Microfinance consists mainly of microcredit, typically very small loans (below EUR 25,000) tailored to micro enterprises (91% of all European businesses), and people who want to become self-employed but do not have access to traditional banking services. Throughout Europe, 99% of start-ups are micro or small enterprises and one third of those were launched by people who were unemployed.
The efficient support of the European microfinance sector is an important instrument to develop this young market segment; it is also a way to overcome the effects of the current crisis and is considered a tool which supports employment for both job creation and job sustainability.
We have been involved in the microfinance sector since 2000, providing funding (equity and loans) and guarantees to a broad range of financial intermediaries, from non bank financial institutions close to sustainability to well established microfinance banks. We have developed our know-how in the field by managing specific mandates (including CIP, JEREMIE, JASMINE) and by setting up operations on its own resources.
Compared to the microfinance markets in South Asia, South America or Africa, the European market is less developed, highly heterogeneous and disposes of limited resources. However, the microcredit landscape of Europe is changing, notably in new Member States and some western countries, usually when the regulatory framework is conducive to this activity, with microcredit institutions aiming at self sustainability, increased microlending capacity and, in some cases, transformation into banks.
Our goal is to make microfinance a fully-fledged segment of the European financial sector, alongside for more traditional ways of banking, thus pursuing core European Union's objectives such as entrepreneurship, growth and job creation.
It is to be noted that in 2010, the European Parliament through a Preparatory Action is expected to make available an additional EUR 4m for investment in the field of microcredit, which will be managed with JASMINE.
