by Keith Zahra
The EIF and the European Commission have launched new COVID-19 support measures under the EaSI Guarantee Instrument (EaSI) to enhance access to finance for micro-borrowers, micro- and social enterprises.
The European Commission explained how the new measures will support micro- and social enterprises as well as individual micro-borrowers hit by the socio-economic consequences of the coronavirus pandemic. The objective of the new COVID-19 measures is to further incentivise financial intermediaries to lend money to small businesses, mitigating the sudden increase in perceived risk triggered by the coronavirus pandemic, and alleviating working capital and liquidity constraints of final beneficiaries targeted by the EaSI programme. Key features of these new measures include higher risk coverage, broadening of certain parameters, such as an increase of the maximum exposure for micro and social enterprises, and more flexible terms.
The new features will be accessible to financial intermediaries, that can potentially serve thousands of companies benefitting from guarantees under the EaSI Guarantee Instrument. To date, the guarantees provided by EIF to financial intermediaries operating in the micro and social finance space have unlocked around EUR 1.4bn of debt financing, allowing more than 85,000 micro and social enterprises across Europe to access financing.