fi-compass has released a new case study about a financial instrument co-financed by the European Social Fund (ESF) that provides loans and advice to socially-oriented enterprises across Poland. This is a valuable example of how a managing authority, here the Polish Ministry of Infrastructure and Development, and partners have established an instrument to promote sustainable, quality employment, supporting labour mobility and social inclusion, while also combating poverty and discrimination.
The structure of the financial instrument is based on a fund of funds, with five loan funds covering the entire country. By June 2015, the financial intermediaries had helped 288 social economy enterprises, which contributed to the creation of 250 jobs and safeguarded an additional 1000 jobs.
Loans provided through this instrument are offered jointly with business development services, which are also supported by the ESF. Such packaging of ESF assistance helps to facilitate the use of funds. Borrowers receive up to 30 hours of free advice on issues including accountancy, taxes, management of human resources, and promotion. This support has been used extensively, especially by enterprises with insufficient experience of finance. One project example, which you can read more about in the publication, is the social cooperative ‘Our House’ that operates childcare services in Warsaw.
Our new case study contains further details on the design and set up of this ESF financial instrument, as well as noting some of the challenges that were overcome, including the selection of multiple financial intermediaries. Its content is intended to be useful for ESF managing authorities that are interested in using financial instruments for developing or sustaining the social economy and its actors. ESF managing authorities will also be interested in the advice and discussions around such topics that took place last week during the fi-compass conference focused on ‘Financial Instruments under the European Social Fund (ESF) 2014-2020’.