An innovative enterprise to promote

social cohesionLuc Haegemans

microStart: origins

microStart: common thread

What if we were to set up a social

enterprise?

microStart: Belgian branch

microStart: pilot project

• Cooperative company with limited liability and a

social purpose (credit)

• Non-profit organisation (support and

volunteering)

• Initial capital: EUR 1,210,000

• Board: 5 members (2 BNPPF, 2 Adie, 1 EIF)

• 2 branches in Saint-Gilles and Schaerbeek,

Belgium, for 2 years

• Foreseeable expansion in Belgium in 2013

• Goal is to continue the project in the long-term

microStart: member contributions

• contributes 78.5% of the capital,

refinances micro-loans and

mobilises pool of volunteers

• contributes 20.5% of the capital and

guarantees 75% of the loan portfolio

free of charge

• contributes 1% of the capital and 20

years of expertise

microStart: aims

• Provide financing for individuals excluded from

the banking system who wish to set up or

develop an independent economic activity

• Support clients throughout their projects by • Support clients throughout their projects by

providing tools and assistance that is tailored to

their requirements

• Promote changes to the regulations governing

the creation of new businesses in Belgium by

using microStart clients as an example

microStart: target group

• Long-term unemployed, workers with little or

no job security, recipients of social benefits

• Self-employed

• Workers in the informal sector• Workers in the informal sector

• Financial Plan less than EUR 15,000

• Average loan of EUR 4800

� small-scale activities and projects

microStart: operation

• 2 branches: one manager & two advisors

• 1 back office

• Active canvassing of clients, word of mouth,

purchasing advisorspurchasing advisors

• Customer service and responsiveness

• Decision-making criteria focussed more on the

person than the project

• microStart borrows in order to re-loan (BNPPF

line of credit = EUR 1.3 million)

• Interest and commission earned on products

must cover the operational costs

Economic Model

• Capital covers the initial years of losses

• Productivity, efficiency and strict repayment

• Non-profit organisation: public service

promoting integration and volunteering

Initial results

Overall statistics on 30 October 2011:

� 460 entrepreneurs met

�70 projects already financed

�More than 130 partners met�More than 130 partners met

�Various promotional activities within

communities (local festivals, markets, etc.)

� Average micro-loan = EUR 4900

� 90% of entrepreneurs from minority groups

microStart: clients

Julien, market stall seller Catalina, Latin-American

grocery store owner

Regulatory framework in Belgium

• Immediate loss of social income

• Amount of social security contribution

• Lack of public solutions for equity capital

contributioncontribution

• Strict regulations governing the establishment

of self-employed businesses and certain

professions

Thank you for your time !