NewsEmpowering tomorrow’s entrepreneurs!
Brussels, 17th October. The 20th October marks the annual European Microfinance Day. For this 5th edition, scores of events are once more being organised across Europe throughout the month of October. From Dublin to Athens and from Cadiz to Warsaw, microfinance institutions are joining forces to celebrate the contribution of the microfinance sector to the global fight against financial and social exclusion. Acting as a unifying thread between all these initiatives at EU level, the European Microfinance Network (EMN) and the Microfinance Centre (MFC) also organised an event on 17th October in Brussels.
For MFC Executive Director Grzegorz Galusek, “The European Microfinance Day is a great opportunity for the industry to highlight the tremendous social impact of microfinance, one of the consistent forces pushing for social inclusion. In a world where finance is seen as leading to increasing inequalities, microfinance works the opposite way, generating opportunities for people to manifest their entrepreneurial energy for the overall benefit of the community”.
With nearly one million active borrowers and an outstanding portfolio of €3.2 billion, microfinance is indeed changing the rules of entrepreneurship in Europe. By giving access to credit to those excluded from conventional banking, while providing sound personalised business advice, it truly empowers tomorrow’s entrepreneurs and addresses the difficulty many entrepreneurs have with accessing credit, as underlined by the OECD’s reference publication The Missing Entrepreneurs.
Yet it is estimated that another million people belong to the ‘financially underserved’ category, people who, because of how young or old they are, because they live in a remote place or because they are from outside Europe, cannot get a loan and are therefore effectively barred from entrepreneurship. “Going the extra mile and further untapping the potential of microfinance will take a lot of coordination and communal effort”, says EMN President Elwin Groenevelt, “but it’s a challenge that must be tackled, and especially at European level. Member States must improve their regulatory frameworks at national level, converging towards European best practices, and it starts with the adoption of a correct definition for microfinance”.
In a relatively young sector where 58% of microfinance institutions (MFIs) were set up in the 2000s, the European experience over the last few decades has demonstrated their long-term economic viability. Internationally recognised as a powerful weapon against exclusion and unemployment, microfinance is increasingly integrated in public policies, and the subsidies thus invested in the sector more than pay for themselves. While local contexts differ from one region to another, studies show that €1 invested in the microfinance sector may return up to €4 to the public balance. This is mostly due to the relief it provides to the welfare system, the secondary jobs that are created, and the taxable revenues that the entrepreneurial activities generate. Most importantly, it does so while positively contributing to the Sustainable Development Goals in terms of decent work, reduced inequalities, and even quality education through the myriad of trainings offered by microfinance providers via their non-financial services.
At European level, microfinance providers are supported by an active collaboration between EMN and MFC. The EU actively supports the development of the sector, most notably through the Employment and Social Innovation (EaSI) programme, under which the European Commission offers a guarantee mechanism (with a €300 million budget for the 2014-2020 period) to improve access to finance for social- and micro-enterprises and vulnerable groups. The EaSI programme also features a €16 million subsidies scheme for the same period, aiming to reinforce the institutional capacity of microcredit and social financing providers.
With a new European Parliament recently elected, and as a new European Commission is being formed, the timing could not be better to highlight the social impact and economic efficiency of microfinance and to remind policymakers that concrete solutions exist to lift the obstacles hampering its development.
About the European Microfinance Day (EMD)
Launched in 2015 as a tool to highlight the impact of the microfinance sector in Europe from a social and an economic perspective, the main objectives of the EMD are:
• To raise awareness among European citizens on the existence of microfinance and on its value to fight unemployment and social exclusion.
• To draw the attention of European media on how microfinance supports the unemployed and European citizens excluded from the traditional financial sector.
• To exchange experiences within the European microfinance sector by giving visibility to the work of EMN & MFC members.
• To allow members to draw the spotlight on their achievements and missions at local level
About the European Microfinance Network (EMN)
The European Microfinance Network’s mission is to build up universal and open access to appropriate financial and complementary support services suited to society’s needs at affordable prices allowing people to deploy their talents in order to create wealth and value while having a positive social impact. EMN empowers its members to become acknowledged actors and partners in the financial sector that reach out to a large number of enterprising people who, in turn, create jobs and contribute to sustainable growth. EMN primarily focuses its activities in the European Union and EFTA/EEA Member States.
About the Microfinance Centre (MFC)
The Microfinance Centre’s mission is to contribute to poverty reduction and the development of human potential by promoting a socially-oriented and sustainable microfinance sector that provides adequate financial and non-financial services to a large number of poor families and micro-entrepreneurs. MFC primarily focuses its activities in Central and Eastern Europe and in the Commonwealth of Independent States.
EMN: Vianney Stoll, email@example.com
MFC: Aleksandra Karabon, firstname.lastname@example.org