Investment & Fund Management
which were often deemed too risky by traditional banks. This situation
Full Credential Description
SOGAMA Credit Associatif faced significant challenges in providing financing to social enterprises in France, particularly for loans below EUR 500,000, which were often deemed too risky by traditional banks. This situation limited the access of social enterprises to necessary funding, hindering their growth and operational capabilities.
To address this issue, the European Investment Fund (EIF) entered into a counter-guarantee agreement with SOGAMA, amounting to EUR 30 million. This initiative, financed by the European Union Programme for Employment and Social Innovation (EaSI) and backed by the Juncker Plan, aimed to enhance the financial conditions for social enterprises by reducing guarantee fees and collateral requirements. The EIF's support allowed SOGAMA to guarantee loans that would otherwise be unavailable to these enterprises, thereby facilitating their access to finance.
As a result of this tailored solution, SOGAMA was able to significantly improve the financial conditions of its guarantees. Each loan benefited from a reduction in the guarantee fee by at least 0.1% per year compared to standard fees. This initiative not only increased the availability of financing for social enterprises but also demonstrated the EU's commitment to fostering a more socially inclusive economy. The partnership marked a decisive step in supporting the social entrepreneurship sector in France, which has seen a notable increase in private employment and recruitment in recent years.