Regulation (EU) No 1296/2013 of the European Parliament and of the CouncilDangos y teitl llawn

CHAPTER III U.K. Microfinance and Social Entrepreneurship Axis

[F1 Article 25 U.K. Thematic sections and financing

The Microfinance and Social Entrepreneurship axis shall support actions in the thematic sections referred to in points (a) and (b). Over the entire period of the Programme, the indicative breakdown of the overall allocation for the Microfinance and Social Entrepreneurship axis between the different thematic sections shall respect the following minimum percentages:

(a)

microfinance for vulnerable groups and micro-enterprises: 35 %;

(b)

social entrepreneurship: 35 %.

Any remainder shall be allocated to the thematic sections referred to in point (a) or (b) of the first paragraph, or to a combination of them.]

Textual Amendments

F1 Substituted by Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012.

Article 26 U.K. Specific objectives

In addition to the general objectives set out in Article 4, the specific objectives of the Microfinance and Social Entrepreneurship axis shall be to:

(a)

increase access to, and the availability of, microfinance for:

(i)

vulnerable persons who have lost or are at risk of losing their job, or have difficulty in entering or re-entering the labour market, or are at risk of social exclusion, or are socially excluded, and are in a disadvantaged position with regard to access to the conventional credit market and who wish to start up or develop their own micro-enterprises;

(ii)

micro-enterprises in both start-up and development phase, especially micro-enterprises which employ persons as referred to in point (i);

(b)

build up the institutional capacity of microcredit providers;

(c)

support the development of the social investment market and facilitate access to finance for social enterprises by making equity, quasi-equity, loan instruments and grants of up to EUR 500 000 available to social enterprises with either an annual turnover not exceeding EUR 30 million, or an annual balance sheet total not exceeding EUR 30 million which are not themselves a collective investment undertaking.

In order to ensure complementarity, the Commission and the Member States shall, in their respective areas of competence, closely coordinate these actions with those undertaken in the framework of cohesion policy and national policies.

Article 27 U.K. Types of actions

Support to microfinance and social enterprises, including for institutional capacity building, in particular through the financial instruments provided for under Title VIII of Part one of the Financial Regulation, and grants may be provided under the Microfinance and Social Enterprises axis.

Article 28 U.K. Participation

1. Participation under the Microfinance and Social Entrepreneurship axis shall be open to public and private bodies established at national, regional or local level in the countries referred to in Article 18(1) and providing in those countries:

(a) microfinance for persons and micro-enterprises; and/or

(b) financing for social enterprises.

2. The Commission shall ensure that the axis is accessible, without discrimination, to all public and private bodies in the Member States.

3. In order to reach out to the final beneficiaries and create competitive, viable micro-enterprises, public and private bodies that carry out activities as referred to in point (a) of paragraph 1 shall cooperate closely with organisations, including civil society organisations, representing the interests of the final beneficiaries of microcredit and with organisations, in particular those supported by the ESF, and shall provide mentoring and training programmes for such final beneficiaries. In this context, a sufficient follow-up of beneficiaries shall be ensured both before and after the creation of the micro-enterprise.

4. Public and private bodies that carry out activities as referred to in point (a) of paragraph 1 shall adhere to high standards concerning governance, management and customer protection in line with the principles of the European Code of Good Conduct for Microcredit Provision and shall seek to prevent persons and undertakings from becoming over-indebted, for example, as a result of the granting of loans to them at high interest rates or on terms likely to result in their insolvency.

Article 29 U.K. Financial contribution

Except in the case of joint actions, the financial appropriations allocated to the Microfinance and Social Entrepreneurship axis shall cover the full cost of the actions implemented through financial instruments, including payment obligations towards financial intermediaries, such as losses from guarantees, management fees for the entities managing the Union's contribution and any other eligible costs.

Article 30 U.K. Management

1. In order to implement the instruments and grants referred to in Article 27, the Commission may conclude agreements with the entities listed in Article 139(4) of the Financial Regulation, and in particular with the European Investment Bank and the European Investment Fund. Such agreements shall set out detailed provisions on the implementation of the tasks entrusted to those entities, including provisions specifying the need to ensure additionality and coordination with existing Union and national financial instruments and to apportion the resources in a balanced way among the Member States and the other participating countries. Financial instruments under Title VIII of Part One of the Financial Regulation may be delivered through a dedicated investment vehicle, which may be financed by Programme funds, other investors or by both.

2. The dedicated investment vehicle referred to in paragraph 1 may provide, inter alia, loans, equity capital and risk-sharing instruments for intermediaries or direct financing for social enterprises or both. Equity capital can be provided, inter alia, in the form of open equity participations, dormant holdings, shareholder loans and combinations of different types of equity participations issued to the investors.

3. The conditions, such as interest rates, for micro-credits directly or indirectly supported in the framework of this axis shall reflect the benefit of the support and shall be justifiable with regard to underlying risks and the actual cost of funding related to a credit.

4. In accordance with Article 140(6) of the Financial Regulation, annual repayments generated by one financial instrument shall be assigned to that financial instrument until 1 January 2024, while revenues shall be entered in the general budget of the Union after deduction of management costs and fees. For financial instruments already set up in the multiannual financial framework for the period 2007-2013, annual repayments and revenues generated by operations started in the previous period shall be assigned to the financial instrument in the current period.

5. On the expiry of the agreements concluded with the entities referred to in paragraph 1 or after the termination of the investment period of the specialised investment vehicle, the balance due to the Union shall be paid into the general budget of the Union.

6. The entities referred to in paragraph 1 of this Article and, where relevant, the fund managers shall conclude written agreements with the public and private bodies referred to in Article 28. Such agreements shall lay down the obligations of the public and private providers to use the resources made available under the Microfinance and Social Entrepreneurship axis in accordance with the objectives set out in Article 26 and to provide information for drafting the annual implementation reports provided for in Article 31.

Article 31 U.K. Implementation reports

1. The entities referred to in Article 30(1), and, where relevant, the fund managers, shall send to the Commission annual implementation reports setting out the activities that have been granted support and covering their financial implementation and the allocation and accessibility of funding and investment by sector, geographical area and type of beneficiary. Those reports shall also set out the applications accepted or rejected with regard to each specific objective, the contracts concluded by the public and private bodies concerned, the actions funded and the results, including in terms of their social impact, employment creation and sustainability of the support granted. The Commission shall send those reports to the European Parliament for information purposes.

2. The information provided in those annual implementation reports shall feed into the biennial monitoring reports provided for in Article 12. Such monitoring reports shall include the annual reports provided for in Article 8(2) of Decision No 283/2010/EU, detailed information on communication activities and information on complementarity with other Union instruments, notably the ESF.