The European Investment Fund (EIF), a European Union agency that finances small and medium-sized enterprises (SMEs), recently made its first direct equity investment in a microfinance institution (MFI), thus acquiring 20.4 percent of the shares in PerMicro, an Italian MFI for EUR 1 million (USD 1.3 million) [1]. The investment is intended to facilitate the offering of loans of up to EUR 25,000 (USD 34,400) from PerMicro to microentrepreneurs to start or expand businesses.
The agreement between EIF and PerMicro was finalized subsequent to a capital increase of EUR 4 million (USD 5.5 million) that was subscribed to by all of the other shareholders in PerMicro: Oltre Venture, Fondazione Paideia, UBI Banca, Fondazione CRT e PhiTrust and other unnamed private shareholders.
The investment by EIF represents the first of its kind under the European Parliament Preparatory Action (EPPA), a EUR 4 million (USD 5.5 million) pilot program of the European Parliament that was initiated to develop microfinance in Europe [1].
As of 2010, PerMicro has a gross loan portfolio of EUR 5 million (USD 6.8 million) and operates four branches in Italy. PerMicro does not report to the US nonprofit data provider Microfinance Information Exchange (MIX).
By Medha Ravi, Research Associate
About the European Investment Fund (EIF):
The European Investment Fund (EIF) is a provider of risk finance to small and medium-sized enterprises (SME) in Europe. The fund is a public-private partnership whose shareholding structure includes the European Investment Bank, the European Union – represented by the European Commission – and 29 financial institutions from the European Union Member States, plus Turkey and Croatia. EIF is a member of the EIB Group, the parent organization of the European Investment Bank.
About PerMicro:
Established in 2007 in Italy, PerMicro is a microfinance institution (MFI) that lends to microentrepreneurs with a focus on immigrants. PerMicro also provides skills training to its clients such as business planning and mentoring. As of 2010, PerMicro has a gross loan portfolio of EUR 5 million (USD 6.8 million) and operates four branches in Italy. PerMicro does not report to the US nonprofit data provider Microfinance Information Exchange (MIX).
Source and Resources:
[1] European Investment Fund (EIF) news article: “EIF and PerMicro make financial resources available for micro-entrepreneurs in Italy”, http://www.eif.org/what_we_do/microfinance/news/2011_permicro-microfinance-italy.htm
MicroCapital.org story, August 2, 2010, “MICROCAPITAL BRIEF: European Investment Fund Implements $32m Guarantee Under the European Progress Microfinance Facility for Employment and Social Inclusion”, https://www.microcapital.org/microcapital-brief-european-investment-fund-implements-32m-guarantee-under-the-european-progress-microfinance-facility-for-employment-and-social-inclusion/
MicroCapital.org story, November 21, 2007, “MICROCAPITAL STORY: Small Fund for Big Loans: European Union Announces Plans to Establish EUR 15m “Microfinance Fund” for EUR 25k Loans to European Businesses”, https://www.microcapital.org/microcapital-story-small-fund-for-big-loans-european-union-announces-plans-to-establish-eur-15m-microfinance-fund/
MicroCapital’s Microfinance Universe Profile: The European Investment Fund (EIF), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Investment+Fund
MicroCapital’s Microfinance Universe Profile: PerMicro, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PerMicro
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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