How can the European Investment Bank and our members learn from each other?
With the launch of our position paper on the financing of social services in December 2013, we have started looking at how private sources can support the financing of social services and more broadly the social sector. We have initiated a dialogue with the European Investment Bank (EIB) and the European Investment Fund (EIF) as possible partners (read my previous blog on our participation in the civil society seminar with the EIB Board of Directors).
We are interested in supporting our members in getting EIB financing. We are also proposing recommendations on how to unlock the European Fund for Strategic Investments (EFSI) for the social sector (read the recommendations arising from the Annual Convention of Inclusive Growth). Lastly, we want to cooperate with EIB and EIF to ensure that its money contributes to quality jobs, services and infrastructures, as well as promotion of human rights.
Two of our members have been quite active in exploring possible cooperation with EIB and EIF. The European Association of Service Providers for Persons with Disabilities (EASPD) launched a study to unlock EFSI for social services and is discussing a project proposal with the European Commission.
Last week at our member Housing Europe’s event, their Spanish, French, Hungarian and British members presented project ideas for social and affordable housing they hope will attract EIB funding. For example, the French members are interested in working at EU level to fight against fuel poverty. Across the EU, 20 million people live in poor dwellings with no or limited energy efficiency. This would be a safe, clear and easy to monitor investment by EIB. In the UK the Housing Finance Corporation relies on collaboration with housing associations. According to their representative, borrowing from EIB through the Housing Finance Corporation is cheaper than government borrowing.
What do EIB and EIF do for the social sector? In the area of housing, EIB finances social and affordable housing, both new buildings and refurbishment of old ones, while it doesn’t finance maintenance. It also doesn’t finance private housing, except for energy efficiency measures. As EIB cannot provide loans under €50 million, joint ventures among small cities, small housing associations and NGOs are needed. In France EIB invests €50 million out of 110 in acommodations for migrants and asylum seekers, while the UK is the biggest borrower when it comes to urban development. In addition, product diversity is interestingly rising: from student accommodations, to assisted living and accommodation for migrants and refugees.
In another recent workshop, the EIB Group illustrated that it is providing a service mix of financial services with technical assistance to strengthen microfinance institutions’ ability to support their clients towards professional inclusion. Patrick Sapy from microStart, a financial intermediary in Belgium, testified that they have been able to make 60% of small entrepreneurs sustainable. 80% of their clients live below the poverty line and 70% have a migrant background. Their activities have resulted in government’s savings of 1,09 million € and increased revenue by 1,12 million € by the means of taxes and social contributions.
EIB also presented the “Skills and jobs – investing for youth” programme, which created 26.000 jobs for young people from 2013 to 2014. They assured that EIB requires financial intermediaries commit to comply with national and EU labour regulations, including minimum wage where it exists. They also acknowledged that quality of internships is an area that deserves more dialogue and attention. Maybe a possibility for cooperation with our member the Youth Forum?
These are just examples of where we could cooperate more to mutually benefit from our expertise. Let’s contiune working together!