Financial Blending Facilities for Cities, Migrants and Refugees

Financial Instruments represent a powerful tool for providing financial support as a way of reaching various policy objectives; and the blending of the financial instruments with grants enhances the outreach of the intervention.

At the city level, there is an urgent need to invest in different forms of social infrastructure in order to address longer-term integration challenges. At the same time, the necessary measures often do not generate revenue, and there is a lack of incentives or delivery mechanisms for financial institutions to deliver loans and grant funding for inclusion measures, be it linked to infrastructure or to employment.

Migrants and refugees often encounter problems accessing banking loans for a variety of reasons such as difficulty in creating professional networks, lack of familiarity with administrative and legal requirements to start a business in the host country, and difficulties securing funding - notably linked to a lack of credit history or secure legal status. Microcredits can play an important role in giving migrant entrepreneurs access to finance, helping them develop their businesses.

The Partnership on the Inclusion of Migrants and Refugees wants to tackle these issues by fostering the blending of EU grants (e.g. from the Asylum, Migration and Integration Fund (AMIF) or the European Social Fund (ESF)) with loans, making funding more directly available to cities to implement investments for migrant and refugee inclusion and by making microfinance more available to migrants and refugees.

Regarding financial blending for cities, the Partnership carried out a market testing exercise in 2018 in order to understand the appetite for an Inclusion Blending Facility as a means of addressing cities' financing challenges when it comes to infrastructure investment for migrants and refugees1. The outcomes of this study provide an array of qualitative and quantitative analyses. This evidence contributes to the ongoing discussions on the legislative package on the next programming period (2021-2027) which will set the general conditions for funding (including allowing an inclusion blending facility for cities) after 2020.

On microfinance, several cities (Amsterdam, Athens, Barcelona, Berlin, and Helsinki) are planning dedicated workshops. These workshops will allow local authorities to discuss concrete measures supporting microfinance with partners, financial intermediaries (e.g. banks, microfinancing institutes), stakeholders and migrants.

The Leader of this Action is the European Investment Bank (EIB) Group, which consists of the EIB and the European Investment Fund (EIF).

More details on this Action can be found in the Action Plan (Action 2 and 3). To stay up to date, please consult the Partnership website regularly and follow the Urban Agenda for the EU on Twitter @EUUrbanAgenda. 

The Partnership has also produced a short video on this Action:

1 This exercise was supported by URBIS, an advisory initiative of the EC and EIB in support of urban authorities.