Anna Kucinska
25 March 2014

Micro funds for the social economy are expanding in Sweden

Regional Micro Funds are now being launched across Sweden to provide a new kind of financial infrastructure designed specifically to support and develop enterprises and activities in the social economy and local development. These funds will provide services tailored to the needs of social enterprises, compared to commercial banks or the state business development enterprise ALMI which does not have the required specialist knowledge of entrepreneurship in the social economy.
The Regional Micro Funds will provide guarantees/security for bank loans when mortgaging one’s own property is not deemed adequate as security. They will also provide soft loans and contribute equity – that is, venture capital based on part ownership, or capital infusions from non-members to co-operatives. Other problems addressed by the micro funds are collateral for bank loans and leases where property owners demand guarantees for rent - for example, a newly started enterprise which does not have any assets, the personal guarantees provided are not adequate or persons on the board are in debt, etc.
Work with the Regional Micro Funds is in full swing and will be concluded by summer. So far, three Regional Micro Funds have been established: in Västra Götaland, the fund is called Mikrofonden Väst ( ), Mikrofonden Z has started in Jämtland, and in Stockholm the fund is called Mikrofonden Öst.   In Skåne, Halland, Kalmar County, Örebro County, Kronoberg and Dalarna as well as in a number of other counties there are ongoing talks to start Regional Micro Funds. The Swedish Village Action Movement and Coompanion along with regional social economy platforms are the main initiators. But smaller banks, long-established cooperatives and public bodies are also interested. Mikrofonden Väst, which has been operating since 2006, is the model being used for other regional micro funds and the foundation for the new financial infrastructure.
The capital of Mikrofonden Väst worth SEK 1.4 million has come mainly from members within long-established cooperatives, banks, and social economy enterprises. The Regional Micro Funds are open to receiving capital in the form of capital infusions from non-members, member capital infusions, and donations/gifts from private individuals, business and industry, and the public sector. There is also a strong wish for the EU’s Structural Funds to be opened up for capital and operating grants for social economy enterprises under similar conditions to ALMI Invest and its regional funds, where half of the total venture capital comes from the EU’s Structural Funds.
The project has been financed by the European Agricultural Fund for Rural Development (EAFRD) and is being run by the organisation Hela Sverige ska leva (the Swedish Village Action Movement) in co-operation with the National Micro Fund for the social economy and local development. The National Micro Fund is owned by the Swedish Village Action Movement, Coompanion, Ekobanken and JAK-banken and is the hub for the new financial infrastructure of Regional Micro Funds that the project is aiming to achieve.
For more information on these micro funds please visit: