Sandra McLellan
Question:11 Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation the target he has set for institutions in this State to draw down support from the EU progress micro enterprise fund. [11327/12]
View answerWednesday, 29 February 2012
Questions (10, 11)
Sandra McLellan
Question:32 Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation the steps he is taking to promote and support bids by credit institutions to access the EU progress microfinance facility; the amount that will be drawn down from this programme; and when this fund will be available to the small and medium enterprises sector. [11326/12]
View answerWritten answers
I propose to take Questions Nos. 11 and 32 together.
The European Progress Microfinance Facility is a European Investment Fund (EIF) initiative to support entrepreneurship and employment through microfinance activities. It was established by the EU Commission in 2010.
It does not directly provide microfinance to either Member States' Governments or entrepreneurs. Instead, following a rigorous due diligence process, selected microfinance providers across the EU who fulfil the requirements are accredited by the EIF and can avail of supports designed to increase lending into the Microenterprise sector.
Specifically, capped guarantees may be provided to eligible intermediaries partially covering their portfolios of micro-loans, or loan facilities may be availed of to increase lending to micro-enterprises. The guarantees provided are intended to mitigate bad debts incurred in the lending operations. Microfinance providers may apply for the guarantee, or for the loan facility, but may not avail of both. 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. To apply to become an intermediary, interested institutions must submit a formal application for Progress Microfinance micro-credit guarantee directly to the EIF. Any EU microfinance institution may apply to the EIF under this Facility and State involvement is not a prerequisite.
I am currently finalising the delivery structures for a State-backed Microfinance Loan Fund to provide loans to the microenterprise sector. This Fund is designed to stimulate lending to sustainable microenterprises and is targeted at start-up, newly established, or growing micro enterprises across all industry sectors, employing not more than 10 people. It will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
Following establishment of the Microfinance lending facility, application will be made for the EIF guarantee facility.