21 june 2013
AECM Annual Seminar Rome, Italy
EIF signs agreements to support microfinance in SpainNews - 26/01/2012
On 18th January, the European Investment Fund and ICREF (The Institute of Credit and Finance of the Region of Murcia) signed the first agreement under Progress Microfinance in Spain to benefit micro-enterprises and self-employed entrepreneurs with a € 8 million loan agreement.
The Institute of Credit and Finance of the Region of Murcia (ICREF), entity under the Regional Ministry of Economy and Finance, was created in 2007 and became operational in 2009. It is a public institution, fully owned by the Regional Government of Murcia. It was created with the purpose of raising funding in the national and international capital markets on behalf of the Regional Government of Murcia (so far, ICREF has issued, on behalf of the Regional Government of Murcia, over € 890m of debt); and developing the regional economic and business activities, including the development of SMEs and microenterprises.
ICREF, has committed to almost tripling the loan amount provided under the EIF agreement, which means that a total loan amount of up to € 20m will be made available to Spanish micro-businesses for investments and working capital.
This transaction was signed under the European Progress Microfinance Facility (Progress Microfinance), funded by the European Commission and the European Investment Bank and managed by the European Investment Fund, being the 14th signature under this facility. The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative is established with EUR 203 million of funding from the European Commission and the European Investment Bank. EIF acts as Management Company on behalf of the EU Microfinance Platform FCP-FIS - European Progress Microfinance Fund, the main vehicle through which Progress Microfinance is implemented. 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.
On 26thJanuary, the EIF also signed an agreement to extend its with MicroBank under the CIP programme, allowing it to provide additional loans and extending its reach to 18 000 additional SMEs. This agreement and its extension is intended to demonstrate the European Union and EIF's continued commitment to cooperating with this Spanish financial institution.
Microbank's signed guarantee agreement with the EIF gave the institution a guarantee to provide micro loans to SMEs. The extension allows the institution to further enhance SMEs access to debt finance by providing more financing for start ups and individuals wishing to start their own businesses in Spain. Until today, MicroBank financed 128.250 projects for a total amount of € 807,1 million. The new agreement between MicroBank, the social bank of “la Caixa”, and the will allow issuing €200 million in microloans over the years 2012 and 2013. This financing will target start-ups or growth investments of 18.000 new Investment projects, potentially creating or maintaining 27.000 new jobs. Previously, the EIF already supported MicroBank with €240 million in microlending from 2008 to 2011.
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