Legal measures to make it easier for people who have lost or risk losing their jobs to get credit to start up their own businesses were backed by the European Parliament on Tuesday.

A "European Progress Microfinance Facility" is to make available "micro-credits" (up to €25,000) to people who want loans to start or grow very small firms (10 people or less and a turnover of less than €2 million), but are unable to obtain them on conventional credit markets. 

MEPs agreed to make €100 million available for the Facility over four years - as proposed by the European Commission, but stressed during the debate that these funds do not have to come from the Progress programme for employment and social solidarity, which was set up to help vulnerable groups of people. The Commission had proposed that the Microfinance Facility be funded from this programme, as it already had received an additional €114 million, at Parliament's request.

To ensure that the Facility can start in early 2010, Parliament agreed to release €25 million euro from the EU's 2010 budget, which will be put to a vote on Thursday. For the three remaining years, there is, for the moment, no agreement between Parliament and Council on the resources for the Facility.

Functioning

The Facility is to be open to public and private bodies in the Member States that provide micro-finance to persons and micro-enterprises. It is to make the €100 million available to them over 4 years through joint management arrangements with the EIB group (European Investment Bank and European Investment Fund).

The Facility is scheduled to come into force in early 2010.