A new microfinance facility to help those affected by the recession set up their own businesses has been proposed the European Commission.
The fund would have an initial budget of €100m to provide microcredit to small businesses and those who have lost their jobs as a result of the downturn.
The Commission said the fund could eventually reach €500m as part of a joint initiative with financial institutions including the European Investment Bank (EIB).
According to the Commission, the fund could provide 45,000 loans over a period of up to eight years. It would be available to enterprises employing less than 10 people, or unemployed individuals without access to traditional funding who wish to become self-employed.
Employment and social affairs commissioner, Vladimír Špidla, said: “The economic crisis will lead to 3.5 million job losses in the EU this year. The financial crisis has dried up credit to those wishing to start or develop their own businesses.
“We want to offer a new start to the unemployed through easier access to credit to set up or develop new businesses. And we want to help small businesses to develop further despite the crisis. This will help create new jobs.”
The proposal for the new Progress Microfinance Facility, which the Commission hopes to be in operation by 2010, is awaiting approval from the European Parliament.
© Crimson Business Ltd. 2009
