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Job creation: Progress Microfinance proves success as tool for micro-entrepreneur start-ups

The European Progress Microfinance Facility has proved to be a successful tool to create jobs, particularly amongst groups with difficulties to raise finance from more traditional sources, by helping start-ups by micro-entrepreneurs, according to the second annual report on its implementation, published yesterday. Through this Facility twenty microfinance providers throughout the European Union have received guarantees or funding (debt or equity) to facilitate their lending to would-be micro-entrepreneurs worth €170 million over the coming two to three years.

European Commissioner of Employment, Social Affairs and Inclusion László Andor commented on the findings of the report: "Progress Microfinance is clearly an effective facility both for microfinance providers and entrepreneurs. By providing access to microfinance to create jobs, particularly for disadvantaged people, the Facility has proved to be an important social investment tool that should continue in the future."

The facility, launched together with the European Investment Bank Group at the end of 2010, helps microcredit providers selected by the European Investment Fund (EIF) to increase their micro-lending volumes. It also gives incentives to serve "risky" target groups e.g. young people who cannot put up sufficient collateral for a traditional bank loan.

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.


The European Progress Microfinance Facility was launched in 2010 to help people who would otherwise have difficulties getting a loan to start or develop their own business by providing access to finance. The facility provides guarantees and funded instruments to microfinance intermediaries. The €203 million funding for the initiative comes from the European Commission and the European Investment Bank (EIB) for the programming period 2010–13.

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.

Progress Microfinance provides loans of up to €25,000 and aims to generate a total loan volume of €500 million for 46,000 micro-borrowers across Europe until 2019. The European Investment Fund (EIF) manages Progress Microfinance on behalf of the European Commission and the European Investment Bank, selecting microcredit providers in the Member States to make microcredit available to micro-borrowers. The microcredit providers can be private or public banks or non-bank microfinance institutions operating at national, regional or local levels.

Examples of concrete results of the Progress Microfinance Facility include:

  • a young Portuguese waiter, who had been working under precarious conditions in a restaurant for several years, was able to start his own restaurant in the South of Portugal thanks to a microloan from Millennium BCP with a Progress Microfinance guarantee

  • a Romanian couple who, after losing their jobs in a mining company, successfully started a farm thanks to a microloan from Patria Credit

  • a Spanish lady was able to open a hairdressing salon in Murcia thanks to a small loan from ICREF/Mare Nostrum and so re-enter the labour market, after a childcare break of several years.

EU Programme for Social Change and Innovation

The new EU Programme for Social Change and Innovation (PSCI) was proposed by the Commission in October 2011 in the framework of the legislative package for cohesion policy for the period from 2014 until 2020. The PSCI would extend the support given to microcredit providers under the current European Progress Microfinance Facility. Together with the European Social Fund (ESF) and the European Globalisation Fund (EGF), it would form the third pillar of the EU Initiative for Employment and Social Inclusion 2014-2020.

The PSCI would integrate three existing programmes and extend their coverage: Progress (Programme for Employment and Social Solidarity), EURES (European Employment Services) and the European Progress Microfinance Facility. It would enable the Commission to increase policy coherence and impact of its instruments, which have common objectives, thus contributing to the Europe 2020 Strategy for Jobs and Growth.

The PSCI would include investments for developing and expanding social enterprises, i.e. businesses whose primary purpose is social, rather than to maximise profit distribution to private owners or shareholders. It would also support policy coordination, sharing of best practices, capacity-building of microfinance institutions and testing of innovative policies, with the aim that the most successful measures be up-scaled, with support from the ESF.

Further information

Annual report 2011 on the implementation of Progress Microfinance:

Information about Progress Microfinance (including list of selected microfinance providers):

Information for potential microcredit providers:

László Andor's website:

Follow László Andor on Twitter:!/LaszloAndorEU

Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion:

See also MEMO/12/567

Contacts :

Jonathan Todd (+32 2 299 41 07)

Nadège Defrère (+32 2 296 45 44)

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