Brussels, 14/07/2015 (Agence Europe) - On Tuesday 14 July, the European Court of Auditors (ECA) published a report in which it criticises EU funding from the European Social Fund (ESF) given to micro-enterprises.
Written on the basis of 27 assessed projects, the report states that this financial assistance is granted on the basis of incomplete and unreliable information. Furthermore, the ECA auditors regret that neither the European Commission nor the member states had access to comparative data on the national administrative costs - nor did they have enough information available on the different financing mechanisms.
The ECA therefore makes four recommendations: (1) the member states should perform needs assessments when designing funding instruments and operational programmes which include EU financial support to micro-enterprises; (2) the European Commission should make the use of ESF financial instruments conditional on robust risk management systems; (3) the financing should primarily target the unemployed and vulnerable; (4) the Commission should assess the implementation costs of financing (guarantees, grants and loans) in order to establish their actual levels and identify good practices on how the financing can be disbursed at a reasonable cost.
“Creation of micro-businesses and start-ups could be an effective tool to reduce exclusion and unemployment”, says Iliana Ivanova, the ECA member responsible for the report. She goes on to say that the report focused on the real effectiveness of European funding in this context, with a view to improving it.
Microfinance is usually for amounts below €25,000 (and often of less than €10,000). It is estimated to be above €12 billion. (Pascal Hansens)