Progress Microfinance Facility

The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative has EUR 203m of funding from the European Commission and the European Investment Bank. 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 of less than EUR 25,000 are made available through selected intermediaries participating in the facility. Progress Microfinance does not provide financing or guarantees to micro-entrepreneurs or individuals directly.
For more information refer to the comprehensive list of microfinance institutions under Progress Microfinance.

The European Commission aims to continue microfinance support in the next financial period under the proposed Programme for Social Change and Innovation (PSCI – see IP/11/1159 and MEMO/11/663)). The proposed instrument also covers capacity building for microfinance institutions. Like the Progress Microfinance Facility, the PSCI would be complementary to inclusive entrepreneurship policies under the European Social Fund, which can, for instance, finance business development services that help start-ups to acquire the necessary skills for running their business.

About the EIF

The 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 400 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 8bn in close to 250 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

SOURCE: European Investment Fund

Europe: Celebrating Microfinance initiatives as a valuable tool in assuring food security

During European Microfinance Week, held 14-16 November 2012 in Luxembourg, the 4th European Microfinance Award was presented to the Philippine organization Alay Sa Kaunlaran Inc. (ASKI) for their efforts to support the local Philippine agricultural sector.

The European Microfinance Award is jointly organised every two years by the Luxembourg Ministry of Foreign Affairs – Directorate for Development Cooperation, the European Microfinance Platform (e-MFP) the Luxembourg Round Table on Microfinance, and the European Investment Bank (EIB). It was created to highlight contributions to the sector and to support innovative thinking in microfinance.

In 2012, the 4th European Microfinance Award identified the issue of “Microfinance for Food Security” and focuses on microfinance initiatives which contribute to improving the supply of safe and better quality food and distribution conditions in developing countries.

Applications came from 15 countries, from Latin America (50% of them), Africa (30%) and Asia (20%). After a rigorous three phase selection process during which they were appraised, the High Jury selected from among the three finalists: ASKI, from The Philippines; Banco FIE, from Bolivia and Kompanion from the Kyrgyz Republic.

ASKI won the coveted award, gaining recognition for their micro-credit initiatives to improve food security, strengthen food distribution networks, increase yields and empower farmer communities.

Additional to international recognition, the award also encompasses a cash prize of 100,000 euros.

Mr Rolando VICTORIA, CEO of ASKI said: “To date almost 19,000 Philippine farmers are benefiting from these loans, which are making a valuable contribution to the needed food security initiatives of our country. We are honoured to receive recognition from such an esteemed Jury. We will use the funds to invest in further opportunities for the farming community which would provide them with additional sources of income to sustain the daily needs of their family.”

The two other finalists were also highly praised by the jury and by the public audience during the award ceremony.

Banco FIE (Banco para el Fomento a Iniciativas Económicas S.A), represented by Ms Elisabeth NAVA, CEO, is supporting food security in Bolivia through their exemplary role in sustainably financing the local farming community. To date, almost 13,000 farmers have been able thanks to FIE to access the agricultural loan making Banco FIE one of the five principal funders of the Bolivian agricultural sector.

Kompanion, represented by Ms Olesya PAUKOVA, CEO, is supporting food security in the Kyrgyz Republic through their comprehensive initiatives to improve livelihood opportunities for the local farmers and their communities. In 2011, Kompanion offered loans to close to 1400 farmers with about 100 specific participating to its ‘Home Garden Development Initiative’ (which comprises several technical assistance schemes and a credit component called Credit for conservation). It is aiming to promote biodiversity for long term nutrition benefits and sustainable land management.

The Award ceremony was hosted by the European Investment Bank (EIB) on November 15 where the award was presented by HRH Grand Duchess Maria Teresa of Luxembourg, with Professor Muhammad Yunus, Chair of the High Jury, President of the Yunus Centre and Nobel Peace Prize 2006, in the presence of the Luxembourg Minister for Development Cooperation and Humanitarian Affairs, Marie-Josée Jacobs, the President of EIB, Werner Hoyer and (by video link) the European Commissioner for Development, Andris Piebalgs.

EIB President Werner Hoyer in his welcoming remarks congratulated all the finalists selected by the Luxembourg Roundtable on Microfinance, for their remarkable work and the results they demonstrated in promoting microfinance to alleviate food shortages. He also highlighted the important role of the European Microfinance Platform in coordinating actions of NGOs, donors, financial institutions and academics in promoting responsible microfinance, particularly in this specific sector, in trying to make financial inclusion for the poor a reality.

EIB and Microfinance

The European Investment bank has a long-standing track record in microfinance, supporting leading microfinance institutions, fund providers and stakeholders, helping them to address specific market failures and promoting financing solutions to micro, small and medium-sized enterprises, as well as to low-income groups.

Since 2003, the EIB Group has committed close to EUR 1 billion to microfinance activities, in nearly 50 countries inside the European Union, in EU Neighbouring and Candidate countries, and outside the EU, where the Bank is active across the sub-Saharan African, Caribbean and Pacific regions as well as in the Mediterranean partner countries.

SOURCE: Invest in EU

EIB launches EUR 50m East Africa microfinance programme

European Investment Bank News Release

Small and micro businesses across East Africa will benefit from the European Investment Bank’s new EAC Microfinance Facility, launched today. The initiative will encourage job creation and increase access to long-term funding for micro and small enterprises through experienced local intermediaries. Faulu Kenya DTM and Co-operative Bank Kenya joined the EUR 50 million scheme today as the first regional partners.

The East African Community Microfinance Facility, backed by the European Investment Bank, Europe’s long-term lending institution, allows experienced banks and microfinance institutions engaging in microfinance to receive local currency funding to support their financing of local business. Partner banks can also benefit from dedicated training and technical assistance to improve the effectiveness of this financial support to the private sector.

The East African Community Microfinance Facility was launched today in Nairobi by Group Managing Director, Co-operative Bank of Kenya, Dr. Gideon Muriuki, the Chairman, Board of Directors Faulu Kenya DTM Ltd, Mr. Ken Wathome and European Investment Bank Vice President Plutarchos Sakellaris, currently in Kenya on an official visit.

“The European Investment Bank recognises the strong demand for long-term funding from micro entrepreneurs and small business in East Africa. Working with experienced local partners will allow the East African Community Microfinance Facility to stimulate both the creation of new jobs and ensure funding is available for the missing middle. Starting today with two renowned partners in Kenya, I am confident that thousands of entrepreneurs across the region will benefit as the programme expands.” said Plutarchos Sakellaris, European Investment Bank Vice President.

“Co-operative Bank of Kenya has, since its inception, concentrated the bulk of its efforts on providing banking for the average Kenyan, either directly or through the Co-operative movement. This funding will go a long way towards entrenching the bank’s value proposition to this consumer segment”. said Dr. Gideon Muriuki, Group Managing Director Co-operative Bank of Kenya.

“Faulu Kenya is committed to providing holistic financial solutions to the economically active poor, micro and medium entrepreneurs through innovative products. This funding will greatly reduce the cost of credit to our customers and boost our efforts in outreach and building capacity in the Kenyan informal sector.” said Mr John Mwara, Managing Director, Faulu Kenya Deposit Taking Microfinance.

Co-operative Bank of Kenya customers in small and micro business will benefit from EUR 20 million in local currency the EIB has made available under the East African Community Microfinance Facility. Co-operative Bank, as one of the largest banks in Kenya, is well placed to support increased investment by small-scale private sector entrepreneurs across the country.

Faulu Kenya DTM will use EUR 4 million in local currency from the programme to support self-employed and entrepreneur owned micro and small businesses in Kenya. They became the first Kenyan licensed deposit taking microfinance institution regulated by the central bank in 2009 and are one of the largest microfinance institutions in the country.

Kenyan entrepreneurs will also benefit from technical assistance to support preparation of business plans, developing activities, improve management skills and increase operational efficiency. This is expected to improve the credit worthiness of financial beneficiaries. Where appropriate, partner banks will also receive specialist training to address credit risk management and product development.

The East African Community Microfinance Facility will be the first of three regional microfinance programmes that the European Investment Bank plans to launch in sub-Saharan Africa over the next three years. This will expand direct lending by the European Investment Bank to microfinance institutions. In East Africa this will target both those countries with a developed microfinance market, such as Kenya and Uganda, as well as countries with growing microfinance activities, such as Tanzania and Rwanda. A new lending programme to support small business lending in Kenya is also being launched today by the European Investment Bank.

EIB to provide EUR 70m for Kenyan small business

European Investment Bank News Release

Kenyan small and medium sized businesses will benefit from increased access to long-term and attractive funding in local and foreign currency under a new EUR 70 million European Investment Bank lending scheme with leading Kenyan banks. Under the initiative launched in Nairobi today Co-operative Bank and Housing Finance Company Limited will use European Investment Bank funding to finance SME investment.

The Private Enterprise Finance Facility III scheme will finance the expansion, modernisation or start-up investment costs of small and medium sized companies in Kenya. Funding will be available in Kenyan shillings, US dollars and Euro. The programme will focus on enhancing the availability of funding for companies active in manufacturing, transport, tourism, agribusiness, education and healthcare and other eligible sectors. Kenyan SME’s are estimated to account for 75% of all jobs in the country.

European Investment Bank Vice President Plutarchos Sakellaris, responsible for the lending activities of Europe’s long-term lending institution, and the Group Managing Director Co-operative Bank Dr. Gideon Muriuki and the Managing Director Housing Finance Company Limited Mr Frank Ireri were present at the signing ceremony held in Nairobi.

“Access by small and medium sized business to long-term finance is essential for creating new jobs and economic growth in Kenya. The European Investment Bank looks forward to working with Kenya’s leading banks to reinforce private sector investment over the coming years and build on a strong track record of supporting entrepreneurs across the region.” said Plutarchos Sakellaris, European Investment Bank Vice President.

“Co-operative Bank traditionally has been a key player in banking the Small and Medium Enterprises sectors and these funds will enhance the existing capacity to benefit Kenyan business much further. The bank founders created the institution to benefit the ordinary Kenyans both in the Co-operative movement and outside it. This lending is therefore part of our responsibility to support the ordinary Kenyan entrepreneurs.” Dr. Gideon Muriuki, Group Managing Director, Co-operative Bank.

‘’The European Investment Bank has shown real vision and commitment towards the SME Sector in Africa, taking the time to understand what is needed thus enabling we in the financial sector to support the industry in meaningful ways. We welcome their role and look forward to utilising this funding line to support the growth of SME’s in the property industry in Kenya’’, said Housing Finance Managing Director, Mr. Frank Ireri.

“By European standards, Kenya has a substantial and dynamic private sector. The role played by the private sector is vital. The private sector is one of the key drivers to support development, to stimulate growth and to lift people out of poverty. The new programme launched by the European Investment Bank undoubtedly will reinforce our partnership with Kenya and the EAC region as a whole” said Ambassador Lodewijk Briët, Head of the European Union Delegation to Kenya.

Under the Private Enterprise Finance Facility III scheme co-financing of SME lending will be shared by the partner banks. Co-operative Bank will receive EUR 50m and Housing Finance Company Limited EUR 20m which will then be used to fund small businesses. Dedicated technical assistance funding will also be made available both to help Kenyan firms seeking investment funding, for example to help with preparation of a business plan, and to improve the effectiveness of small business lending by partner banks.

The Private Enterprise Finance Facility III follows the success of the recently launched PEFF II and will contribute both to the long-term development of the Kenyan banking industry and East African financial sector, and ensure that more funding is available to private enterprises. Growth and investment to explore new opportunities by many companies in the region is currently hindered by challenges getting access to funding. Intermediary banks will ensure that environmental impacts of projects financed under the scheme are identified and mitigated following relevant local and international standards. More banks are expected to join the initiative soon.

The European Investment Bank has been supporting long-term lending to Kenyan SMEs through local intermediary banks since 1991 and is the only international financial institution to provide local currency, long-term financing through local banks in the country. A new lending programme to support microfinance in East Africa is also being launched today by the European Investment Bank.

Europe: A second Polish microcredit provider under Progress Microfinance

From European Commission

Inicjatywa Mikro is joining the group of Polish microcredit providers under Progress Microfinance with a senior loan of up to EUR 4 million aimed at supporting the self-employed, in particular of the agricultural sector based in the South of Poland.

Inicjatywa Mikro is a non-bank microfinance institution established in Cracow in 1996 and one of the very few financial intermediaries offering microfinance in Poland. The funding through Progress Microfinance is expected to grow the microfinance portfolio of this institution and to support over 1,200 micro-businesses.

Inicjatywa Mikro will provide client education and mentoring, not only because of its credit risk benefits (i.e. making sure the client succeeds and can repay its micro-loan), but also because it is part of its very mission to help micro-entrepreneurs.

The European Progress Microfinance Facility (Progress Microfinance) is an EU microfinance initiative established with EUR 200 million of funding from the European Commission and the European Investment Bank and managed by the European Investment Fund.

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 of up to EUR 25,000 are made available through selected microfinance intermediaries participating in the facility.

The European Progress Microfinance Fund does not provide direct financing to micro-entrepreneurs or individuals, but it works through microfinance providers, such as FM Bank and Inicjatywa Mikro in Poland.

Europe: A first Greek microcredit provider under Progress Microfinance!

From European Commission

Pancretan Cooperative Bank Ltd (PCB) is joining the group of microcredit providers under Progress Microfinance.

Thanks to a guarantee, PCB will be able to offer up to EUR 6 million of microloans to Greek micro-entrepreneurs, with a focus on financing start-ups up to three years and new borrowers with a robust business plan.

A further senior loan up to EUR 8.75 million is expected to allow PCB to meet the demand of numerous micro-enterprises facing difficulties in accessing finance due to the credit crunch and the stricter eligibility requirements applied by the Greek banking sector. With a leverage of 1.5 times, PCB will generate up to EUR 13 million microloans to micro-enterprises.

Established since 1993, PCB has become the biggest cooperative organisation in Greece. Although the majority of its branches are located in Crete, PCB is likely to work in other parts of Greece, where it has some branches; the bank is expected through these two agreements to support more than 1000 microenterprises.

The European Progress Microfinance Facility (Progress Microfinance) is an EU microfinance initiative established with EUR 203 million of funding from the European Commission and the European Investment Bank and managed on their behalf by the European Investment Fund.

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 of up to EUR 25,000 are made available through selected microfinance intermediaries participating in the facility.

Progress Microfinance does not provide direct financing to micro-entrepreneurs or individuals, but it works through microfinance providers, such as Pancretan Cooperative Bank in Greece.

Africa’s first microfinance fund for sustainable farmers launched

From Euroalert

FEFISOL is the Africa’s first specialist rural microfinance fund supporting fair trade and organic small business. It has been launched in order to fund microfinance institutions and producer organisations across the continent in local currency. African microfinance bodies will benefit from a subsidised loan provided by AFD that absorbs foreign exchange loss on local currencies. Dedicated support for fair trade and organic producer organisations will help improve the quality and development of their activities over the long-term, notably by gaining access to new market sectors. SOS Faim and the African Microfinance Institutions Network will assist in this process, along with specialist fair trade organisations based in Africa.

Among the investors, the European Investment Bank will provide €5 millions for FEFISOL to help develop microfinance operations and small holder organisations in rural areas across Africa and improve access to fair trade and organic export markets. The support of private and public investors is crucial in the success of the fund.

In addition, technical assistance will also be provided to help microfinance institutions develop new products, improve business planning and develop legal and human resources capabilities. EIB also supports other initiatives in the world for boosting access to finance for small businesses using microfinance tool. This initiative compliments the REGMIFA rural microfinance fund launch earlier this year and supported by the European Investment Bank and European development finance institutions.

EU says entrepreneurship is key to sustainable employment

From Xinhua -

Self-employment and entrepreneurship is one of the pathways to more and better jobs, European Commission said here on Tuesday.

Commissioner for Employment, Social Affairs and Inclusion Laszlo Andor attended the conference on Microfinance in Europe held on Tuesday in Brussels to mark the official launch of the European Progress Microfinance Facility (EPMF), a microfinance initiative designed to give micro companies easier access to credit.

According to Laszlo, the economic crisis has shown the need to develop new ways of creating sustainable employment. “In this context, self-employment and entrepreneurship is one of the pathways to more and better jobs,” the commissioner said.

To promote entrepreneurship, Laszlo suggested the European Union (EU) should increase the availability of microloans for citizens who want to start up or further develop their own business but do not have access to traditional banking loans.

The EU and the European Investment Bank decided in March 2010 to establish the EPMF with 200 million euros (280 million US dollars) of funding. The first microloans supported by Progress Microfinance, officially launched on Tuesday, will be provided within two months time.

Laszlo also believes microloans should be complemented with tailor-made guidance, training and coaching for micro- entrepreneurs, possibly provided by the European Social Fund.

EIB Invests EUR 7m For Rural Projects In The Dominican Republic

From European Investment Bank -

The European Investment Bank, the long-term lending institution of the European Union, has agreed to provide EUR 7m for rural microfinance projects in the Dominican Republic.

The sixth European Investment Bank loan to Banco de Ahorro y Credito ADEMI demonstrates the Bank’s continued engagement to supporting economic growth in the Caribbean.

The European Investment Bank’s support represents the maximum 50% of the overall EUR14m project to enable ADEMI to extend credit to micro, small and medium sized enterprises in rural areas of the Dominican Republic.

The agreement was signed earlier today at ADEMI Head Office in Santo Domingo by Plutarchos Sakellaris, European Investment Bank Vice President responsible for the Caribbean and Manuel Arsenio Ureña, CEO of ADEMI Bank.

“The European Investment Bank’s enhanced support for rural microfinance in the Caribbean reflects our commitment to improving access to financial services by poor communities around the world. We note the continued expansion of access to formal finance even during challenging economic times. Microfinance plays a crucial role in enabling economic growth in rural areas and we are pleased to support ADEMI’s continued contribution to achieving this.” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for the Caribbean

“We welcome the continued support of the European Investment Bank and valuable exchange of experience and expertise between the two institutions.” said Manuel Arsenio Ureña, CEO of ADEMI Bank.

ADEMI Bank started operations in 1983 in the shanty towns around Santo Domingo, capital of the Dominican Republic.

The European Investment Bank has provided more than USD 800m to more than 30 microfinance institutions around the world, supported by USD 33m in technical assistance grants in Sub-Saharan African, Caribbean and Pacific, around the Mediterranean and in Europe.

The European Investment Bank Vice President is currently visiting the Caribbean on an official visit.

The high-level delegation will discuss greater engagement of the European Investment Bank in the region with local ministers and members of the business and finance community, as well as visiting projects financed by the Bank.

Over the last five years the European Investment Bank has provided USD 383 m for projects in the Caribbean.

This has been coordinated through a regional office in Martinique.

The European Investment Bank, the long-term lending institution of the European Union, whose shareholders are the 27 European Union member states, has been active in the Caribbean for over 40 years.

EIB activities follow policies and objectives set down by European Union member states and whose Finance Ministers are the EIB’s Governors.

Italy: EUR 150 million for Veneto Banca Group for SMEs

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