Access to finance and facilities provision
Besides knowledge and competences, entrepreneurs often lack finances to start the business or expand it. In the start-up phase, even if migrant entrepreneurs have a very good business idea and the skills to put it in practice, the initial investment is often not affordable for them.
Investing in the beginning is fundamental to enter in more profitable markets with possibilities of growth. However, migrant entrepreneurs tend to enter in lower-profitable markets due to their lack of finances. Therefore, financial support should be provided, too. The support provided can be threefold:
· Direct financial support through loans and grants. Migrant entrepreneurs can be supported financially with microcredit instruments, zero- or low-interest small loans, equity investments, and grants. Another form of financial support is the provision of guarantees and counter-guarantees to financial intermediaries to foster provision of credit to migrant entrepreneurs that face difficulties in accessing the conventional credit market.
· Support in the process of applying for funding, loans and grants provided by other institutions (e.g., banks). Support can also be provided to apply for funding provided by other institutions. Migrant entrepreneurs can be supported in writing the application (e.g., the business plan) and to accomplish all the requirements.
· Provision of facilities to start the business for free or at a low cost. Providing migrant entrepreneurs with a place to work as self-employed or to start a business is critical to reduce the costs of conducting the business. This is particularly effective in the start-up phase, to allow migrants to have more financial capital available for the initial investment required.
Let’s take a look at some examples with some good practices of some European Countries:
In Sweden, the Ester Foundation supports unemployed migrant women entering the labour market and starting small businesses. With the cooperation of Swedbank and Johaniterhjälpen, a charity organisation, the foundation has set up its own microcredit system through which participants can access loans at attractive rates and reduced risks. Migrant women whose business plans have been approved by the Swedish Employment Agency can receive additional financial start-up support from the Agency and are entitled to further loans from Swedbank.
The Spanish Ministry of Employment supports an NGO-run pilot project entitled Support to entrepreneurship for migrants. The project targets long-term unemployed migrant women who have no access to regular loans. The programme participants receive training on entrepreneurship and management and loans (in cooperation with a local bank).
Kompass – Centre for Entrepreneurship offers comprehensive support to entrepreneurs in Germany, including migrant entrepreneurs. When it comes to material support, Kompass provides both direct funding and cooperates with banks and other private and public actors to increase the financial support provided to the entrepreneurs. Furthermore, Kompass offer free/cheap access to working spaces. For example, it offers four-month free facilities.
The European Commission, through the Guarantee Financial Instrument of the EaSI (EU Programme for Employment and Social Innovation), aims at increasing the availability of, and access to, finance for vulnerable groups (including migrants) to start and develop their business.
Guarantees and counter-guarantees are offered to financial intermediaries, thereby providing them with a partial credit risk protection for newly originated loans to eligible beneficiaries
Although it does not provide finances directly, FAIE (Facilitate and Accompany the Economic Initiatives) by NGO Asmoune provides support in the application process in France. FAIE targets North-African migrants through individual support and networking activities. Participants are informed about available financing opportunities and they receive support throughout the entire application process, e.g. in writing the cover letter and the business plan, and in drafting the budget.
Other already-mentioned initiatives provide either direct financial support to migrant entrepreneurs (e.g., CNA World), or information on financial opportunities and support in the application process (e.g., Barcelona Activa). Finally, another example of provision of facilities is the Swedish cooperative Macken, which offers offices at a favorable price to migrants.
TIPS:
- Do research about the business needs of the hosting country
- Draft a business plan of your business idea
- Search on the web for active local programs to finance your idea
- Contact local agencies, banks and/or NGOs to ask for support on your business plan