EaSI Guarantee Instrument

Publication date
August 1, 2020
Deadline
September 30, 2023
Short description

The EIF’s response measures to the COVID-19 pandemic (as at 24 July 2020).

The EIF and the European Commission (EC) are launching specific COVID-19 support measures under the EaSI Guarantee Instrument. Under this scheme, the EIF will provide enhanced terms and conditions for guarantees and counter-guarantees to incentivise financial intermediaries to continue providing financing to micro-borrowers, micro-enterprises and social enterprises hit by the economic consequences of the coronavirus pandemic.

In light of the budgetary constraints, the new COVID-19 support measures described in the call are available primarily to intermediaries who have already entered into a guarantee contract with the EIF, and to intermediaries that have been already selected. New applicants should note that the total amount of applications already received exceeds the EU budget available under the EaSI Guarantee instrument. Any new applications may be considered should additional resources become available.

Interested entities are invited to consult the full details in the call documents available below, including the addendum detailing the COVID-19 support measures. Existing intermediaries shall be able to benefit from improved guarantee terms without an additional application process by executing an amendment to their agreements in line with the Notice to Financial Intermediaries. The application deadline to the COVID-19 support measures for existing intermediaries  is 31 October 2020.

For a quick overview of the COVID-19 support measures click here.

About the EaSI Guarantee Instrument

The EaSI Guarantee Instrument is funded from the EaSI Programme and is specifically dedicated to microfinance and social entrepreneurship. One of its key objectives is to increase the availability of and access to finance for vulnerable groups wishing to launch their own enterprises, micro-enterprises and social enterprises, both in their start-up and development phases.

The EaSI Guarantee Instrument builds on the success of the European Progress Microfinance Facility (Progress Microfinance) an EU initiative launched in 2010 and managed by EIF, that has so far mobilised more than EUR 440m spread across more than 50 000 micro-borrowers.

How does the EaSI Guarantee Instrument work?

EIF does not provide financing directly to micro-entrepreneurs or social enterprises. Through the EaSI Guarantee Instrument, the EIF offers guarantees and counter-guarantees to financial intermediaries, thereby providing them with a partial credit risk protection for newly originated loans to eligible beneficiaries. Intermediaries are selected after an application under a call for expression of interest followed by a due diligence process. Once selected by EIF, these partners act as EaSI financial intermediaries, and start originating loans to eligible beneficiaries within the agreed availability period.

Thanks to the risk-sharing mechanism between the financial intermediaries and the European Commission, the EaSI Guarantee Instrument enables selected microcredit providers and social enterprise finance providers to expand their outreach to underserved micro and social enterprises, facilitating access to finance for target groups who have difficulties in accessing the conventional credit market.

Who can benefit from the EaSI Guarantee Instrument and what products will be offered by EaSI financial intermediaries?

Under the EaSI Guarantee Instrument, EIF provides capped guarantees and counter-guarantees partially covering the portfolio credit risk in the microfinance and social entrepreneurship segments.

Microfinance

Social Entrepreneurship

Portfolios of loans and certain other debt financing products up to EUR 25,000 for: Portfolios of loans and certain other debt financing products  up to EUR 500,000 for:

Micro-borrowers

Vulnerable persons who have lost or are at risk of losing their job, or have difficulty in entering or re-entering the labour market, or are at risk of social exclusion, or are socially excluded, and are in a disadvantaged position with regard to access to the conventional credit market and who wish to start up or develop their own micro- enterprises.

Micro-enterprises

Micro-enterprises in both start-up and development phase, especially micro-enterprises that employ persons as referred to in the above-mentioned definition of micro-borrowers.

Social Enterprises

Enterprises with either an annual turnover not exceeding EUR 30 million or an
annual balance sheet total not exceeding EUR 30 million, which are not
themselves a collective investment undertaking.

Who is eligible to become a financial intermediary under the EaSI Guarantee Instrument?

Eligible financial intermediaries are public and private bodies established on a national, regional or local level in one or several EaSI participating countries, authorised to provide microcredit for persons and micro-enterprises and/or financing for social enterprises.

Examples of intermediaries potentially eligible for an EaSI Guarantee Instrument are:

  • in the field of microfinance: financial institutions, microfinance institutions/microcredit providers, leasing companies, guarantee schemes, guarantee institutions or other institutions authorised to provide microfinance loans/guarantees or risk-sharing structures according to the applicable legislation;
  • in the field of the social entrepreneurship: financial institutions, guarantee schemes, guarantee institutions, foundations, family offices, social investment funds or other institutions duly authorised to provide loans/guarantees or risk-sharing structures according to the applicable legislation.

At the date of publication of the call for expression of interest, the countries covered by the EaSI Programme comprise EU Member States, Albania, North Macedonia, Iceland, Montenegro, Serbia, Turkey, and may include other associated countries having entered into relevant agreements with the European Union. Additional eligible EFTA, Candidate and Potential Candidate countries may be added to the participating countries.

How to apply for the EaSI Guarantee Instrument

For financial institutions:

If you are eligible, you can apply by downloading all the application documents published here below by 30 September 2023. EIF will select intermediaries after a due diligence process.

For micro-enterprises and social enterprises:
Are you looking for a loan? Download here the list of financial intermediaries currently operating under the EaSI Guarantee Instrument.

For information about finance available under further EU initiatives, please visit: http://europa.eu/youreurope/business/funding-grants/access-to-finance/

Type
  • Other
Geographical focus
  • Albania
  • Europe
  • European Union (EU 28)
  • Montenegro
  • Republic of North Macedonia
  • Serbia
Scientifc field / Thematic focus
  • Cross-thematic/Interdisciplinary

Entry created by Admin WBC-RTI.info on July 29, 2020
Modified on July 29, 2020