Microfinance is not just for developing countries anymore and is increasingly being used by citizens in the European Union, the European Commission said. Indeed, about 2.5 billion adults around the world have no access to a bank account, leaving them without a credit history and outside the loan market.
"By providing access to microfinance to create jobs, particularly for disadvantaged people, the facility has proved to be an important social investment tool that should continue," EU Commissioner Laszlo Andor said yesterday when he presented the Second Annual Report into the EU's European Progress Microfinance Facility.
The scheme, launched in 2010, together with the European Investment Bank Group provides to help people who would otherwise have difficulties getting a loan to start or develop their own business by providing access to finance. It also gives incentives to serve "risky" target groups e.g. young people who cannot put up sufficient collateral for a traditional bank loan.
A total of 203 million euros has been set aside for the programme by the European Investment Bank and the EC, which they hope will result in 46,000 2-3 year loans by 2013. The EC said the scheme was already a success, with more than 20 microcredit lenders participating, in 13 EU countries.
Muhammad Yunus's receipt of the Nobel peace prize in 2006 for his work with Bangladeshi microlender Grameen Bank brought international attention to microfinance as a way to provide low-cost credit and fight poverty.
"It is more difficult for these people to reach microfinance because it is less known by the public and by people who could need microfinance but do not know that these type of services exist in their country," said Convergences 2015's Faustine Delasalle.
Read the EC Press Release HERE!