Juncker Plan’s €5m support to 400 Luxembourg micro-businesses

Jean-Claude Juncker

The European Investment Fund and a micro-finance institution have signed the first agreement to provide 5 million euros in loans to around 400 micro-businesses in Luxembourg over the next three years.

Microlux and EIF’s agreement was signed under the EU Programme for Employment and Social Innovation (EaSI) – an agreement made possible through the support of the European Fund for Strategic Investments (EFSI).

The EFSI is the central pillar of the Investment Plan for Europe – the so-called Juncker Plan.

With financial backing from the European Commission, EIF is providing a guarantee that will enable Microlux to provide 5 million euros in loans to around 400 micro-businesses in the country.

Microlux, the first non-bank micro-finance institution in Luxembourg, provides small loans to borrowers who often experience difficulties accessing finance, including vulnerable communities such as refugees and other financially-excluded individuals.

An official launch event is taking place on Wednesday under the patronage of the Grand Duchess of Luxembourg.

Lifeline for starting micro-businesses

Jean-Claude Juncker said: “This Commission is focused on being big on big things and small on small things. Microlux, on the other hand, plays the valuable role of being big on small loans.

“I am delighted and proud that our plan is channelling investment to people who would have otherwise been denied access to the finance they need to make their micro-businesses a real success.”

Speaking at the signature event EIF Deputy Chief Executive, Roger Havenith, added: “Micro-borrowers will now have access to this 5 million euros facility which will be a valuable lifeline when starting a micro-business.

“We are delighted to be signing the first EaSI transaction under EFSI in Luxembourg and very proud to support the Luxembourgish micro-finance market via this new microcredit provider.”

Micro-enterprises wishing to apply for a loan under EFSI can do so by contacting Microlux directly.

The Investment Plan is already expected to mobilise around 250 million euros worth of investments in Luxembourg and a total of around 178 billion euros across Europe as a whole.

Remy Jacob, Microlux President said: “In Luxembourg, as is the case across Europe, people put their hope into new entrepreneurial ventures which they cannot carry out due to a lack of access to traditional sources of finance.

“Microlux is here to help these people by providing both advice and micro-finance to allow them to launch or develop their activities.”

Juncker Plan

The Investment Plan for Europe – the so-called Juncker Plan – is one of President Jean-Claude Juncker’s top priorities. It focuses on boosting European investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.

The European Fund for Strategic Investments (EFSI), dubbed the Juncker Fund, is the central pillar of the Investment Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects.

The projects and agreements approved for financing under the EFSI so far are expected to mobilise around 178 billion euros in total investments and support more than 400,000 SMEs across all 28 member states.

In September 2016 President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths.