–
European Commissioner for Employment and Social Rights, Nicolas Schmit, said: “The added value of social enterprises is clear, but often access to finance is the missing link. This EU-supported fund will bring social enterprises together with investors in their early stages so that entrepreneurs can implement their ideas. We must continue to invest in the social economy to create jobs, improve people’s lives and make our societies more resilient. In the context of the current crisis, this is more important than ever. “
In order for social enterprises to develop and implement innovative business solutions, they need access to growth capital. The European Social Innovation and Impact Fund (ESIIF) also brings an innovation with it for investors: they receive partial security for their investment through a guarantee from the European Investment Fund (EIF). The Financing Agency for Social Entrepreneurship (FASE), avesco Financial Services and the European Investment Fund (EIF) have teamed up to make this possible.
Through the guarantee of the European Program for Employment and Social Innovation (EaSI guarantee) which the European Union is making available for the first time in Germany, initial losses from investments by the ESIIF in social enterprises of up to 3.2 million euros on the total fund target volume of 20 million euros are covered. The guarantee will significantly improve the financing of social enterprises and, through the risk protection, attract investors who have so far held back on impact investing.
Investors can still participate in the ESIIF within the next 12 months. Talks with the first innovative social enterprises have already started. The fund will grant its first mezzanine capital in the form of subordinated loans to social entrepreneurial solutions in 2020. The ESIIF is aimed exclusively at German, professional and semi-professional investors. The target volume of the fund is 20 million euros. and the term 10 years (with two options to extend by one year each if required). The broadly diversified target portfolio of around 60 social enterprises from EU countries will generally concentrate on a broad spectrum of fields of activity such as education, the environment, health or civil society.
background
The European Investment Fund (EIF) is part of the European Investment Bank group. Its core task is to support European micro, small and medium-sized enterprises (SMEs) in accessing finance. The EIF develops and implements venture and growth capital as well as guarantee and microfinance instruments for this target group. In doing so, the EIF promotes the objectives of the European Union in terms of innovation, research and development, entrepreneurship, growth and employment.
With the European Program for Employment and Social Innovation (EaSI), the European Union is supporting microfinance and the financing of social enterprises with a total of 193 million euros in the period 2014-2020. The aim is to improve access to microloans, ie loans of up to 25,000 euros, especially for socially disadvantaged people and small businesses. In addition, the European Union is also supporting social enterprises for the first time with investments of up to 500,000 euros. Support for microfinance and social entrepreneurship comes first through the EaSI guarantee, which enables microcredit providers and investors who invest in social enterprises to get involved in businesses they would otherwise not have been able to fund because of the risk. The European Union has chosen the EIF to carry out the EaSI guarantee.
The fund initiator FASE – Financing Agency for Social Entrepreneurship has been working on the financing of social enterprises and the growth of social innovations in Europe for more than six years. FASE builds sustainable bridges between exceptional social enterprises and impact-oriented investors by providing comprehensive advice to social enterprises on financing issues, addressing investors and structuring and accompanying transaction processes. The projects previously supported by FASE with growth capital include, for example, the promotion of young people through an online platform for peer-to-peer tutoring and career guidance or innovative AI data platforms and robot-assisted therapy for people with restricted mobility.
Further information:
Press release: Building sustainable bridges between impact investors and social enterprises: The European Social Innovation and Impact Fund (ESIIF) starts after a successful first closing
Press contact FASE: Christina Moehrle, Tel .: +49 (89) 2422-6187
Press contact European Investment Bank: Christof Roche, Tel .: +352 43 79 89 013
Press contact Commission representation: Gabriele Imhoff, Tel .: +49 (30) 2280-2820
The team at the ERLEBNIS EUROPA visitor center answers queries from citizens by e-mail or by telephone on (030) 2280 2900.
–
