Roma Entrepreneurship Development Initiative
Theory of Change
Challenge and Context
Roma are the largest minority in Europe, and at the same time, the most socially and economically excluded. Contrary to popular belief, the majority of European Roma are settled, although mostly living under extreme hardship. Rhetoric and enflamed hostility mean that Roma are stigmatized, persecuted, face intolerable discrimination, and often lack access to vital services, including financial services. Roma entrepreneurs have a distrust for traditional institutions and often lack the know-how and financial literacy to apply for financing. Moreover, they frequently do not have support needed to scale their businesses and create sustainable jobs within their communities.
REDI provides loans to microfinance institutions of between $205,000 (€200,000) and $1 million (€1 million) for on-lending to entrepreneurs in Roma communities. Microfinance institutions are expected to provide average loans of up to $25,000 (€25,000), at competitive or below-market rates.
Lending will initially focus on a network of local microfinance institutions in Bulgaria, North Macedonia, Romania, and Serbia that have partnered over the past six years with REDI’s non-profit sponsor, the Roma Entrepreneurship Development Initiative.
REDI will also provide technical assistance and advice to Roma entrepreneurs, such as assistance with preparing loan applications and crafting and delivering business plans. It will also support the micro-finance lenders, including funding Roma interns, bias training for non-Roma staff, and outreach efforts.
- Enabled access to finance and increased financial health for hundreds of Roma entrepreneurs
- Approximately 1,000 jobs created in Roma communities
- Evidence collected on life-changing impact and commercial viability of financing to Roma entrepreneurs
- Additional funding catalyzed for Roma entrepreneurship and other programs benefitting Roma communities
REDI was established in 2016 with support from the Open Society Foundations. Its mission is to economically empower Roma communities by promoting existing entrepreneurs and their businesses using business development services, coaching, and access to finance. The fund, REDI Economic Development SA Luxembourg, is the latest evolution in a multi-year drive backed by the Open Society Foundations to support Roma economic development.
Open Society, through SEDF, is investing €1 million in the fund, with the Council of Europe Development Bank providing $3 million (€3 million), and an additional $1 million (€1 million) coming from REDI. This fund size is intended to pilot the concept, with an expectation to grow over time.