Guarantees for intermediaries under Progress Microfinance

EIF provides to selected intermediaries capped guarantees partially covering their portfolios of micro-loans or guarantees on micro-loans granted to micro-enterprises, including self-employed people, female entrepreneurs, young entrepreneurs, entrepreneurs belonging
to a minority group, entrepreneurs with a disability, sole traders etc.

Depending on the type of intermediary and its activity, EIF offers two micro-credit guarantee products under the European Progress Microfinance Facility:

*See : European Commission's Recommendation 2003/361/EC

Who is eligible to apply as an intermediary under Progress Microfinance?

Eligible intermediaries are any public and private institutions that provide microfinance loans and/or guarantees to individuals or micro-enterprises established in the EU Member States. These could include:

• Financial institutions
• Microfinance institutions
• Guarantee institutions
• Other institutions authorised to provide microfinance loans/guarantees

How EIF selects intermediaries

EIF will examine the proposals in chronological order of receipt, using best business practices and avoiding any conflict of interest, and will pre-select applications in accordance with a pre-selection procedure. Satisfactory applications will be followed up with an on-site due diligence visit. Pre-selected applications are proposed to the EIF Board of Directors and to the European Commission on behalf of the European Union for approval. By pre-selecting applications, EIF does not bind itself to entering into a micro-credit guarantee or any other agreement with the applicant institution, nor is the institution bound to entering into a micro-credit guarantee with EIF. The selection of intermediaries will take into account, inter alia, the following selection criteria:

• Financial standing
• Operational capability
• Ability to provide the necessary data to EIF
• Ability to comply with the terms and conditions of the agreement
• Expected impact in terms of financing volumes, number of final beneficiaries and geographical reach
• For clarification, in order to achieve a well diversified and homogeneous portfolio and to allow a reasonable estimation of the portfolio risk profile, the intermediary will be requested to include in the portfolio a minimum of approximately 100 micro-loans per year
• Ability to comply with the reporting requirements

Read more: 

• Definition of micro-enterprise - European Commission recommendation 2003/361/EC