The development of microfinance in Europe has encountered many legal and political obstacles. It is therefore important that the European Microfinance Network be strongly involved in advocacy on a wide range of issues related to microfinance, micro-enterprises, social and financial exclusion, self-employment and employment creation.

EMN, in close collaboration with the Microfinance Centre (MFC) actively participates in advocacy activities through the organisation of conferences that facilitate meetings between policy makers and practitioners, the provision of strategic information to its members on EU policy, meetings with political leaders, and public responses regarding various issues.

During 2016-17, EMN has been carrying out the following advocacy actions at European level:

1. EU Definition of microfinance and microcredit. The existing EU definition of microfinance i.e. the maximum amount of 25.000 € is not satisfactory as it does not recognise the specificities of the sector. A new definition at EU level is necessary to identify the potential beneficiaries of EU funding and support and to justify the advocacy work towards policy makers in general. Proposal for a new EU Microfinance definitionin progress


2. Regulatory framework for Microfinance and Capital Markets Union (CMU). One of the main issues of the capital markets union is to unlock financing of innovation, enterprises, and especially SMEs and start-ups. In a situation where, 92% of European enterprises are microenterprises of less than 10 employees1 (many of them having no employees) and where start-ups include a growing part of unemployed, it seems important to include these “missing entrepreneurs” in the total demand of the capital market, knowing that many of them are excluded from access to banks. This is the context for development of microcredit in support of growth and employment, which is in itself a social innovation on behalf of an inclusive entrepreneurship. EMN-MFC Note to DG FISMA


3. Regulatory framework for the creation of microenterprises and self-employment. The Commission could establish a basic set of common objectives, and invite Member States to undertake a programme of reforms, aimed at improving the conditions for inclusive entrepreneurship, taking account of national circumstances and priorities. In view of the inclusive growth goal in the Europe 2020 strategy and this set of common objectives, Member States should be encouraged within the context of their National Reform Programmes to take on board those actions necessary to promote a more favourable environment for inclusive entrepreneurship which falls within the national institutional, legal and commercial frameworks. The Commission could also help the Member States by indicating quantitative targets for inclusive entrepreneurship and by compiling an inventory of good regulatory practices. Note sent to DG GROW


4. Pricing of microcredit. There is a widely spread and important misgiving about the pricing of microcredit in the EU, which often leads to inappropriate references to usury interest rates. With this note, EMN throwed some light in the fundamentals about the cost and pricing for microfinance. Cost and pricing of Microfinance. Note sent to DG EMPL and ECFIN


5. Pricing of EU financial instruments. In the framework of the evaluation of the new Helenos fund for microfinance, the issue of risk assessment and pricing of EU financial instruments popped up. In the case of social purpose investment, we would argue that the risk of loss and the consequent return requirement on an equity investment should be balanced with the social impact. Indeed, of the only two equity investments in MFIs made to date, the case of microStart is an example where the social objective of the project is considered by all parties as fully achieved while, at the same time, the equity investment of the EU budget managed by EIF is financially at loss at the time of exit. The question is thus: how to assess the value of social impact versus financial return and how to factor these into the pricing and performance indicators of the project. Risk assessment and pricing of EU financial instruments for MF


6. MoU between EMN-MFC and the EIB Group. The microfinance sector is in rapid development within the EU at a time when micro-entrepreneurship is becoming a growing option next to salary employment or unemployment benefits. The growing migration flows also bring to the EU a new population of often qualified refugees capable to develop their own enterprise but without the necessary initial access to finance. In this framework, all efforts should be developed at EU level to support the microfinance sector in terms of policies, regulation, finance and technical assistance. This MoU is to develop a privileged, non-exclusive, partnership between the EIB Group and EMN & MFC to help support the microfinance sector. MoU EMN-MFC and the EIB groupin progress


7. Use of European Social Fund (ESF) for Microfinance. Supporting entrepreneurs setting up their own business is one of the objectives of the European Social Fund (ESF). ESF offers a range of funding opportunities for financial and non-financial services. It has been used to co-finance entrepreneurship training and guarantee funds in different countries such as Lithuania, France and Germany to name a few. Nevertheless, even when ESF have specific lining with the MF sector in Europe, MFIs are having extraordinary difficulties in order to be instrumental in channelling these funds towards the underserved. The purpose of this study is to identify some of these difficulties in order to promote alternative solutions to the EU institutions. EMN-MFC Market failure study on the use of ESF for MF


8. Preparation of the post 2020 framework (proposals in preparation).

  • Market size and financial gap study for Microfinance in Europe
  • Cost of BDS provision and pilot action for migrants
  • Future role of the microfinance networks in Europe
  • New guarantee instrument for the investors in MFIs
  • Human capital funding post 2020 (first paper sent to DGEMPL)
  • ESF off-the-shelf instrument
  • EU Advocacy toolkit for Microfinance
  • National legislative mapping reports for Microfinance in Europe (can be found here)


EMN will continue its advocacy efforts at EU and national level during the coming years. Do not hesitate to send to us your suggestions for the development of new advocacy actions for the development of the microfinance sector in Europe. Please send to us your comments/inputs via