Erste Bank launches “Step by Step“ support programme aimed at start-ups, social enterprises and civil society

• Educational, financial and mentoring support to start-ups and social enterprises in Serbia to be launched on 5 December

• Over the next five years EUR 4.7 million will be placed for around 800 Serbian start-ups and social enterprises; a guarantee agreement with EIF signed

• In 2017 and 2018 comprehensive support to civil society organisations and persons at risk of poverty to be introduced

• The CEE programme is aimed: to help create 5,000 new jobs in CEE, provide financing for 500 social enterprises and improve financial stability for 25,000 people at risk of poverty by 2019

The European Investment Fund (EIF) and Erste Bank Serbia have signed a guarantee agreement today aimed at supporting micro-enterprises in Serbia under the EU Programme for Employment and Social Innovation (EaSI).The agreement will cover a loan portfolio of EUR 4.7 million for around 850 Serbian micro-borrowers, who will be able to benefit from loans on attractive terms, without having to provide additional guarantees. Applications for micro-loans will be possible as of 5 December this year.

This is the first step in the implementation of the “Step by Step“ Social Banking Programme in Serbia, launched by the Erste Group in Central and Eastern Europe (CEE) and Austria aiming to support traditionally unbanked groups: start-ups, first-time entrepreneurs, social enterprises, civil society organisations and individuals at risk of poverty.

In its first phase in Serbia, the “Step by Step“ programme will support companies with a business history under 24 months in strengthening their businesses, social enterprises irrespective of their business operations’ duration, same as new business ideas characterised by sustainability and market potential, offering them access to basic financial products, sound money advice and ongoing busines mentoring. Services aimed at civil society organisations will be developed next year under this programme, while those focusing on individuals at risk of poverty are planned for 2018.

Speaking at the signature event in Belgrade, EIF Deputy Chief Executive, Roger Havenith, said: “I am delighted to see EIF collaborating so closely with Erste Bank Serbia to expand its activity under EaSI in Serbia. EIF is strongly committed to supporting disadvantaged social groups experiencing financial and social exclusion. Thanks to today’s agreement, I am confident that Erste Bank Serbia will be able to reach out to those Serbian micro-entrepreneurs whose risk profile would otherwise prevent them from accessing traditional bank financing.”

Commenting on the transaction, Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: “The European Commission is fully committed to promoting inclusive entrepreneurship in the fight against social and financial exclusion. I therefore warmly welcome today’s agreement with Erste Bank, which marks the first of its kind in Serbia under the EaSI programme. This agreement worth EUR 4.7 million will support some 850 micro-entrepreneurs, particularly the most vulnerable ones, in starting up and developing their business. This will allow them to create jobs and inclusive growth at the grass-roots level.”

Slavko Carić, CEO of Erste Bank Serbia, stated: “The EU guarantee enables Erste Bank Serbia to fulfil its strategy of supporting the small enterprises, start-ups and social enterprises that will be strong drivers of future changes and the development of our country. The cooperation we have launched with the European Investment Fund will enable us to provide support to small businesses and entrepreneurs that have been operative less than two years and for whom the traditional forms of financing are generally inaccessible. Besides financing, we will also be providing them with education and mentoring support on their way to success. Erste Bank Serbia, together with its partners, contributes to building better community and well-being of all society.”

The programme will be rolled out to all main Erste Group markets by 2019. The programme aims to help create 5,000 new jobs, provide financing to 500 social organisations and improve financial stability for 25,000 previously low-income people.

“At Erste, we’re focused on being a healthy and profitable business, but also believe in empowering people in their financial lives and helping to spread prosperity in our region. These principles have been at the core of what our bank has sought to do since it was founded nearly two centuries ago. With our Social Banking programme, we build on what we’ve already accomplished in this field to expand our offering of practical solutions that will make a direct impact in the lives of those people in our region who have been left behind”, said Peter Surek, head of Social Banking Development at Erste Group.

In scope of the “Step by Step“ programme, Erste Bank will be cooperating with the following organisations: Smart Kolektiv, Eneca, Development Business Center Kragujevac and Business Innovation Programmes on issues like education, preliminary selection and mentoring support to start-ups and social enterprises.

Social banking addresses acute needs, offers sustainable support

Over the past two decades, the countries in Central and Eastern Europe have made very significant progress in their convergence with Western Europe. However, studies¹ suggest that some 16 million persons in the countries in which Erste Group is present (Austria, the Czech Republic, Slovakia, Romania, Hungary, Croatia and Serbia) are at risk of poverty or social exclusion; this corresponds to around 30% of the adult population² in the region. In Serbia there are approximately 350 000 unemployed, around 180 000 employed citizens and almost 160 000 pensioners³ at risk of poverty (with income below EUR 121). Additionally, in our country 30 000 companies have no access to financing⁴, with the youth unemployment rate in the first quarter of this year amounting to 44%.⁵

The “Step by Step” programme will be rolled out through Erste Group’s network of local banks and in partnership with other organisations and NGOs. It also builds on individual programmes that the Group’s subsidiaries in the CEE region have already launched and works together with existing local Social Banking projects, such as Austria’s Zweite Sparkasse (founded 2006) and Romania’s good.bee Credit (2009), with the target of creating a unique infrastructure for financial inclusion across the region. As part of the “Step by Step” programme, Erste Group’s banks will also cooperate with the ERSTE Foundation and local partners to provide clients with appropriate financial literacy, money advice, business training, workshops and mentoring.

About EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

More information on EU microfinance and social entrepreneurship support is available under:

EaSI Programme

EU support to social entrepreneurship

About the Programme for Employment and Social Innovation

The European Commission’s Programme for Employment and Social Innovation (EaSI) aims at supporting the EU’s objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The EaSI guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund.

It provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, through notably loans of up to EUR 25 000. In addition, for the first time, the European Commission is helping social enterprises through investments of up to EUR 500 000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI guarantee, which enables financial intermediaries to reach out to micro-entrepreneurs and social enterprises that would not have been able to gain finance otherwise due to risk considerations.

Furthermore, the European Commission is reinforcing the social dimension of the European Fund for Strategic Investments (EFSI) for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.