In mid-2018, the European Microfinance Network launched a working group to identify and investigate the remaining gaps and challenges faced by MFIs and social enterprises across the continent, and assess the need for a new instrument with a specific focus on unmet demand and access to funding for the smaller players on the market.

This new instrument, called ImpaktEU, aims to bridge the gap between the needs of public and private investors interested in the microfinance and social enterprise sectors, and the needs of field practitioners in terms of financial and non-financial support and operational know-how to serve the demand of final beneficiaries. In the framework of the future InvestEU programme set-up by the European Commission for the period 2021-2027, ImpaktEU will prioritise maximum social impact on the ground while fostering a strong complementarity with existing European instruments (EC, EIF), as well as other public and private initiatives of the sector.

To further assess the needs and feasibility for ImpaktEU, EMN launched in April 2019 a preliminary study to confirm the market failure by studying the ecosystem and investigate the opinion of a few key stakeholders. This study was carried out between April and June 2019 by an independent consultant supervised by the European Microfinance Network and the ImpaktEU working group, in close coordination with the European Commission and the European Investment Fund. This report presents the outputs of this study.