“Start-ups and new businesses begin with so much hope, excitement and promise, but the search for c capital is often challenging and stressful, whether you’re starting a business from scratches, or you are trying to find resources to push your start-up forward.”
Hijazi Natsheh, Leaders Organization (Palestine)
They are “non-bankable people”, they are young and offer no guarantees: they could hardly receive any monetary support if they knocked at a financial agency door. But now their business ideas could find a way to become a reality. It’s called MEDSt@rts, it’s an ENI CBC project, and it’s giving a chance to young entrepreneurs to start a professional life.
In the Mediterranean region, access to micro-finance for start-ups and self-employment is quite difficult: many studies have raised this issue, which is hitting entrepreneurship hard, particularly in a moment of crisis like the ongoing one. This challenge can be addressed through a multi-institutional and multi-stakeholder approach at basin level, and the ENI CBC Mediterranean Sea Basin Programme represents a unique framework to do just so. That is how the MEDSt@rts project came to life: with eight partners working in five countries, the initiative intends to help young people with promising business ideas to overcome the traditional credit constraints and to start or scale up their enterprise. “People expected to benefit from this project are mainly young individuals who are considered high risk business, or who have businesses that have been informally established. The project aims to lift them out from the shadow economy and the black market”, says Maria Giovanna Fara, Foundation of Sardinia (Italy). MEDSt@rts aims at designing an appropriate ecosystem to help self-employed and small business owners: at the heart of the project, there is a will to create a network of institutions able to define a common strategy and to simplify access to finance for SMEs. The final goal is the support to economic growth at Mediterranean level in an impactful and sustainable way.
Initially, the project targeted 18–35 year-old people, covering basically green and blue economy, tourism, innovation, and technology sectors. But the COVID-19 emergency pushed project partners to enlarge the target to 18-40 years of age, which is supposed to be the age group most impacted by the economic crisis. The sectoral scope of the project was also reviewed and broadened, to include support in the health, logistics, digitalisation, agri-food, eco-design, craftsmanship, cultural heritage and tourism sectors. Additional intervention areas have been identified in the personal care services, the education, the green and social entreprises, as well as sectors dealing with the “isolation economy”, such as remote education, telemedicine, online services. The project is now in its full implementation phase, and many actions have been launched. As a first step, there was a need to map the main stakeholders, so a list of 128 organizations currently operating in microfinance was created: they are private companies, incubators, business accelerators, NGOs, nonprofit, and governmental organisations, microfinance institutions. This study is also a crucial preparatory action to support the design of the Mediterranean network of microfinance.
Then the selection of aspiring entrepreneurs with innovative business ideas started, 25 candidates in each country: Italy, Greece, Tunisia, Lebanon and Palestine. The potential applicants are unemployed young people and companies, and they are involved in a full process including training, financial advice, and financial subsidy up to €10.000.
As a third component of the project, each partner is organising a series of meetings with local actors to constitute a cross-border network for microfinance. “Networking is at the heart of MEDSt@rts project – says Hijazi Natsheh – The cross-border network for microfinance will help to maintain a permanent dialogue on microfinancing issues, to foster cooperation, learning and best practices exchange. In Palestine the network is in its first stage of creation and all the actors are active and enthusiastic.”
The dialogue and the collaboration among different partners and countries are key to the activities: every partner is bringing a new viewpoint to the project and it’s helping to shape the cross-border perspective. “Given the security and political constraints of our territory – continues Natsheh – we do not always have the chance to access international expertise in Palestine. Hence, the most important achievement for the Palestinian beneficiaries is the opportunity to collaborate and exchange with regional actors, mentors, and entrepreneurs, enlarging their knowledge and developing their tools of access to microfinance.”
In the post-2020 phase, supporting businesses will be crucial. The partners consider that there is still a lot to learn, and that cross-border cooperation remains the best framework to continue collaboration in the microfinancing of start-ups.