More than six thousand entrepreneurs have benefited from loans totaling approximately 50 million euros, awarded under the European Progress Microfinance Facility, according to the third annual report for this financial instrument. The report confirms the significant impact of the EPMF on job creation and the employment of unemployed or economically inactive individuals.
First and foremost, the Fund enables self-employment and entrepreneurship among groups that typically face challenges in raising capital, such as young people and minorities. Furthermore, nearly one-third of end users reported that they were unemployed or economically inactive when they applied, and about 80% of supported companies are startups operating for less than three years. Agriculture and trade received the most support again this time, accounting for more than half of the supported enterprises.
Vulnerable Groups Training and mentoring also play an important role in strengthening entrepreneurship. Intermediaries through which the Fund channels resources are contractually obligated to collaborate with organizations by providing training and mentoring. Member states can utilize the European Social Fund to provide assistance in the form of training or upskilling for business starters. Such support has positively impacted the business skills of users and supplemented the resources available from the EPMF.
The current goal of the EPMF is to assist individuals facing difficulties in obtaining traditional bank loans to secure microloans to employ themselves or start their own businesses. The Fund finances loans up to 25,000 euros for unemployed individuals, those whose jobs are at risk, and people from vulnerable social groups (youth, seniors, immigrants, etc.). The aim is not only to provide access to financing but also to achieve a multiplier effect of around 500 million euros, which is accomplished through co-investment from other partners (European Investment Bank, European Parliament). For instance, microfinance intermediaries can obtain guarantees from institutions, which then facilitates access to funds from market investors.
