Allowing nearly 1,000 social enterprises to borrow up to 1 million euros by the end of 2022, this is the bet of the European Investment Fund (EIF), which signed a guarantee agreement last May. with the Nave, a long-time supporter of impact entrepreneurs.
The principle is simple: the Nave benefits from a € 100 million envelope of loans guaranteed by the EIF, to be granted to companies of all sizes engaged in ecological and social transition.
Support social entrepreneurs
This initiative is not a first for the FEI and the Nef, which signed their first agreement in 2016. It operates within the framework of the European guarantee fund, intended to help companies cope with the Covid-19 crisis. La Nef benefits from it in France, but the program concerns other financial organizations that are members of the European Federation of Ethical and Alternative Banks (FEBEA).
“We have supplemented an already existing mechanism, giving more flexibility to our partners with more eligible companies », Underlines Alain Godard, Director General of the FEI. Micro-enterprises, sole proprietorships, VSEs, SMEs and mid-cap companies can benefit from this new envelope, knowing that an agreement signed in 2018 is still in progress, and aims to guarantee 160 million euros in loans over five years.
“The guarantee is free for the customer,” specifies Ivan Chaleil, member of the Management Board of La Nef. This system is a strong lever for financing: it has enabled us to double our outstanding new loans in four years. ”
It also makes it possible to meet the specific needs of social entrepreneurs, who sometimes find it difficult to finance themselves. “Half of the projects financed by the Nave are business creations,” recalls Ivan Chaleil. This is where the greatest financing needs lie, especially when the target markets are not considered standard, like organic farming a few years ago. ”
Building a new economy
For Alain Godard, this type of initiative is nevertheless not sufficient to develop the ecosystem of ethical and social businesses. The health crisis has indeed put many companies into debt while societal and climatic pressures require massive investments in ecological transition. “The real challenge will be to invest to build this new economy, while the Covid has had a significant cost, for states and businesses alike. “
To do this, the EIF is also positioning itself as a venture capital player. The institution has financed 35 social impact funds so far and continues its efforts in France as in the rest of Europe. “Social enterprises have more difficulty accessing financing,” concludes Alain Godard. Our role as a public body is to respond to these market failures. ”
The crowdfunding alternative
Many social entrepreneurs are also turning to crowdfunding to finance their projects. La Nef has developed its donation platform, Zest, which should exceed one million euros collected in 2021. It generally allows project leaders to test their market or product before taking out a bank loan.
Other platforms have taken over from social enterprises, such as Lita, which notably financed Comptoir de Campagne, whose mission is to revitalize villages, or the Chênelet property, which renovates and builds ecological habitats intended for people with low income. income, elderly or disabled.