French social businesses get €400 million boost with EIF support

DATE DE PUBLICATION 12/03/2024

French social businesses get €400 million boost with EIF support

EIF signs two accords with France Active to unlock more funding for social enterprises.

The European Investment Fund (EIF) will facilitate a total of €400 million in business support by France Active, a leading financier of socially committed French firms. The EIF is guaranteeing France Active investments in social enterprises to the tune of €45 million and counter-guaranteeing €355 million of bank loans by its unit France Active Garantie to entrepreneurs with limited access to financing.

As a result, France Active will aim to double the number of beneficiary companies to 1,000 by end-2027, increasing annual support to €90 million, and France Active Garantie will expand its activities by 50% over the same period. This will lead to more than 10,000 companies benefiting from bank-loan guarantees valued at €300 million a year.

“The involvement of Europe – and of the EIF in particular – is essential to the work of France Active,” said Chairman Pierre-René Lemas. “It enables us to carry out our associative project by mobilising public and private funds, banks and management companies for the benefit of fragile entrepreneurs and projects that place social utility at the heart of their model. Supporting our role as guarantor and investor, the EIF provides us with long-term support, which in turn contributes to the development of a more socially responsible economy in all regions.”

The EIF backing results from a guarantee provided through the InvestEU programme, which supports more than €372 billion in investments towards EU policy priorities through 2027.

“Supporting the lending capacity of microenterprises and social enterprises is very important for maintaining job creation and activity in structures essential to social cohesion in France and throughout Europe,” said Fayolle. “Through these two agreements, the EIB Group is delighted to be able to strengthen its long-term relationship with France Active Garantie and France Active, which play an essential role in supporting and developing social entrepreneurship in France”.

Social enterprises supported by France Active through EIF and InvestEU guarantees include the Iron Academy, an association called Le Recho that supports exiled people in France and food supplier Shape-Eat, representatives of which attended the signing ceremony.

“European instruments for microfinance and social enterprises are effective in improving access to financial resources for economic players who need them most,” said EIF Chief Executive Officer Marjut Falkstedt. “This is why the EIF is renewing its collaboration with France Active Garantie and France Active Investissement to strengthen our ability to serve the social finance sector in France.”

European Commissioner for Employment and Social Rights Nicolas Schmit stressed the role of InvestEU.

“InvestEU provides essential support for social enterprises across Europe,” Schmit said. “This new financial agreement will be a catalyst for some 10,000 enterprises operating in France, improving their access to financing. This will help create new jobs and contribute to strengthening the social and solidarity economy, which is a priority for the European Union, while reinforcing social and territorial cohesion.”

Following are the names of the leading representatives of the Iron Academy, Le Recho and Shape-Eat and summaries of the three organisations:

Françoise Candier, director of the Iron Academy

The Iron Academy is a production school located in Stains, Seine-Saint-Denis. It trains young people who have left school without a diploma in the metal trades (CAP Métallier). The two-year course is based on a “doing to learn” approach. Supported by a public-interest association, the production school gives young people a new chance by training them in jobs that are in short supply.

France Active has invested €150,000 alongside Banque des Territoires.

Vanessa Krycève, founder of Le Recho

Le Recho is an association founded in 2016 to support exiled people in France and Europe with dignity. In order to change the way these people are looked at, the association chooses the medium of cuisine based on the principle that it is a unifying language, a driving force for inclusion and solidarity. Le Recho offers a catering service and provides meals for the Ball in Paris’s 18th arrondissement, in addition to all its food-related activities.
France Active invested €30,000 and guaranteed a €60,000 loan from the Nef banking cooperative, up to 65%.

Ananth Purushothaman, founder of Shape-Eat

Ananth Purushothaman created Shape-Eat. He benefitted from the Accès + program: a €3,000 bonus and enhanced support set up as part of the government’s scheme for inclusion through self-employment (Ministry of Labor). He set up his business in the heart of a priority district in Saint-Ouenand offers food products for athletes.

France Active guaranteed 80% of a €60,000 loan from the Caisse d’Epargne Ile de France and granted a €24,000 loan.

About the European Investment Fund

The European Investment Fund, part of the European Investment Bank (EIB) Group, designs and implements financial instruments that enable banks and funds (financial intermediaries) to better serve SMEs. It supports European SMEs by improving their access to financing through a wide range of selected financial intermediaries. Its work with France Active is part of the InvestEU program, which aims to give a further boost to sustainable investment, innovation, social inclusion and job creation in Europe.

About InvestEU

The InvestEU programme provides the European Union with crucial long-term financing, mobilizing substantial private and public funds for a sustainable recovery. It also helps mobilize private investment for the European Union’s political priorities, such as the European Green Deal and the digital transition. The InvestEU program brings together under one roof the various EU financial instruments currently available to support investment in the European Union, making the financing of investment projects in Europe simpler, more efficient and more flexible. The program consists of three elements: the InvestEU Fund, the InvestEU Advisory Centre and the InvestEU Portal. The InvestEU fund is implemented by financial partners who will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will support the investment projects of the implementing partners, increasing their risk-bearing capacity and thus mobilizing at least €372 billion in additional investment.

France Active, the movement of committed entrepreneurs

France Active enables every entrepreneur to get involved in a project with a positive impact. Setting up a business and getting involved in the local community, giving meaning to your project and transforming society: that’s the challenge facing committed entrepreneurs. France Active and its 35 regional associations are there to advise them on their financing projects and give them access to a unique network of economic and social players. With its 2 finance companies, France Active supports more than 36,000 entrepreneurs. The movement mobilized 485 million euros in 2023. Every day, France Active works to develop a more inclusive and sustainable economy. Last year, businesses supported by France Active created or consolidated more than 67,000 jobs.