The European Investment Fund (EIF) and Finnish bank Oma Säästöpankki Oyj (OmaSp) have signed two guarantee agreements for social entrepreneurship and microfinance respectively in Finland under the EU Programme for Employment and Social Innovation (EaSI). This new financing agreement was made possible by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe.
The microfinance agreement allows OmaSp to provide EUR 40 million loans to 2,600 micro-entrepreneurs over the next 5 years in Finland. Micro-entrepreneurs will be able to benefit from loans at a reduced interest rate with lower collateral requirements under the EU supported programme. OmaSp will primarily target self-employed and micro-entrepreneurs living in rural and peripheral urban areas.
Under the social entrepreneurship agreement OmaSp will support approximately 100 social enterprises with EUR 10 million loans, primarily cooperatives, contributing to increased social and economic inclusion.
European Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said: "With these new agreements, thousands of Finnish entrepreneurs will get better access to the funding they need to turn their ideas into concrete projects. This shows again that the Investment Plan is not only delivering on its commitment to create jobs and growth in the EU, but is also actively promoting social fairness and equal opportunities."
European Commissioner Marianne Thyssen, responsible for Employment, Social Affairs, Skills and Labour Mobility, said: "Thanks to EU support, we will make €40 million available to support about 2,600 micro-enterprises in Finland. The European Commission is fully committed to boosting employment in Europe and getting more people into jobs, including the most vulnerable people in the labour market."
EIF Chief Executive, Pier Luigi Gilibert, said: “These new EaSI guarantees enable OmaSp to boost its lending to social and micro-enterprises, who often struggle to access finance from traditional lenders. Micro-entrepreneurs and social enterprises in Finland will now have access to an additional EUR 50 million to start up, grow and expand their businesses.”
OmaSp CEO, Pasi Sydänlammi, said: “We are happy that EIF has selected us as their partner for two EaSi guarantees. It is our pleasure to be the first bank in Finland to enable these to boost Micro-entrepreneurs and Social Enterprises. Entrepreneurs and their enterprises represent a significant part of our growing customer base in Finland. These new guarantees allow us to better allocate microloans or finance to improve competitiveness and success of Finnish micro-entrepreneurs and social enterprises in rural and peripheral urban areas.”
The EaSI Guarantee scheme was launched in June 2015. It is funded by the European Union and managed by the European Investment Fund. Social and micro-enterprises wishing to apply for a loan under EaSI, can contact OmaSp branches.
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
The European Commission's Programme for Employment and Social Innovation ("EaSI") aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The microfinance and social entrepreneurship axis of the EaSI programme provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective 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 is supporting social enterprises through investments of up to EUR 500,000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to (potential) entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. It is also being implemented through the ‘EaSI Capacity Building Investments Window’ to reinforce the capacity of financial intermediaries in the areas of microfinance and social finance through equity investments mostly. The European Commission has selected EIF to implement the EaSI Guarantee and the EaSI Capacity Building Investments Window.
Furthermore, the Commission is reinforcing the social dimension of the EFSI for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.
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.
For further information on EU microfinance and social entrepreneurship support please refer to:
Oma Säästöpankki Oyj is a Finnish bank and Finland’s largest savings bank. We serve over 135,000 customers with 270 experts across 40 branches all over Finland. Oma Säästöpankki is owned by the Finnish savings bank foundations, Oma Cooperatives and emloyees. Our goal is to offer the best banking service in town for all daily financial matters both via branches and digital service channels. Local and close omasp.fi
About the Investment Plan for Europe
The Investment Plan for Europe (the Juncker Plan) focuses mainly on removing obstacles to investment, increasing the visibility of investment projects while providing them with technical assistance, and making smarter use of new and existing financial resources. By October 2018, the Investment Plan had already mobilised over EUR 344 billion of investment across Europe.