The Trust-based Partnership Model provides support for entrepreneurs to sustain and grow their businesses.
Scaling up existing support mechanisms on the one hand and being able to act locally to strengthen the local economy asks for efficient partnership models combining financial and non-financial support as well as sharing the workload and risk involved. The Trust-based Partnership Model has been developed to provide a comprehensive support mechanism for small businesses that are in a transition phase from sustaining to growing their business.

The trust-based partnership model rests on four pillars of distributed services, which mutually reinforce each other:
- The bank, which disburses the loans. It takes over all tasks, which can only be handled by banks according to regulations. Its role is similar to that of a ‘credit factory’. This creates a highly standardized workflow permitting high numbers of loans to be handed out;
- A guarantee fund, which bundles all risk-sharing arrangements. It tries to have public, private and not-for profit investors and to provide risk guarantee up to 100% to the bank;
- non-financial institutions, which are affiliated to organisations that are regionally anchored or trusted by the target group. They assume the role of the operator by providing complete client support starting from the client acquisition and supporting clients during loan repayment,
- A Quality Risk and Network Manager, which assures the quality of the partners and of the whole system.

Resources needed

The Trust-based Partnership model needs investments into the guarantee fund, grants to cover non-financial support. The investment into the guarantee fund determines the size of the program. ERDF and ESF can be used to co-finance such a program.

Evidence of success

In Germany over 60 non-financial institutions have participated in the program since 2004 and some 20.000 loans with a volume of 124 million Euros were disbursed. The Trust-based Partnership Model was used to serve different target groups such as start-ups, female and migrant entrepreneurs, small businesses in disadvantaged urban districts.

Difficulties encountered

The implementation of such a support instrument requires a long-term. Policy changes and short-term contracts (3-5 years) could threaten the whole system. Dominance of one partner can hinder further development and may lead to a lower quality of services provided.

Potential for learning or transfer

The Trust-based Partnership Model was developed with the German market in mind. However, its maturity and success in reaching the intended target groups and objectives made it interesting for other countries as well. Currently, the Trust-based Partnership Model is implemented in Greece through the SEE-GR project to provide financial and non-financial services to social enterprises as well as underserved communities such as young people and migrants/refugees. The Trust-based Partnership Model offers a scalable solution to support specific target groups on their way from self-employment towards sustainable business creation.
Main institution
KIZ SINNOVA Gesellschaft für soziale Innovationen gGmbH
Darmstadt, Germany (Deutschland)
Start Date
June 2014
End Date


Please login to contact the author.