Proposal for a Decision of the European Parliament and of the Council establishing a European Microfinance Facility for Employment and Social Inclusion (Progress Microfinance Facility) {COM(2009)340 final} {SEC(2009) 907}
Date: 2009-07-02
Institutions: European Commission
Subjects: EU action, EU programme, European Employment Strategy, anti-discriminatory measure, gender equality, social integration, social security, working conditions

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.7.2009 
COM(2009) 333 final 

2009/0096 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a European Microfinance Facility for Employment and Social Inclusion 
(Progress Microfinance Facility) 

{COM(2009)340 final} 
{SEC(2009) 907} 

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EXPLANATORY MEMORANDUM 

1. CONTEXT OF THE PROPOSAL 

The main impact of the recession is on people: the top challenge for the EU today must be to 
prevent high  levels  of  unemployment, to boost job creation and pave the way for economic 
renewal,  sustainable  recovery  and  growth.  The  EU  reacted  rapidly  to  the  crisis  through  the 
European Economic Recovery Plan which highlighted the need to counter the effects of the 
crisis on jobs. The initial impact of the Plan is already promising, and social safety nets play 
their stabilising role. However, with labour markets continuing to deteriorate as they react to 
the economic downturn, additional action is needed. 

Europe  must  not  just  tackle  the  recession  but  turn  it  into  an  opportunity  to  create  a  more 
productive,  more  innovative,  better  skilled  and  low  carbon  economy;  one  with  open  and 
inclusive labour markets, offering a more cohesive and equal society and jobs that respond to 
age, gender equality and work/life balance concerns and one which recognises and supports 
entrepreneurship1. The measures needed to combat the social and employment impact of the 
current  crisis  go  hand-in-hand  with  the  necessary  structural  reforms  needed  to  address  the 
long-term challenges of globalisation and demographic and climate change. 

Europe's  labour  markets  will  be  changed  enormously  by  the  crisis.  Workers  and  companies 
must be given the necessary means to adjust to these changing realities: to retain sound jobs, 
enhance skills at all levels, get people back to work and create the conditions for new jobs. 

The Commission Communication "Driving European recovery"2 outlined a number of points 
to help Member States design and implement appropriate and effective employment policies. 
Working  on  this  basis,  the  Spring  European  Council  and  the  three  employment  workshops 
held in Madrid, Stockholm and Prague in April 2009 defined three key priorities: maintaining 
employment,  creating  jobs  and  promoting  mobility;  upgrading  skills  and  matching  labour 
market needs; increasing access to employment. Finally, the Employment Summit of 7 May 
2009  featured  an  exchange  of  views  on  these  priorities,  and  found  common  ground  on  10 
actions3. 

Building on this common effort, the Commission adopted a Communication on 3 June on "A 
shared  commitment  for  employment"4,  the  aim  being  to  step  up  cooperation  between  the 
European Union and the Member States as well as between EU social partners, on these three 
key  priorities,  focussing  on  concrete  initiatives  and  supported  by  all  available  Community 
instruments,  in  particular  the  European  Social  Fund  (ESF)  and  the  European  Globalisation 
Adjustment Fund (EGF). 

In  order  to  alleviate  the  social  impact  of  the  crisis,  it  is  essential  to  retain  and  bring  more 
people  into  the  labour  market,  especially  women,  older  workers  and  other  groups  facing 
discrimination, and to prevent long-term unemployment and inactivity. The best way out of 
exclusion is employment: social Europe starts with jobs – yet even before the crisis, far too 

1 

2 
3 
4 

Commission  Communication  "Think  Small  First",  A  "Small  Business  Act"  for  Europe  -  COM(2008) 
394, 25.6.2008. 
COM(2009) 114, 4.3.2009. 
See: http://ec.europa.eu/social/main.jsp?catId=103&langId=en&eventsId=173&furtherEvents=yes 
COM(2009) 257, 3.6.2009. 

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many EU citizens who were willing and able to join the labour market did not have access to 
a job.  

2. CONTENT  

In the Communication of 3 June, the Commission proposed a new EU microfinance facility 
for employment5 (Progress Microfinance Facility) in order to give the unemployed the chance 
of  a  new  start  and  to  open  the  way  to  entrepreneurship  for  some  of  Europe’s  most 
disadvantaged  groups,  including  the  young.  This  new  Facility  will  extend  the  range  of 
targeted  financial  support  to  new  entrepreneurs  in  the  current  context  of  a  reduced  credit 
supply. Individual entrepreneurs and founders of microenterprises will also be assisted by way 
of  mentoring,  training,  coaching  and  capacity  building,  in  addition  to  interest-rate  support 
from the ESF. 

The Progress Microfinance  Facility will  add  to  other  Community  programmes  by  providing 
risk  sharing  instruments,  debt  and  equity  financing.  It  will  capitalise  on  the  experience  of 
international  financial  institutions  for  example  the  EIB  Group  (European  Investment  Bank 
and European Investment Fund). Based on a joint management arrangement, the international 
financial  institutions  will  provide  further  leverage  by  supporting  banking  and  non  banking 
providers of microfinance throughout the European Union.  

3. SUBSIDIARITY AND PROPORTIONALITY 

Given  the  currently  reduced  level  of  lending  and  the  dramatic  fall  in  outstanding  loans  (as 
demonstrated  in  the  ex-ante  evaluation  accompanying  the  present  proposal),  ongoing 
Community  and  national  efforts  need  to  be  strengthened  to  increase  the  supply  of  micro-
credits  to  a  sufficient  scale  and  within  a  reasonable  time-frame  so  as  to  address  the  high 
demand  of  those  who  need  it  most  in  this  period  of  crisis  i.e.  unemployed  or  vulnerable 
people who want to start or develop micro-enterprises, including self-employment but do not 
have access to 'commercial' bank credits.  

Using  Community  resources  is  appropriate  and  responds  to  the  Resolution  of  the  European 
Parliament  of  24  March  20096.  Further,  a  single  facility  will  concentrate  leverage  from 
international financial institutions. Finally, a pan-EU facility will avoid a dispersed approach 
thus increasing micro-finance supply in all Member States.  

4. CHOICE OF LEGAL INSTRUMENT 

The  Commission  proposal  is  to  establish  the  Progress  Microfinance  Facility  by  a  Decision 
which defines the roles and responsibility of the Commission only and does not create rights 
or obligations for Member States or individuals. A Decision is therefore the instrument best 
adapted to achieve the desired objective. 

5. BUDGETARY IMPLICATIONS 

In  line  with  the  Inter-institutional  Agreement  of  17  May  20067  between  the  European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound  financial 

5 
6 
7 

COM(2009) 257, 3.6.2009. 
P6_TA-PROV(2009)0166 
(2006/C 139/01) 

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management, the Facility is to be established by a reallocation of the existing budget. Under 
the  terms  of  the  2006  Inter-institutional  agreement,  the  EP  added  an  additional  EUR  114 
million8 to the budget for the Progress programme thus increasing the budget from EUR 628 
800 000 in the Commission's initial proposal to EUR 743 250 000. This additional financing 
was  to  have  been  applied  progressively  in  the  later  years  of  the  programme  i.e.  from  2009. 
After examining all possible options, the funding would come from a reallocation of EUR 100 
million  (over  4  years)  from  the  Progress  Programme9  to  the  new  European  Microfinance 
Facility for Employment and Social Inclusion (the Progress Microfinance Facility). This EUR 
100  million  from  the  existing  budget  could  leverage  more  than  EUR  500  million,  in  a  joint 
initiative with international financial institutions, in particular the EIB Group. 

8 
9 

€ 100 million in 2004 prices. 
Decision  No  1672/2006/EC  of  the  European  Parliament  and  of  the  Council  of  24 October  2006 
establishing  a  Community  Programme  for Employment  and  Social  Solidarity  —  Progress  (OJ  L  315, 
15.11.2006, p. 1). 

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2009/0096 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a European Microfinance Facility for Employment and Social Inclusion 
(Progress Microfinance Facility) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
159(3) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Economic and Social Committee, 

Having regard to the opinion of the Committee of the Regions, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty, 

Whereas: 

(1) 

(2) 

The  Commission  Communication  "A  European  initiative  for  the  development  of 
micro-credit in support of growth and employment"10 identified four priority areas for 
action:  improving  the  legal  and  institutional  environment  in  the  Member  States, 
changing the climate in favour of employment and entrepreneurship, promotion of best 
practises and providing additional financial capital for microfinance institutions. As a 
first step in implementing this agenda, the Commission and the European Investment 
Bank  (EIB)  created  JASMINE  in  2008  which  provides  mentoring  for  non-bank 
microcredit finance institutions and a financing window for a global amount of EUR 
20 million offered by the EIB. 

The  European  Parliament  in  its  resolution  of  24  March  2009  requested  that  the 
Commission  reinforces  its  efforts  to  develop  microcredits  in  support  of  growth  and 
employment and offered an additional EUR 4 million of support for a pilot action to 
be implemented in the context of the JASMINE framework. The European Parliament 
also called on the Commission to cofinance projects for microcredits in particular for 
disadvantaged target groups. 

(3) 

The ongoing Community and national efforts need to be strengthened to increase the 
supply of micro-credits to a sufficient scale and within a reasonable time-frame so as 
to  address  the  high  demand  of  those  who  need  it  most  in  this  period  of  crisis  i.e. 

10 

COM(2007) 708. 

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(4) 

(5) 

(6) 

(7) 

unemployed or vulnerable people, including the young who want to start or develop a 
micro enterprise including self-employment but do not have access to credit. 

The  Commission  Communication  "A  Shared  Commitment  for  Employment"11 
underlined  the  need  to  offer  a  new  chance  to  the  unemployed  and  open  the  road  to 
entrepreneurship  for  some  of  Europe’s  most  disadvantaged  groups,  including  the 
young.  In  addition  to  existing  instruments,  specific  action  is  needed  to  further 
strengthen  economic  and  social  cohesion  by  reinforcing  activities  undertaken  by  the 
European Investment Bank and the European Investment Fund and other international 
financial  institutions  without  prejudice  to  the  activities  of  the  Member  States.  The 
Commission  therefore  announced  a  proposal  for  a  new  EU  microfinance  facility  to 
deepen the outreach of microfinance to particular at-risk groups and to further support 
the development of entrepreneurship, the social economy and micro-enterprises. 

Using  Community  resources  is  appropriate  and  responds  to  the  Resolution  of  the 
European  Parliament  of  March  2009.  Further,  a  single  pan-EU  facility  would 
concentrate  leverage  from  international  financial  institutions  and  avoid  a  dispersed 
approach  thus  increasing  micro-finance  supply  in  all  Member  States.  In  order  to 
capitalise on the experience of international financial institutions and in particular the 
European  Investment  Bank  and  the  European  Investment  Fund  the  Progress 
Microfinance Facility would be established on the basis of joint management. 

The actions financed by the Facility should be coherent and compatible with the other 
Community policies and comply with the provisions of the Treaty and of acts adopted 
under it. The activities of the Facility should be complementary to other Community 
interventions, in particular the CIP financial instruments, JASMINE and the European 
Social Fund. 

For  the  purposes  of  this  decision,  “microfinance”  refers  to  micro-credit  and  risk-
sharing  coverage.  The  Commission  Recommendation  2003/361/EC  of  6  May  2003 
concerning  the  definition  of  micro,  small  and  medium-sized  enterprises12  defines 
“micro-credit”  as  loans  under  EUR  25  000  and  “micro-enterprise”  as  an  enterprise 
employing less than 10 people, including self employment, and whose annual turnover 
and/or annual balance sheet total does not exceed EUR 2 million which are appropriate 
definitions for the purpose of this Decision; 

HAVE DECIDED AS FOLLOWS: 

Article 1 
Establishment  

1. 

A European Microfinance Facility for Employment and Social Inclusion, called the 
Progress Microfinance Facility (hereinafter “the Facility”), is hereby established. 

11 
12 

COM(2009) 257, 3.6.2009. 
OJ L 124, 20.5.2003, p. 36. 

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Article 2 
Objective 

1. 

The Facility shall provide Community resources to increase access to micro-credits 
for:  

(a) 

(b) 

(c) 

persons who have lost or are at risk of losing their job and want to start their 
own micro-enterprise, including self-employment; 

disadvantaged  persons,  including  the  young,  who  want  to  start  or  further 
develop their own micro-enterprise, including self-employment;  

micro-enterprises in the social economy which employ persons who have lost 
their job or which employ disadvantaged persons, including the young. 

Article 3 
Budget 

1. 

2. 

3. 

4. 

The financial contribution from the Community budget for the Facility for the period 
from 1 January 2010 to 31 December 2013 shall be EUR 100 million.  

The annual appropriations shall be authorised by the budgetary authority within the 
limits of the financial framework. 

The total budget for support measures referred to in Article 4 (1) (d) shall not exceed 
1% of the budget of the Facility as set out in paragraph 1. 

The  financial  contribution  shall  cover  the  full  cost  of  the  Facility,  including 
management  fees  for  international  financial  institutions  referred  to  in  Article  5(2) 
managing the Community contribution as well as any other eligible costs.  

Article 4 
Eligible actions and beneficiaries 

1. 

The  Facility  shall  be  implemented  by  using  the  following  types  of  actions,  as 
appropriate:  

(a) 

guarantees and risk-sharing instruments; 

(b) 

equity instruments; 

(c) 

debt instruments; 

(d) 

support measures, such as communication activities, monitoring, control, audit 
and  evaluation  which  are  directly  necessary  for  the  effective  and  efficient 
implementation of this Decision and for the achievement of its objectives. 

2. 

The  Facility  shall  be  open  to  public  and  private  bodies  established  in  the  Member 
States which provide microfinance to persons and micro-enterprises in the Member 
States. 

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Article 5 
Management 

1. 

2. 

3. 

4. 

The  Commission  shall  manage  the  Facility  in  accordance  with  Council  Regulation 
(EC, Euratom) No 1605/2002. 

To implement the actions referred to in Article 4(1), except for the support measures 
referred  to  in  point  (d)  of  Article  4(1),  the  Commission  shall  conclude  agreements 
with  international  financial  institutions,  in  particular  with  the  European  Investment 
Bank (EIB) and the European Investment Fund (EIF), in accordance with Article 53d 
of Council Regulation (EC, Euratom) No 1605/2002 and Article 43 of Commission 
Regulation  (EC,  Euratom)  No  2342/2002.  These  agreements  shall  contain  detailed 
provisions  for  the  implementation  of  the  tasks  entrusted  to  them,  including  the 
necessity to ensure additionality with national schemes. 

Proceeds,  including  dividends  and  reimbursements,  received  by  the  international 
financial  institutions  referred  to  in  paragraph  2  may  be  re-invested  by  them  into 
actions referred to under Article 4(1) (a), (b) and (c) for a period of 6 years after the 
starting date of the Facility. Upon closure of the Facility, the remaining balance due 
to the European Communities shall be repaid to the general budget of the European 
Communities. 

The international financial institutions referred to in paragraph 2 of this Article shall 
conclude  written  agreements  with  the  public  and  private  providers  of  microfinance 
referred to in Article 4 (2) laying down their obligations to use the resources made 
available from the Facility in accordance with the objectives set out in Article 2 and 
to  provide  information  for  the  establishment  of  the  annual  reports  referred  to  in 
Article 8 (1).  

5. 

The budget for support measures referred to in Article 4 (1) (d) shall be managed by 
the Commission. 

Article 6 
Compliance 

Actions  financed  by  the  Facility  shall  comply  with  the  provisions  of  the  Treaty  and  of  acts 
adopted under it. 

Article 7 
Protection of the Communities' financial interests 

1. 

The  Commission  shall  ensure  that,  when  actions  financed  under  this  Decision  are 
implemented,  the  financial  interests  of  the  Community  are  protected  by  the 
application of measures to prevent fraud, corruption and any other illegal activities, 
by effective checks and by the recovery of amounts unduly paid and, if irregularities 
are detected, by effective, proportional and dissuasive penalties, in accordance with 
Council Regulation (EC, Euratom) No 2988/9513, Council Regulation (Euratom, EC) 

13 

OJ L 312, 23.12.1995, p. 1. 

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2. 

3. 

1. 

2. 

3. 

1. 

No  2185/9614,  and  Regulation  (EC)  No  1073/1999  of  the  European  Parliament  and 
the Council15. 

For  the  Community  actions  financed  under  this  Decision,  OLAF  has  the  power  to 
carry  out  investigations  on  the  basis  of  Regulation  (EC,  Euratom)  No  2988/95  and 
Regulation  (Euratom,  EC)  No  2185/96,  which  shall  apply  to  any  infringement  of  a 
provision  of  Community  law,  including  infringements  of  a  contractual  obligation 
stipulated  on  the  basis  of  the  facility,  resulting  from  an  act  or  omission  by  an 
economic  operator,  which  has,  or  would  have,  the  effect  of  prejudicing  the  general 
budget  of  the  European  Union  or  budgets  managed  by  it,  by  an  unjustified  item  of 
expenditure. 

All implementing measures resulting from this Decision shall provide a reference to 
the  above  mentioned  paragraphs  and  provide,  in  particular,  for  supervision  and 
financial  control  by  the  Commission  or  any  representative  authorised  by  it,  and  by 
audits by the European Court of Auditors, if necessary on-the-spot audits. 

Article 8 
Annual report 

The Commission shall receive annual implementation reports from the international 
financial institutions referred to in Article 5(2) setting out the supported activities in 
terms of financial implementation, distribution of funding with regard to sectors and 
type  of  beneficiaries,  applications  submitted,  contracts  concluded,  actions  funded, 
results and, where possible, impact.  

For  the  first  time  in  2011  and  before  31  December  of  each  year,  the  Commission 
shall  present  to  the  European  Parliament  and  to  the  Council  a  quantitative  and 
qualitative  annual  report  on  the  activities  under  this  Decision  in  the  previous  year. 
The  annual  report  shall  be  based  on  the  implementation  reports  referred  to  in 
paragraph 1 and focus mainly on the results achieved and shall in particular contain 
information  relating  to  applications  submitted,  contracts  concluded,  actions  funded 
including  their  complementarity  with  other  Community  interventions,  notably  the 
ESF.  

The  annual  report  will  be  transmitted,  for  information,  to  the  European  Economic 
and Social Committee and the Committee of the Regions. 

Article 9 
Evaluation 

The Commission shall carry out interim and final evaluations at its own initiative and 
in close cooperation with the international financial institutions referred to in Article 
5(2).  The  interim  evaluation  shall  be  completed  four  years  after  the  start  of  the 
Facility and the final evaluation at the latest one year after the end of the mandate(s) 
given  to  the  international  financial  institutions  referred  to  in  Article  5(2).  The  final 

14 
15 

OJ L 292, 15.11.1996, p. 2. 
OJ L 136, 31.5.1999, p. 1. 

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evaluation  shall,  in  particular,  examine  the  extent  to  which  the  Facility  as  a  whole 
has achieved its objectives.  

2. 

The  results  of  the  evaluations  will  be  transmitted,  for  information,  to  the  European 
Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions. 

Article 10 
Entry into force 

This Decision shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL 

Progress Microfinance Facility  

2. 

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

EMPLOYMENT, SOCIAL AFFAIRS and EQUAL OPPORTUNITIES 

ABB 04 04 Employment, Social solidarity and Gender Equality 

3. 

BUDGET LINES 

3.1. 

Budget lines: 

New Budget Lines 

04 04 13 Progress Microfinance Facility 

04 01 04 11 Progress Microfinance Facility – administrative expenditure 

3.2. 

Duration of the action and of the financial impact: 

01/01/2010 – 31/12/2013 

3.3. 

Budgetary characteristics (add rows if necessary): 

Budget line 

Type of 
expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

04 04 13 

04 01 04 11 

Non-
comp 

Non-
comp 

Diff 

YES 

NO 

Non 
Diff 

YES 

NO 

NO 

NO 

No 1a 

No 1a 

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4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA) 

EUR million (to 2 decimal places) 

Expenditure type 

Section 
no. 

2010 

2011 

2012 

2013 

> 
2013 

Total 

Operational expenditure16 

Commitment 
Appropriations (CA) 

8.1 

Payment  Appropriations 
(PA) 

a 

b 

24.75 

24.75 

24.75 

24.75 

99.00 

9.00 

16.00 

20.00 

20.00 

34.00 99.00 

Administrative expenditure within reference amount17 

& 
Technical 
administrative  assistance 
(NDA) 

8.2.4 

c 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT  

0.25 

0.25 

0.25 

0.25 

1.00 

Commitment 
Appropriations 

Payment 
Appropriations 

a+c  25.00 

25.00 

25.00 

25.00 

100.00

b+c  9.25 

16.25 

20.25 

20.25 

34.00  100.00

Administrative expenditure not included in reference amount18 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

Administrative  costs,  other 
than  human  resources  and 
not 
associated 
included 
reference 
in 
amount (NDA) 

costs, 

0.25 

0.25 

0.25 

0.25 

1.00 

8.2.5 

d 

8.2.6 

e 

Total indicative financial cost of intervention  

TOTAL  CA 
cost 
Resources 

of 

including 
Human 

a+c+d
+e 

25.25 

25.25 

25.25 

25.25 

101.00 

16 
17 
18 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
Expenditure within article xx 01 04 of Title xx. 
Expenditure within chapter xx 01 other than articles xx 01 04 or xx 01 05. 

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TOTAL  PA 
cost 
Resources 

of 

including 
Human 

b+c+
d+e 

Co-financing details 

9.50 

16.50 

20.50 

20.50 

34.00 

101.00 

If the proposal involves co-financing by Member States, or other bodies (please specify 
which),  an  estimate  of  the  level  of  this  co-financing  should  be  indicated  in  the  table 
below (additional lines may be added if different bodies are foreseen for the provision of 
the co-financing): 

EUR million (to 3 decimal places) 

Co-financing body 

…………………… 

TOTAL CA including co-
financing 

f 

a+c
+d+
e+f 

2010 

2011 

2012 

2013 

Total 

25.25 

25.25 

25.25 

25.25 

101.00 

4.1.2.  Compatibility with Financial Programming 

X 

Proposal is compatible with existing financial programming. 

The  proposal  is  linked  with  the  proposal  of  a  revision  of  the  financial 
amount  of  the  programme  Progress,  reduced  by  €  100  million  to  be 
allocated to the Microfinance Facility. 

Proposal will entail reprogramming of the relevant heading in the financial 
perspective. 

Proposal may require application of the provisions of the Interinstitutional 
Agreement19  (i.e.  flexibility  instrument  or  revision  of  the  financial 
perspective). 

(cid:133) 

(cid:133) 

4.1.3.  Financial impact on Revenue 

X 

Proposal has no financial implications on revenue 

(cid:133) 

Proposal has financial impact – the effect on revenue is as follows: 

NB:  All  details  and  observations  relating  to  the  method  of  calculating  the 
effect on revenue should be shown in a separate annex. 

19 

See points 19 and 24 of the Interinstitutional agreement. 

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Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]

20

Prior to
action 
[Year 
n-1] 

a) Revenue in absolute terms 

b) Change in revenue 

 ∆ 

(Please  specify  each  revenue  budget  line  involved,  adding  the  appropriate 
number of rows to the table if there is an effect on more than one budget line.) 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – 
see detail under point 8.2.1. 

Annual requirements 

2010 

2011 

2012 

2013 

Total 
number 
human resources 

of 

3 

3 

3 

3 

5. 

CHARACTERISTICS AND OBJECTIVES 

Details  of  the  context  of  the  proposal  are  required 
in  the  Explanatory 
Memorandum.  This  section  of  the  Legislative  Financial  Statement  should  include 
the following specific complementary information: 

5.1. 

Need to be met in the short or long term 

In  the  context  of  the  economic  crisis,  the  Progress  Microfinance  Facility  is  designed  to 
offer a new chance to the unemployed and give opportunity to entrepreneurship for some 
of Europe's most disadvantaged groups. 

The economic crisis requires immediate action to assist those who lost their jobs or are 
facing  social  exclusion  and  want  to  start  or  further  develop  their  own  business.  The 
combination  of  the  general  credit  squeeze  with  the  status  of  newly  unemployed,  means 
that  many  people  who  would  either  become  self-employed  or  start  a  micro  enterprise 
cannot  do  so.  Further,  the  target  group  of  ‘ESF  type  of  beneficiaries21’  has  insufficient 

20 
21 

Additional columns should be added if necessary i.e. if the duration of the action exceeds 6 years 
In  particular  those  considered  as  being  'non-bankable',  i.e.  not  having  access  to  normal  credit 
systems; young people, or those who live in circumstance of financial uncertainty (single mothers, 
disabled, migrants, redundant workers).  

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14 

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access to micro-credit as main stream banks in particular consider this group as too risky 
and cost intensive (the latter due to the relatively small amounts of loans)..  

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal 
with other financial instruments and possible synergy 

The  Commission  has  recognised  the  important  role  micro-credit  can  play  in  its  2007 
Communication. The Communication explains that the take-up of micro-credits has been 
well  below  the  potential  demand  due  to  the  relatively  high  risk  profile,  the  transaction 
costs and the lack of intermediaries in some Member States.  

The  main  Community  wide  instrument  currently  available  for  financing  establishment 
and  growth  of  small  businesses  is  the  Competitiveness  and  Innovation  Framework 
Programme  (CIP).  The  programme’s  SME  guarantee  facility  for  micro-loans  provides 
loan  guarantees  which  makes  it  possible  for  banks  and  non-bank  microfinance 
institutions  such  as  for  example  the  Spanish  MicroBank  and  the  French  ADIE 
organisation  to  make  more  debt  finance  available  to  micro-enterprises  by  reducing  the 
their  exposure  to  risk.  The  facility  includes  co-,  counter-  and  direct  guarantees  to 
financial intermediaries for loans of up to € 25 000 to micro-enterprises with up to nine 
employees, particularly entrepreneurs starting a new business.  

ESF and EGF both foresee the possibility for Member States to use the Funds for micro-
credit,  but  this  has  not  been  taken  up  by  the  Member  States.  In  light  of  the  urgency  to 
react to the current crisis, awareness raising initiatives to increase the take-up would be 
too slow.  

JASMINE is a joint initiative of the Commission and the EIB Group for developing the 
sector  of  micro-credit  providers.  It  contains  a  technical  assistance  facility  for  capacity 
building financed by the Commission and a co-financing facility supported by the EIB (€ 
20 million). The JASMINE facility is managed by the EIF.  

To  foster  the  development  of  micro-credit  in  Europe,  the  European  Parliament  has 
adopted  a  preparatory  action  with  a  budget  of  €  4  million  for  2009,  in  particular  to 
develop  a  seed  fund  for  non-banking  institutions.  This  action  is  currently  implemented 
within the JASMINE framework.  

The Progress Microfinance Facility will inject money (€ 100  million  over 4  years)  into 
the  microfinance  structures  through  international  financial  institutions,  thus  improving 
access to micro-credits for those that are not normally considered bankable. 

5.3. 

Objectives,  expected  results  and  related  indicators  of  the  proposal  in  the 
context of the ABM framework 

An  additional  specific  objective  is  added  to  the  ABB  activity  04  04  –  Employment, 
Social Solidarity and Gender Equality: 

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15 

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Provide assistance to unemployed people and disadvantaged people, including the young, 
who want to start or further develop their own business. 

Two indicators will help to measure the outputs: 

–  Volume of credit 

–  Number of beneficiaries of a loan. 

5.4.  Method of Implementation (indicative) 

Show below the method(s)22 chosen for the implementation of the action. 

ٱ 

ٱ 

ٱ 

ٱ 

ٱ 

ٱ 

ٱ 

Centralised Management 

Directly by the Commission 

Indirectly by delegation to: 

ٱ 

ٱ 

Executive Agencies 

Bodies  set  up  by  the  Communities  as  referred  to  in  art.  185  of  the 
Financial Regulation 

National public-sector bodies/bodies with public-service mission 

Shared or decentralised management 

With Member states 

With Third countries 

X 

Joint management with international organisations (please specify) 

Mandates to be signed by the Commission with international financial institutions such as 
EIB/EIF. 

6. 

MONITORING AND EVALUATION  

6.1.  Monitoring system 

For  the  first  time  in  2011  and  before  31  December  of  each  year, the  Commission  shall 
present  to  the  European  Parliament  and  to  the  Council  a  quantitative  and  qualitative 
annual report on the activities in the previous year. The annual reports shall be based on 

22 

If more than one method is indicated please provide additional details in the "Relevant comments" 
section of this point. 

EN 

16 

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the  implementation  reports  received  from  the  international  financial  institutions 
examining  the  supported  activities  in  terms  of  financial  implementation,  applications 
submitted, contracts concluded, actions funded, results and, where possible, impact. 

6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

An ex-ante evaluation is attached to the proposal for a Progress Microfinance Facility. It 
has been carried out by the Commission and contains information about the needs to be 
met, the objectives to be achieved, the risks linked with the proposal and the alternative 
scenarios. 

6.2.2.  Measures  taken  following  an  intermediate/ex-post  evaluation  (lessons  learned 

from similar experiences in the past) 

The ex-ante evaluation reviews the existing Community initiatives on micro-credit, such 
as Jasmine, CIP programme.  

The proposal for a Progress Microfinance Facility is in synergy with the existing actions 
and substantially enhances both effectiveness and likely success of these actions. 

6.2.3.  Terms and frequency of future evaluation 

The Progress Microfinance Facility shall be subject to interim and final evaluations. Such 
evaluations  shall  examine 
issues  such  as  relevance,  coherence  and  synergies, 
effectiveness,  efficiency,  sustainability,  utility  and,  where  possible  and  appropriate, 
distribution  of  funding  with  regard  to  sectors  and  type  of  beneficiaries.  The  final 
evaluation  shall,  in  addition,  examine  the  extent  to  which  the  Progress  Microfinance 
Facility as a whole has achieved its objectives. 

The  interim  evaluation  of  the  Facility  shall  be  completed  4  years  after  the  start  of  the 
Facility  and  the  final  evaluation  at  the  latest  one  year  after  the  end  of  the  mandate(s) 
given to the international financial institutions. 

7. 

ANTI-FRAUD MEASURES  

The Commission must ensure that, when actions financed under the present Decision are 
implemented, the financial interests of the Community are protected by the application of 
preventive measures against fraud, corruption and any other illegal activities, by effective 
checks and by the recovery of amounts unduly paid and, if irregularities are detected, by 
effective, proportional and dissuasive penalties, in accordance with Council Regulations 
(EC, Euratom) No 2988/95 and (Euratom, EC) No 2185/96 and with Regulation (EC) No 
1073/1999 of the European Parliament and of the Council.  

For the Community actions financed under this Decision, an irregularity as referred to in 
Article  1(2)  of  Regulation  (EC,  Euratom)  No  2988/95  means  any  infringement  of  a 

EN 

17 

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provision of Community law or any breach of a contractual obligation resulting from an 
act  or  omission  by  an  economic  operator  which  has,  or  would  have,  the  effect  of 
prejudicing the general budget of the Communities, or budgets managed by them, by an 
unjustifiable item of expenditure. 

EN 

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8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

Commitment appropriations in EUR million (to 1 decimal place) 

(Headings 
of 
Objectives,  actions 
and outputs should 
be provided) 

OPERATIONAL 
OBJECTIVE  No.1 
23……… 

Type of output 

Av. 
cost 

2010 

2011 

2012 

2013 

> 2013 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

Provide  assistance  to  unemployed  people  and  disadvantaged  groups,  including  the  young,  who  want  to  start  or  further  develop  their  own 
business. 

Action 1……… 

Implement the facility through mandates to international financial institutions 

- output 1 

- output 2 

Volume of credit 
(in M€) 

number 
beneficiaries 

of 

60.0 

100.0 

100.0 

100.0 

140.0 

5 450 

9 090 

9 090 

9 090 

12 730 

500.0 

45 450 

TOTAL COST 

25.0 

25.0 

25.0 

25.0 

100.0 

The prudent estimation of the leverage impact of the facility is that the volume of credit should be about € 500 M over the 4 years. 

Based  on  information  available  from  the  European  Microfinance  Network  (EMN),  the  estimated  average  loan  is  11,000  €.  For  a 
volume of loans of € 500 million, the number of beneficiaries should be 45,450. It is also estimated that the average job creation is 1.2 
per loan, so 45,450 * 1.2 = 54,540 

23 

As described under Section 5.3 

EN 

19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of 
post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

2010 

2011 

2012 

2013 

A*/AD 

1 

1 

1 

1 

B*, 
C*/AST 

Officials 
or 
temporary 
staff24 
(XX 01 
01) 

2 

2 

2 

2 

Staff  financed25  by 
art. XX 01 02 

staff26 
Other 
financed  by  art.  XX 
01 04/05 

TOTAL 

3 

3 

3 

3 

8.2.2.  Description of tasks deriving from the action 

The main tasks to implement the action are: 

–  negotiate mandates with international financial institutions 

–  review and approve transactions 

–  monitor the implementation of the programme 

–  produce an annual implementation report  

–  examine  synergies  within 

the  Progress  Microfinance  Facility  and  with  other 

complementary Community programmes and in particular the European Social Fund 

8.2.3. 

Sources of human resources (statutory) 

(When more than one source is stated, please indicate the number of posts originating from 
each of the sources) 

(cid:133) 

Posts currently allocated to the management of the programme to be replaced 
or extended 

24 
25 
26 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

20 

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(cid:133) 

(cid:133) 

X 

(cid:133) 

Posts pre-allocated within the APS/PDB exercise for year n 

Posts to be requested in the next APS/PDB procedure 

Post  to  be  redeployed  using  existing  resources  within  the  managing  service 
(internal redeployment)  

Posts required for year 2010 although not foreseen in the APS/PDB exercise of 
the year in question  

The needs for human and administrative resources shall be covered within the allocation that 
can be granted to the managing DG in the framework of the annual allocation procedure in the 
light of budgetary constraints. 

8.2.4.  Other  Administrative  expenditure  included  in  reference  amount  (XX  01  04/05  – 

Expenditure on administrative management) 

EUR million (to 3 decimal place) 

Budget line 

04 01 04 11 

2010 

2011 

2012 

2013 

TOTAL 

Technical 

1 
and 
assistance (including related staff costs) 

administrative 

Executive agencies27 

Other 

technical 

and 

administrative 

assistance 

- intra muros  

- extra muros 

Total  Technical  and  administrative 
assistance 

0.250 

0.250  0.250  0.250 

1.000 

8.2.5.  Financial cost of human resources and associated costs not included in the reference 

amount 

EUR million (to 3 decimal places) 

Type of human resources 

2010 

2011 

2012 

2013 

Officials and temporary staff (XX 01 
01) 

0.122 

0.122 

0.122 

0.122 

Total 

0.488 

27 

Reference should be made to the specific legislative financial statement for the Executive Agency(ies) 
concerned. 

EN 

21 

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Staff  financed  by  Art  XX  01  02 
(auxiliary, END, contract staff, etc.) 

(specify budget line) 

Total cost of Human Resources 
and associated costs (NOT in 
reference amount) 

0.128 

0.128 

0.128 

0.128 

0.512 

0.250 

0.250 

0.250 

0.250 

1.000 

Calculation– Officials and Temporary agents 

Reference should be made to Point 8.2.1, if applicable 

1 * 122.000 = 122.000 per year 

Calculation– Staff financed under art. XX 01 02 

Reference should be made to Point 8.2.1, if applicable 

2 * 64.000 = 128.000 per year 

8.2.6.  Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

2010 

2011 

2012 

2013 

TOTAL 

XX 01 02 11 01 – Missions 

XX 01 02 11 02 – Meetings & Conferences 

XX 01 02 11 03 – Committees28  

XX 01 02 11 04 – Studies & consultations 

XX 01 02 11 05 - Information systems 

 2 

Total 

Other  Management 

Expenditure (XX 01 02 11) 

3 

Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

Total Administrative expenditure, other 
than human resources and associated 
costs (NOT included in reference 

28 

Specify the type of committee and the group to which it belongs. 

EN 

22 

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amount) 

Calculation - Other administrative expenditure not included in reference amount 

EN 

23 

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