Page 46 - Annual Report 2010

ANNUAL REPORT 2010

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established microfinance intermediaries (MFI). EIF has developed its know-how in the field through progressively managing addi t ional mandates, which include the European Parliament Preparatory Action (EPPA), RCM Micro, CIP, JEREMIE and the Joint Action to Suppor t Microfinance Institutions in Europe (JASMINE).

In 2010, EIF significantly scaled up its microfinance ac-tivity with the launch of the European Progress Microfi -nance Facility (EPMF) which now serves as an “umbrella” initiative to group EIF’s microfinance activities. Under this initiative, EIF manages a wide range of financial instru-ments aimed at supporting the diverse needs of Europe’s microfinance intermediaries.

The table below shows EIF's microfinance signatures in 2010.

General overview

Microfinance consists mainly of micro-credits, typically very small loans  4 tailored towards micro-enterprises  5 and people who want to become self-employed but do not have access to traditional banking services.

Given that 99% of start-ups are micro or small enterprises and that one-third of those were launched by unemployed individuals, ef fective support for the European micro­ finance sector is an important instrument in developing this young market segment. Microfinance is expected to have considerable impact on job creation and entrepre-neurship, particularly in the aftermath of the financial crisis.

EIF has been involved in the microfinance sector since 2000, mainly via guarantees and securitisation activities. Guarantees were concluded with a broad selection of f inancial intermediar ies, ranging f rom non -bank financial institutions that are close to sustainability to well

4 Below EUR 25 000.

5 Any enterprise with less than 10 employees and less than EUR 2m yearly turnover.

Equity and loan activity Resources Geographic focus Signatures

PerMicro EPPA Italy 1.0 Vaba Banka RCM Croatia 5.0 Qredits EPPA The Netherlands 0.8

Subtotal 6.8

Guarantee activity

MicroStart EPMF Belgium 0.1 Qredits EPMF The Netherlands 1.3

Subtotal 1.4

Total 8.2