Case study (Mikromezzaninfonds, Germany)
This case study shows that it is possible to promote social inclusion through mezzanine capital if a funding gap for this type of finance is clearly identified, and financial intermediaries are experienced and well-established in the relevant areas.
Set up in 2013 using funds from the European Social Fund (ESF) and the German European Recovery Programme Special Fund, Mikromezzaninfonds Deutschland, or Mikromezzaninfonds, provides mezzanine capital through silent partnerships. This type of investment is similar to a loan but the investor participates in the profits of the enterprise. Final recipients of Mikromezzaninfonds are mainly small and medium-sized enterprises as well as enterprises led by disadvantaged people – e.g. women, migrants or the unemployed – who are excluded from financial services as they have insufficient equity, or no credit history.
The involvement of 15 regional investment companies (‘Mittelständische Beteiligungsgesellschaften’) with local knowledge and networks, made it possible to reach 1 781 enterprises providing employment for 7 775 people. Due to high demand, the initial funds were increased twice, to more than EUR 83 million. This amount is fully allocated and by December 2015 EUR 74.5 million had been disbursed. Because of the demand and based on the recommendations of an ex-ante assessment, the financial instrument is continuing in the 2014-2020 programming period, providing another EUR 85 million (ESF and national resources) for micro-mezzanine financing.