The use of ESF Funds to provide microloans in order to support individuals with difficulties in accessing traditional credit channels to start up a business
Since 2009, the Region of Sardinia has used a revolving microcredit fund, financed by the ESF (European Social Fund), to support individuals with difficulty to access traditional credit channels and who want to start up a business or intend to invest in an existing initiative. On the one hand, the ESF Microcredit fund was set up in to reduce the gap between supply and demand for access to finance and micro finance in Sardinia, while on the other hand, the project supports people that do not have the requirements to obtain funding from banks. The Fund has the following characteristics: i) microloans of EUR 5,000-25,000 transferred to final beneficiaries through a unique solution; ii) reimbursable at zero percent interest and without guarantees; iii) paid back in monthly installments (no interest, except for delays); iv) payback period: 5 years with 6 or 12 month grace period. Microloans are disbursed directly by the regionally owned financial institution SFIRS (Societá Finanziaria Regione Sardegna SpA), which is in charge of the investment and planning strategy, the selection of beneficiaries through public calls for projects, the management of the portfolio, the monitoring and control of funding transferred to beneficiaries and informing the ESF Managing Authority on the implementation progress. Thanks to the success of the program, it has been renewed for 2014-2020. In the new period, microloans have the option to be complemented with non-financial services.

Resources needed

The total founding capital was EUR 78.5 Million, which supported some 3,700 projects (six different call for projects were published from 2010 to 2016); the revolving funds servicing the final beneficiaries grew to EUR 89 Million.

Evidence of success

As of January 2017, up to 40% of the budget granted as loans was paid back. According to an evaluation study published in 2015, with respect to the second call for projects, only 3% of the microloans granted were in default. This is an encouraging result. While credit to enterprises, particularly microenterprises, is continually decreasing, the Fund demonstrates resilience: since the first call for projects, the experience of funded enterprises has been consistently positive.

Difficulties encountered

Following the review of the program, Imprinting was introduced as the provision of non-financial services combined with a micro-loan improves the repayment capacity and overall performance of the microcredit fund.

Potential for learning or transfer

The possibility to use ESF Funding for microloans at favorable conditions to support individuals with difficulty to access traditional credit channels, a start-up business complemented with an integrated system of services.
Experience gained in the management of the Microcredit ESF Fund can facilitate preparation of programmatic documents and ensure a model for access to information, support in the strategic review in the use of resources and certification of expenditure. The investment and planning strategy, as well as the rules for managing financial operations (implementation control, eligibility for expenditures, resources returned to the operation from investments undertaken by funds and rules for payment, treasury guide lines) have been established in the Funding Agreements undersigned by the Region and SFIRS.

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Main institution
Sardinia region
Sardegna, Italy (Italia)
Start Date
December 2009
End Date


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