The European Parliament adopted by 607 votes to 68 with 16 abstentions, a legislative resolution in response to the Commission report on the implementation of the European Progress Microfinance Facility (EPMF).
To recall, the objective of the EPMF is to increase access to microfinance for persons who have lost or are at risk of losing their job, or have difficulties entering or re-entering the labour market, as well as persons who are facing the threat of social exclusion or vulnerable persons who are in a disadvantaged position with regard to access to the conventional credit market and who want to start or further develop their own micro-enterprises, including self-employment.
Parliament stressed the importance of a financial instrument such as the Facility in times of financial crisis in creating new undertakings, promoting new employment and ensuring that unemployed, disadvantaged people and microenterprises have access to financing, while mitigating the risk for microfinance intermediaries (MFIs).
The resolution recommended the following:
Increasing access to microfinance: the report noted that the impact on employment creation was less than initially expected, in spite of the fact that many recipients would have been completely excluded from the credit market were it not for microcredit. It regretted the high number of rejected applications for microfinance (almost 2 000 applications were rejected, partly on grounds of over-indebtedness of persons and undertakings) and the still significant microfinance market gap, despite the increase in the number of micro-borrowers.
Members stressed the need to:
Parliament called for the Facility to take account of the added value of projects in regions with severe and permanent natural or demographic handicaps, such as sparsely populated regions and regions undergoing depopulation, since this will not only stimulate job creation there but also help maintain population levels. Members also emphasised that given the current migration and asylum crisis in particular, micro-financing can act as a fundamental support for refugees and migrants entering the EU labour market.
Parliament welcomed the fact that Commission and the EIF have made the Microfinance and Social Entrepreneurship (MF/SE) axis of the European Union Programme for Employment and Social Innovation (EaSI) operational so as to secure access to money for the beneficiaries.
The Commission and the Member States are encouraged to gather and assess data on the characteristics of microenterprises, their needs and their survival rates, and to propose adjustments to the EaSI Regulation, if necessary, during the mid-term review.
Reaching target groups and social impact reporting: Parliament deplored the fact that, owing to the lack of well-defined social reporting, the social impact of the Facility has not been measured more accurately in terms of job creation, business sustainability and minority group outreach. It called on the Commission, therefore, to adhere to standards for social performance measurements in an empirical way so as to ensure the highest social impact, also with regard to the Europe 2020 targets and to assess whether the definition of target groups, including people with disabilities, needs to be clarified further.
Furthermore, the Commission was called upon to:
Supporting the social economy: Members regretted that the Facility has not funded a significant number of social enterprises. They welcomed the fact, therefore, that a specific percentage of the EaSI budget is dedicated to the funding of social enterprises and encouraged the Commission to closely monitor this new feature and to assess, and if necessary review, the cap stipulated for loans to social enterprises under EaSI.
Mentoring and training services and complementarity with other instruments: Parliament welcomed the possibility under EaSI of funding capacity-building of MFIs and technical assistance for MFIs to improve their professionalisation, service delivery, and gathering and processing of data to allow better feedback about the Facility.
Members considered that the European Social Funds (ESFs) should provide key financing for creating enterprises, viable microfinance and social entrepreneurship, together with mentoring and training programmes. They recommended that the Commission and Member States develop their strategic cooperation with local and regional organisations and institutions regarding EaSI, ESF and other possible national programmes, promoting their cooperation with MFIs and final recipients.
They also called on the Commission and the Member States to ensure that the European Fund for Strategic Investments (EFSI) is available to finance microenterprises.
Microfinance intermediaries: Parliament encouraged the Commission to coordinate ESF and EaSI support in order to improve complementarity between the two programmes, with regard to Microfinance Facilities, focusing among other things on cooperation between MFIs and business support centres co-financed by the ESF. Members recommended that the procedure for access to the instrument be simplified and that agreements between MFIs and the EIF be more flexible and easier to understand, allowing smaller MFIs to make full use of the funding instruments and the EIFs facilities quickly.
The Commission is called upon to strengthen its dialogue with microfinance actors, as well as with stakeholders currently not included, regarding the accessibility, use and design of the products to be offered under Union-funded programmes. Facilitating exchange of best practices among MFIs from different Member States was also encouraged.