Tuesday 8th January 2013
The European Investment Fund and Microfinance Ireland have signed a guarantee agreement aimed at supporting micro-enterprises and self-employed entrepreneurs in Ireland.
The guarantee is given under Progress Microfinance, which is managed by the European Investment Fund on behalf of the European Commission and the European Investment Bank.
Microfinance Ireland can provide loans of less than €25,000 to entrepreneurs and micro-enterprises across Ireland (with less than ten staff) that would otherwise not have access to commercial financing.
Mr Richard Pelly, Chief Executive of the EIF said: “We are pleased to be signing this agreement in Ireland under Progress Microfinance with Microfinance Ireland and to partner with the Government and the Banks in scaling up support for micro-enterprises across the country”.
“I am convinced that this long-term funding will help to benefit micro-enterprises and help them grow at this crucial time. Following the Risk Sharing Instrument signature last month in Dublin, this microfinance transaction reinforces our commitment to providing support for businesses in Ireland“.
Microfinance Ireland was launched in October 2012, with the aim of supporting micro-enterprises which are having difficulty securing credit.
Minister for Research and Innovation, Sean Sherlock TD, said “I am delighted that Microfinance Ireland has obtained the EIF loan book guarantee to support lending to the micro-enterprise sector. Business opportunities to access finance in the current risk averse lending environment are severely restricted with a particularly acute impact on micro-enterprise. Obtaining support through the Progress Microfinance guarantee will greatly assist Microfinance Ireland in providing much needed credit to the micro-enterprise sector, thereby supporting the maintenance of existing jobs, and the creation of new jobs.”
The scheme is aimed at existing and start-up businesses with less than ten employees and a turnover of less than €2m; loans can be used towards business start-up costs, expansion plans or general working capital.
Nationwide, the ten-year scheme is expected to assist 5,500 micro-enterprises, helping to create an estimated 7,700 jobs in Ireland.
Micro-enterprises wishing to apply for a loan under Progress Microfinance can directly contact Microfinance Ireland at 01 260 1007 www.microfinanceireland.ie or their local County or City Enterprise Board.
Notes to Editor:
About the European Progress Microfinance Facility
The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative was established with €203m of funding from the European Commission and the European Investment Bank. Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. It has a particular focus on, but is not restricted to, groups with limited access to the conventional credit market. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc. Loans less than €25,000 are made available through selected intermediaries, participating in the facility. Progress Microfinance does not provide direct financing to micro-entrepreneurs or individuals.
For further information about this initiative please visit: www.ec.europa.eu/epmf
About the EIF
EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital and guarantees 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. The EIF total net commitments to private equity funds amounted to over EUR 6bn at end 2011. With investments in over 370 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF guarantees loan portfolio totalled over EUR 7.6bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About Microfinance Ireland
The Microfinance Fund is being delivered by Microfinance Ireland in line with the Commitments in the Programme for Government and the Action Plan for Jobs 2012. Minister for Jobs, Enterprise and Innovation Richard Bruton launched Microfinance Ireland on Thursday 27th September. This Fund is designed to stimulate lending to sustainable micro-enterprises and is targeted at start-up, newly established, or growing micro enterprises across all industry sectors, employing less than ten people. MFI will provide loans of less than €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
MFI has the role of loan application assessment, loan approvals and declines, management of the loan book, and recoveries. The thrust of MFI’s lending policy will always be focused strongly on the potential sustainability of the business, its ability to repay the loan and the creation and maintenance of jobs.
It works closely with the County and City Enterprise Boards (CEBs) which provide a range of important business supports, including advice, training and mentoring, to micro-enterprises.
Press information – Microfinance Ireland, please contact: Engage Ireland, Sarah Bohan firstname.lastname@example.org or Kerry Graye email@example.com
Press information - EIF, please contact:
David Yormesor, firstname.lastname@example.org, or visit EIF’s website www.eif.org