Microcredit program for the unemployed extended until 2030

As part of the program, which has been running since 2011, loans of up to 15,000 euros are granted. The term is five years, of which six months are grace-free. The interest rate is based on the 3-month Euribor plus a margin of three percent as a fixed interest rate. Collateral is not required as the guarantee from the European Investment Fund (EIF) protects the risk and thus facilitates access for founders. According to Gerda Holzinger-Burgstaller, CEO of Erste Bank, the default rate for repayments is consistently below 20 percent, currently at twelve percent.

42 percent of the 1,120 microloans with a volume of 13.8 million euros were granted to women. The business ideas range from traditional industries such as taxi, mechanics, physiotherapy and cosmetics to new ones such as app development, e-mobility or online trading. This spectrum is supplemented by services in consulting, AI, online tools, marketing, web design and furniture retail.

Increasing demand

While demand was still at 70 to 80 inquiries per year until 2019, since the pandemic there has been an average of 150. “In view of the challenging economic environment and the situation on the labor market, I assume that the importance of the program will continue to increase,” said Holzinger-Burgstaller.

To ensure that applicants from all over Austria can take part, hearings are offered both in selected regional savings banks and online. After the loan has been granted, the business consultant ASEP supports the founders for up to a year.