The European Investment Fund (EIF) and microlux, a microfinance institution, have signed the first agreement to support microbusinesses in Luxembourg under the EU Programme for Employment and Social Innovation (EaSI). This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the Investment Plan for Europe, the so-called “Juncker Plan”.
Thanks to the financial backing of the European Commission, EIF is providing a guarantee that will enable microlux to provide EUR 5 million in loans to around 400 microbusinesses in Luxembourg over the next three years.
microlux, the first non-bank microfinance institution in Luxembourg, provides small loans to borrowers who often experience difficulties accessing finance, including vulnerable communities such as refugees and other financially-excluded individuals.
An official launch event is taking place in Luxembourg today under the patronage of the Grand Duchess of Luxembourg.
Jean-Claude Juncker, President of the European Commission, said: “This Commission is focused on being big on big things and small on small things. microlux, on the other hand, plays the valuable role of being big on small loans. I am delighted and proud that our plan is channelling investment to people who would have otherwise been denied access to the finance they need to make their microbusinesses a real success. ”
Speaking at the high-level signature event in Luxembourg, EIF Deputy Chief Executive, Roger Havenith, said: “Micro-borrowers will now have access to this EUR 5 million facility which will be a valuable lifeline when starting a microbusiness. We are delighted to be signing the first EaSI transaction under EFSI in Luxembourg and very proud to support the Luxembourgish microfinance market via this new microcredit provider.”
Remy Jacob, microlux President said: “In Luxembourg, as is the case across Europe, people put their hope into new entrepreneurial ventures which they cannot carry out due to a lack of access to traditional sources of finance. microlux is here to help these people by providing both advice and microfinance to allow them to launch or develop their activities.”
Micro-enterprises wishing to apply for a loan under EFSI can do so by contacting microlux directly.
The Investment Plan is already expected to mobilise around EUR 250 million worth of investments in Luxembourg and a total of around EUR 178 billion across Europe as a whole.
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 enterprises (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. More information on EIF’s work under EFSI is available here.
About the Investment Plan for Europe
The Investment Plan for Europe, the so-called Juncker Plan, is one of President Jean-Claude Juncker’s top priorities. It focuses on boosting European investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI), dubbed the Juncker Fund, is the central pillar of the Investment Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise around EUR 178 billion in total investments and support over 400,000 SMEs across all 28 Member States.
In September 2016, President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths. You can find the latest EFSI figures by sector and by country here.
The European Commission’s Programme for Employment and Social Innovation (EaSI) aims at supporting EU’s objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The EaSI guarantee scheme was launched in June 2015 by the European Commission and managed by EIF.
It provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, notably through loans of up to EUR 25 000. In addition, for the first time, the European Commission is helping social enterprises through investments of up to EUR 500 000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI guarantee scheme, which enables financial intermediaries to reach out to micro-entrepreneurs and social enterprises that would not have been able to gain finance otherwise due to risk considerations.
Microlux is the first microfinance institution in Luxembourg and a joint venture of BGL BNP Paribas, ADA (Association for Development Support), ADIE (French Association for the Right to Economic Initiative) and the EIF (European Investment Fund). Microlux supports and enables the formation and development of businesses by individual clients or social startups lacking access to “traditional” bank credits. To best meet the needs of its clients, microlux offers an extensive range of services with the ultimate goal to promote the right to economic initiative and financial inclusion. Besides coaching, supervision and training through a team of trained volunteers, microlux also provides three types of microcredits up to EUR 25,000.
Microlux has begun operations in June 2016 under the legal structure of a Société anonyme. The company is authorized by the Luxembourg financial regulator, the CSSF and the Ministry of the Economy. The institution is headquartered at the House of Microfinance, at 39 Rue Glesener in Luxembourg City.
Source: The European Commission