The Official Journal of the European Union of April 7th has published the Decision that establishes the European Progress Microfinance Facility for employment and social inclusion.

The Microfinance Facility offers an alternative to those suffering from the effects of the crisis and will help create new jobs. The decision of the European Parliament and the Council establishing a European instrument microfinance for employment and social inclusion - Progress has been published in the Official Journal of the EU on April 7 and will enter into force one day after publication. Ministers of Employment and Social Affairs adopted the instrument in early March 2009 and the European Council ratified it at the end of the same month.

To launch this instrument, the budget of Progress Programme of the EU has been modified by a Decision published in the same OJEU. Some of the 100 million euros of the instrument come from that programme. equipped with the instrument.

This initial budget is expected to leverage €500 million of credit in cooperation with international financial institutions such as the EIB Group. This could result in around 45,000 loans over a period of up to eight years. In addition, the possibility for these same people to benefit from interest rate rebates through the European Social Fund. will make it easier for them to start their new business.

Micro-credit in this Facility means loans under €25,000. It is tailored to micro-enterprises, employing fewer than 10 people (91% of all European businesses), and unemployed or inactive people who want to go into self-employment but do not have access to traditional banking services. 99% of start-ups in Europe are micro or small enterprises and one third of these are launched by people who are unemployed. The Facility will be operational from June 2010.

Background

As part of the EU's response to the crisis, the Commission proposed 'A Shared Commitment for Employment' on 3 June 2009 to step up cooperation between the EU and the Member States together with social partners to tackle the social and employment impact of the crisis. To follow up, the Commission proposed on July 2009 to establish a European Microfinance Facility. The proposal has now been agreed by EU Member States in the Council of Ministers and by the European Parliament.