Decision No 283/2010/EU of the European Parliament and of the Council of 25 March 2010 establishing a European Progress Microfinance Facility for employment and social inclusion

7.4.2010 EN Official Journal of the European Union L 87/1
DECISION No 283/2010/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 25 March 2010
establishing a European Progress Microfinance Facility for employment and social inclusion
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION
,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 175(3) thereof,
Having regard to the proposal from the European Commission,
Having regard to the opinion of the European Economic and Social Committee (1),
Having regard to the opinion of the Committee of the Regions (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) On 7 April 2000 the Commission adopted a communication entitled ‘Acting locally for employment — a local dimension for the European employment strategy’.
(2) The Commission communication of 13 November 2007 entitled ‘A European initiative for the development of microcredit in support of growth and employment’ 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, promoting best practices 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 (Joint action to support microfinance institutions in Europe) 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.
(3) The Commission communication of 24 May 2006 entitled ‘Promoting decent work for all — the EU contribution to the implementation of the decent work agenda in the world’ set out the importance of decent work for all as did the European Parliament resolution of 23 May 2007 on promoting decent work for all (4).
(4) The leaders’ statement following the G-20 Summit in Pittsburgh on 24 and 25 September 2009 contained a commitment to improving access to financial services for the poor, for example through microfinance. The leaders also committed themselves to launching an international financial inclusion expert group which will identify lessons learned on innovative approaches to providing financial services to the poor, promote successful regulatory and policy approaches and elaborate standards on access to financing, financial literacy, and consumer protection.
(5) The European Parliament in its resolution of 24 March 2009 with recommendations to the Commission on a European initiative for the development of microcredits in support of growth and employment requested that the Commission strengthen its efforts to develop microcredits in support of growth and employment. Furthermore, the European Parliament approved 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 co-finance projects for microcredits in particular for disadvantaged target groups.
(6) The ongoing efforts of the Union and of the Member States need to be strengthened to increase the access to, and availability of, microfinance 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 — that is, those who have lost their job, those at risk of losing their job or who have difficulties entering or re-entering the labour market, as well as those who are facing the threat of social exclusion or vulnerable people 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-enterprise, including self-employment — whilst actively promoting equal opportunities for women and men.
(7) The Commission communication of 3 June 2009 entitled ‘A shared commitment for employment’ underlined the need to offer a new chance to unemployed persons and open the road to entrepreneurship for some of Europe’s most disadvantaged groups who have difficulty in accessing the conventional credit market. In addition to existing instruments, specific action is needed to further strengthen economic and social cohesion by reinforcing activities undertaken by the EIB and the European Investment Fund (EIF) and other international financial institutions without prejudice to the activities of the Member States. The Commission therefore announced a proposal for a new EU-wide microfinance facility (hereinafter the Facility) to extend the outreach of microfinance to particular at-risk groups and to further support the development of entrepreneurship, the social economy and micro-enterprises. In order for the Facility to be effective, to have a long-lasting impact, to reach the potential beneficiaries and to serve as a proactive element for both economic and local development policies, Member States can establish a national contact point to promote, coordinate, assess and monitor all the actions taken under the Facility in their respective territories.
(8) An increasing amount of microfinance to vulnerable people who are in a disadvantaged position with regard to access to the conventional credit market in the European Union is provided by non-commercial microfinance institutions, credit unions and banks implementing corporate social responsibility. The Facility should help these providers, which supplement the commercial banking market, by increasing the availability of microfinance to meet the current levels of demand.
(9) In many cases the providers of microfinance in the European Union are commercial banks and should become important partners in the Facility, with a view to re-establishing trust in the credit market and with a focus mainly on customers with no credit standing.
(10) Public and private bodies providing microfinance under this Decision should comply with principles of responsible lending and thereby avoid, in particular, over-indebtedness of persons and undertakings.
(11) In addition to the difficulty of gaining access to finance, social exclusion and the uncertainties of the transition from unemployment or social welfare to self-employment are among the main obstacles to setting up and developing micro-enterprises. European microfinancing instruments can help to support the structures of the social economy which assist people who are excluded with social reintegration and which help them to develop the minimum skills required in order to undertake a lasting business project.
(12) Using Union resources is appropriate and responds to the abovementioned resolution of the European Parliament of 24 March 2009. Furthermore, a single EU-wide facility will concentrate leverage from international financial institutions and avoid a dispersed approach thus increasing microfinance supply in all Member States. In order to capitalise on the experience of international financial institutions and in particular the EIB and the EIF, the Facility should be established on the basis of joint management.
(13) The actions financed by the Facility should be coherent and compatible with other Union 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 Union interventions, in particular the Competitiveness and Innovation Framework Programme (CIP) financial instruments, Jasmine, European Agricultural Fund for Rural Development (EAFRD), European Regional Development Fund (ERDF), Jeremie (Joint European resources for micro to medium enterprises initiative) and the European Social Fund (ESF).
(14) For the purposes of this Decision, ‘microfinance’ should include guarantees, microcredit, equity and quasi-equity extended to persons and micro-enterprises covered by this Decision, microcredit being defined as loans under EUR 25 000. The Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (5) defines a ‘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 should be an appropriate definition for the purposes of this Decision.
(15) For the purposes of this Decision and in line with national provisions, ‘micro-enterprise in the social economy’ should mean a micro-enterprise which produces goods and services with a clear social mission or which provides services to members of the community with a non-profit purpose.
(16) The Facility should be implemented through an appropriate range of actions that include risk-sharing, guarantees, equity and debt instruments offered by international financial institutions to providers of microfinance. In order to increase its effectiveness, the Facility should be coordinated and implemented consistently with European and national financial instruments and national financial institutions,