WRITTEN QUESTION E-1066/00

by Glyn Ford (PSE) to the Commission

(4 April 2000)

Subject: Microcredit

Microcredit is an organisation that loans small amounts of money (principally) to women so as to enable them to set up a business of their own with a view to their becoming financially independent.

Could the Commission please indicate what funds the EU has allocated for the expansion of Microcredit? Could it also stipulate what measures it has taken to ensure that the money does eventually reach those that are most in need of it?

Answer given by Mr Liikanen on behalf of the Commission

(18 May 2000)

An indication of the funds allocated specifically to microcredit expansion, separately for example from the amounts devoted to training for candidate entrepreneurs, is unfortunately not available without extensive research through the intermediaries carrying out the programmes mentioned in the Member States.

However, a number of actions undertaken by the Commission involve the use and promotion of micro-credit activities. Those actions are, in large measure, designed to facilitate the access to business start-up finance for small entrepreneurs without sufficient own resources or means of qualifying for access to finance on normal commercial terms, for example, from banks.

Some actions have been undertaken under the European social fund (ESF) programmes. For example, the pilot action local social capital under Article 6 of the ESF is currently experimenting in 31 different areas of the Community the use of small grants to support social cohesion and micro-firm creation projects. During the programming period 1994-1999, Community initiative Employment-NOW (New opportunities for women) has supported a great deal of projects favouring access to finance, particularly offering training. Around one third of its actions are directed towards business creation.

With a view to the mainstreaming of the local social capital pilot project, Regulation (EC) No 1262/1999 of the Parliament and of the Council of 21 June 1999 on the European social fund(1) has provided that a reasonable amount of the Fund appropriations within Objectives 1 and 3 shall be available in the form of small grants. In addition, the Regulation also provides that the Fund shall support activities to promoting entrepreneurship in general (Article 2.1.d) as well as improving women's access to business start-ups (Article 2.1.e). Although the programming of the period 2000-2006 is not sufficiently advanced to provide concrete figures, it is very likely that there will be increased support for women entrepreneurs during that period.

It is important to note that the above actions have not been financed by direct transfer of funds from the Commission to the final beneficiary. The actions are co-financed by the Member States, and money is paid out through intermediaries at a local level. Community funds are transferred in full respect for the principle of subsidiarity, which constitutes a major element of financial security for this type of operation, where local detailed knowledge of the beneficiaries and their needs is crucial to ensure that assistance is well targeted and not misdirected.

(1) OJ L 161, 26.6.1999.