The European Investment Fund (EIF), the branch of the European Investment Bank Group focusing on the financing of enterprises, and Initiative France, the largest financing network for business start-ups, development and succession in France, have concluded a guarantee agreement on microfinancing under the EU Programme for Employment and Social Innovation (EaSI) to increase support for microenterprises and SMEs in France.
With this initiative, EIF is using its EaSI guarantee to support Initiative France in the context of its Initiative Remarquable unsecured loans intended for businesses taking an economically responsible approach and creating jobs.
This operation is the first under the EaSI to benefit from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe. This extension of the guarantee in the Investment Plan for Europe to include the EaSI programme is a way of enhancing the synergies and complementarity of this programme with other sources of EU funding.
Improved access to finance for micro-enterprises and SMEs in France
The micro-enterprises and SMEs which are the target of this initiative often face difficulties in accessing finance, which is vital for their investment and development needs. Thanks to the financial support of the European Commission, EIF provides a guarantee which will allow Initiative France to extend loans to enterprises in France.
This guarantee will allow Initiative France to award more than EUR 10 million in interest-free loans to more than 500 French microenterprises over the next three years.
Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs said: “Boosting investment is one of the Commission's political priorities, which resulted in the launch of the Juncker plan in 2015 and the proposal to extend it 2016. The funds provided in this framework should benefit all companies which innovate and hire, from the largest to the smallest, all over Europe. That is why I am pleased that the European Fund for Strategic Investments is now combined with the Employment and Social Innovation (EaSI) to improve the availability and accessibility of financing for micro-enterprises, which represent a reservoir of growth and employment that is still under-exploited. I hope that this will be the first of many EaSI initiatives that will be supported by EFSI.”
Speaking at the signature event in Paris, EIB Vice-President, Ambroise Fayolle, said: “The Juncker Plan continues to develop in France, with 46 operations signed in France so far, accounting for a total amount of EUR 3.1 billion, which is expected to generate an additional EUR 15.9 billion. This new agreement with Initiative France marks an important milestone in the EIB Group’s support for small French firms. By extending the scheme to businesses in the weakest regions, to job-creators in priority districts and young student entrepreneurs, we will further develop our financing and support aims. I am pleased to see the European Investment Fund (EIF) signing the first agreement of its kind in France with Initiative France. It is excellent news for microenterprises' access to finance and for employment and social cohesion.”
Louis Schweitzer, President of Initiative France explained that: “This new support from the European Investment Fund confirms the effectiveness of the unique Initiative France model in general and of the Initiative Remarquable programme in particular. We are also very proud to be the first beneficiaries in Europe of EU support under its EaSI programme.”
Encouraging responsible entrepreneurship in all regions
The EaSI Guarantee granted by EIF to Initiative France is just one element of the partnership signed in 2014 concerning a Progress guarantee for Initiative Remarquable unsecured loans.
Initiative Remarquable unsecured loans of between EUR 5 and EUR 25 000 (interest-free and without the need to provide security) were specifically devised as a way to fund notable, distinctive businesses on the basis of funds from employee savings schemes.
Complementing traditional unsecured loans granted by platforms of the Initiative France network, the aim of the new loan is to promote businesses which place solidarity and corporate responsibility at the heart of their success. Since its launch in 2014, the scheme has already helped 299 entrepreneurs to obtain EUR 7.4 million of unsecured loans, leading to the creation of almost 1 200 jobs.
These results have convinced EIF to step up its support for Initiative France in order to help it to finance even more socially responsible entrepreneurs. The new agreement signed on 9 February 2017 envisages extending this support to young student entrepreneurs and those in priority urban districts.
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its main task 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. For more information on the work of EIF under the EFSI, click here.
About Initiative France
The aim of Initiative France over the past 30 years has been to maintain and create jobs in all regions by facilitating business start-ups. The challenge in 2016 is still to help any person wishing to start a business to draw up a sound project and to obtain the funding necessary to achieve and develop it, whether they are starting a new business or taking on an existing one and expanding it.
The 222 platforms of the Initiative France network provide unsecured loans to 19 000 entrepreneurs each year, of whom 60% are unemployed, to create and develop over 16 000 businesses, creating more than 40 000 jobs, i.e. 2.5 jobs per business in the first year. The progress of 55 000 entrepreneurs is being followed, and 9 000 are being mentored.
In 2015, EUR 176 million of unsecured loans led to over EUR 1 billion in bank loans. These local associations, well-integrated into their local area, have 950 staff and 16 180 volunteers, including 4 640 business mentors to support new entrepreneurs.
The combination of the mentoring, the loans, and the banking services has helped these enterprises to achieve a 88% survival rate over three years, compared with a national rate of 70 % (source: INSEE).
More on Initiative France: www.initiative-france.fr
Find Initiative France on Twitter: @ InitiativeFR
About the Investment Plan for Europe
The Investment Plan focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment projects. The Investment Plan is already showing results. The projects and financing agreements approved so far under the EFSI are expected to mobilise more than EUR 168 billion in investments in 28 Member States and support some 387 000 SMEs. On 14 September 2016, the European Commission proposed extending the EFSI by increasing its fire-power and duration as well as reinforcing its strong points. The latest EFSI figures by sector and country are available here. For more information, see the FAQs.
About the EaSI
The European Commission’s Programme for Employment and Social Innovation (EaSI) aims to support the EU's objectives of a high level of employment, adequate social protection, combating social exclusion and poverty and improving working conditions. The EaSI guarantee scheme was launched in June 2015 by the European Commission and is managed by EIF.
It provides support to financial intermediaries that offer micro-loans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who wish to set up or develop their business or micro-enterprise, 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 otherwise have been able to obtain finance owing to risk-related concerns.
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