The European Investment Fund (EIF) and Credal and Hefboom have signed two social entrepreneurship guarantee agreements in Belgium.
These new financing agreements were made possible by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe. They were also supported by the EU Programme for Employment and Social Innovation (EaSI).
This new guarantee agreements allow Credal and Hefboom to provide loans to 530 start-up and developing social enterprises across Belgium over the next 5 years. Social-entrepreneurs will be able to benefit from loans exempted from collateral requirements under the EU supported programme. Credal and Hefboom will primarily target start-ups and companies that have suffered during the financial crisis.
European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: "With social entrepreneurship, Belgium will boost its economic growth while supporting its most vulnerable citizens. Today’s agreements will bring much needed resources to 530 social entrepreneurs in Belgium. With the Juncker Plan, we continue to support social cohesion in Europe."
EIF Chief Executive, Pier Luigi Gilibert, said: “These new EaSI guarantees enable Credal and Hefboom boost their lending to social-enterprises, who often struggle to access finance from traditional lenders. Credal and Hefboom are members of FEBEA – the European Federation of Ethical Banks – and we hope that these transactions help sign more such deals throughout Europe via this network.”
Credal President, Isabelle Philippe, said: “When we first started getting requests for finance from Social Enterprises, it was a bit of a revolution at Credal. Traditionally our activity was based on lending to Not-for-profits. And then we had to create a specific loan for them « Impact Plus ». And to our surprise, many of these new enterprises were certainly profit oriented, but preferred a Social Financier like us to a Bank, because we shared many common values. This activity has been growing since and now thanks to the EaSI Guarantee we hope to finance many more Social Enterprises in Belgium.”
Hefboom President, Antoon Vandevelde, said: “The EaSI Guarantee enables Hefboom to fund even more innovative, social and durable projects. These often young initiatives or social-enterprises, focus on generating social impact, rather than building up financial assets. So those projects are riskier, and less attractive for regular financiers. So with the EaSI Guarantee Hefboom can help realise dreams.”
The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund. Social-enterprises wishing to apply for a loan under EaSI, can contact Credal and Hefboom 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.
Investment Plan for Europe
The Investment Plan for Europe, known as the “Juncker Plan”, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. EFSI has already yielded tangible results. The projects and agreements approved for financing under EFSI are expected to mobilise almost €380 billion in investments, including €8.4 billion in Belgium, and support 842 000 SMEs in the 28 Member States.
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 €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 €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 €193 million under the EaSI programme) to about €1 billion, mobilising some €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:
CREDAL is an alternative financing cooperative founded in 1984 with a specific social vision: to promote fairer society and to reinforce social cohesion. Its main objective is to offer savings products for social purposes and to support social projects through credit and counseling. At the end of 2018, Crédal has more than 34 million euros in invested funds that represent the investments made by 3300 co-operators (constantly increasing). www.credal.be
Hefboom (www.hefboom.be) was founded in 1985. The 1.300 shareholders of the cooperative organisation are socially engaged institutional and midfield organizations, as well as individuals. Hefboom provides credits to social and sustainable projects and enterprises, as well as microcredits to entrepreneurs having no access to bank credits. Since 2018 Hefboom also started financing projects and organizations in the cultural sector. Hefboom was one of the main founders of Trividend (www.trividend.be), an investment fund providing risk capital to social enterprises.
Hefboom also supports social enterprises with management advice and coaching, and provides other services, such as project management and shareholders management mainly to cooperatives and non-profit organisations.
Clients of Hefboom are social actors active in domains such as social and shelter workshops, local service economy, social care and cooperatives. Other clients are active in welfare, health, equal opportunities, employment care, insertion companies, social-cultural sector, ecology and sustainability.
1 March 2019