Historic Agreement between EU and Fredericks Foundation
The European Investment Fund (EIF) and Fredericks Foundation have signed a guarantee agreement aimed at supporting more than 1,000 micro-enterprises in the UK under the EU Programme for Employment and Social Innovation (EaSI).
This new guarantee agreement allows Fredericks Foundation to provide a total of GBP 5.5 million (c. EUR 8 million) to over 1,000 micro-entrepreneurs, many of whom face difficulties in accessing credit from traditional banking sources. The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund.
EIF Chief Executive, Pier Luigi Gilibert said: “I am delighted to be signing our first microfinance agreement in the UK with Fredericks Foundation. This EaSI guarantee will help to support disadvantaged micro-entrepreneurs, many of which were previously unemployed, to access finance to start-up, and develop their companies. We also expect to sign similar transactions in the coming months.”
Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: "The European Commission is firmly committed to helping micro-entrepreneurs in the EU, and giving them the means to succeed as a pathway to fighting social and financial exclusion. Today's agreement will enable over 1,000 micro-enterprises in the UK to receive a loan to help them take root and develop, and thereby creating jobs and stimulating the economy from the foundation up."
Duncan Parker, Fredericks Foundation CEO said: Fredericks Foundation is thrilled to have signed the EaSI guarantee agreement. EaSI will enable us to continue to be a great choice for philanthropists who believe in sustainable solutions and therefore support many more people in the UK who need finance to start or expand a business. With a loan from Fredericks, people can gain economic independence for themselves and create jobs for others in their communities.
Micro-enterprises wishing to apply for a micro-loan under EaSI can directly contact Fredericks Foundation branches in the UK.
EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, such as microfinance, social finance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal with interested parties directly to provide support under the EaSI Guarantee.
About the Programme for Employment and Social Innovation
Under the EU Programme for Employment and Social Innovation (EaSI), the European Commission supports microfinance and social entrepreneurship finance with an overall envelope of EUR 193 million for the period 2014-2020. The aim is to increase access to microfinance, which includes microcredit i.e. loans of up to EUR 25,000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the European Commission will also support social enterprises through loans of up to EUR 500,000. The microfinance and social entrepreneurship support will be first implemented through the EaSI Guarantee, which will enable financial intermediaries to reach out to (potential) micro-entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. The European Commission has selected EIF to implement the EaSI Guarantee.
About the European Investment Fund
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (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. EIF’s total net commitments to private equity funds amounted to over EUR 8.8 billion at the end of 2014. With investments in over 500 funds, 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. EIF’s guarantees loan portfolio totalled over EUR 5.6 billion in over 350 operations at end 2014, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
Do I qualify for EaSI support? All loans are eligible for EaSI support except for the following:
(i) Have been involved in bankruptcy, debt relief order or insolvency proceedings in the 5 years prior to date of application
(ii) Not resident and business not operated in the UK
(iii) Has not been declined finance by a bank or other recognized lending institution
(iv) Is currently involved in insolvency proceedings
(v) Business not legal
(vi) Has substantial focus on one or more Restricted Sector activities - see below
(vii) Loan amount exceeds £18,000
1. Illegal Economic Activities
Any production, trade or other activity, which is illegal under the laws or regulations of the home jurisdiction for such production, trade or activity (‘Illegal Economic Activity”).
Human cloning for reproduction purposes is considered an Illegal Economic Activity.
2. Tobacco and Distilled Alcoholic Beverages
The production of and trade in tobacco and distilled alcoholic beverages and related products.
3. Production of and Trade in Weapons and Ammunition
The financing of the production of and trade in weapons and ammunition of any kind. This
restriction does not apply to the extent such activities are part of or accessory to explicit European
Casinos and equivalent enterprises.
5. IT Sector Restrictions
Research, development or technical applications relating to electronic data programs or solutions,
(i) aim specifically at:
(a) supporting any activity included in the Restricted Sectors referred to under 1. to 4.(Inclusive) above;
(b) internet gambling and online casinos; or
(ii) are intended to enable to illegally:
(a) enter into electronic data networks; or
(b) download electronic data
6. Life Science Sector Restrictions
When providing support to the financing of the research, development or technical applications
(i) human cloning for research or therapeutic purposes; and
(ii) Genetically Modified Organisms ("GMOs”),
Qualifying loans benefit from a guarantee funded by the European Union under the Programme for Employment and Social Innovation (EaSI)