Transcript Folie 1

Microfinance
in Europe
Colloque: La Microfinance
comme outitl d’integration
economique
April 26th 2011, Brussels
Daniel Sorrosal - European Microfinance Network
European Microfinance Network
History
 The European Microfinance Network (EMN) was
launched by its founding members (Adie - France, nef
- UK and EVERS&JUNG - Germany) in April 2003,
with the support of the European Commission and
the French Caisse des Dépôts et Consignations
(CDC).
 The EMN is a Non Governmental Organisation
("Association loi 1901, under the French legislation)
and was officially registered in Paris on May 23rd
2003.
European Microfinance Network
Mission
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The mission of EMN is to promote microfinance as
a tool to fight social and economic exclusion and to
promote microentrepreneurship and self-employment.
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This is achieved by supporting the development of
microfinance
organisations
through
the
dissemination of good practices and by improving
the regulatory frameworks for microfinance, selfemployment and microentreprises at the European
Union and Member State levels.
European Microfinance Network
Strategy
 EMN is a network organisations created, run and
supported by its members.
 EMN supports its members:
- by making their working environment more favourable,
both at European and national levels.
- by helping them grow and develop so that they become
sustainable organisations that respond to specific
market needs.
✓ 6 Working Groups: Research, IT, Social Performance,
Asset Building, Legal Environment and Regulation and
Growth
European Microfinance Network
Governance
 Klaas Molenaar - President (Triodos Facet – The Netherlands)
 Maria Doiciu - Vice-president (Eurom - Romania)
 Giampietro Pizzo – Vice-president (Microfinanza - Italy)
 Jean-Pierre Watthy – Treasurer (Fonds de Participation - Belgium)
 Joyce Kimwaga – Secretary (NEEM - Sweden)
 Faisel Rahman (Fair Finance – UK)
 Silvia Rico (Foro Nantik Lum de Microfinanzas - Spain)
 Helena Mena (Millennium bcp – Portugal)
European Microfinance Network
Members
EMN has 88
members in 21
European countries.
Members are
microfinance
providers, research
institutions, banks,
etc.
75% practitioners
25% Eastern Europe
22% consulting,
research organisms
10% banks
European Microfinance Network
EMN strengthens its members and
develops exchange…
In 6 years:
• 10 different training courses
• more than 1.500 persons
trained
• 12 consultancy missions
European Microfinance Network
• Organisation of 15
exchange visits with over
250 participants
• Publication and
dissemination of good
practice guides
EMN develops research, increases visibility
and creates links between stakeholders
EMN participated with its members in
42 research projects about the
sector, and set up a Research
Working Group.
EMN has a special
interest on
gender as well
as migration,
through the
coordination of
projects
co-financed by the
European Union.
European Microfinance Network
A website, a quarterly newsletter, the
"Microfinance Europe“ magazine …
Organisation of 7 Annual Conferences and 2
International Conferences with more than
2500 participants
EMN participates in improving the
regulatory environment
 Lobbying at EU and national levels
 Development of specific tools (eScorecard – NAPs
tool kit…)
 "The European Initiative for the development of
microcredit in support of growth and employment" –
JASMINE
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Improve the legal and institutional environment in the Member States
Further change the climate in favour of entrepreneurship
Promote the spread of best practices
Provide additional financial capital for new and non-bank MFIs
 European Progress Microfinance Facility - June 2009
European Microfinance Network
Microfinance – emergence
and evolutions
European Microfinance Network
Offer adapted financial services to a significant
number of people on low income who are
economically active in order to improve their living
conditions and their participation in the local
economy.
Build up in the long term sustainable financial
institutions at the service of underpriviledged
populations .
Source : CGAP (Consultative Group to assist the Poor –
International investor)
European Microfinance Network
Microfinance activities
Income-generating
activities
Microentreprises
SMEs
But also access
to….
Health
Education
Housing
Social
European Microfinance Network
Microfinance in Europe
European Microfinance Network
What is microfinance
in Europe?
European Microfinance Network
Characteristics of microfinance in Europe
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Entrepreneurial spirit less developed and encouraged
A welfare state with strong social protection
Strict regulation for microenterprises
High cost of social benefits
In certain countries easy access to consumer loans (very
high interest rates)
 Highly developed bank system, strict bank regulation
 Difficulties for organisms of reaching sustainability
European Microfinance Network
The economic
context
Number of enterprises in (in thousands)
> 250 employees
9
50 à 250 employees
255
10 - 49 employees
0 - 9 employees
1 693
21 228
 23,2 million enterprises in the EU
27
 91,5% of entreprises in
Europe are micro-enterprises
(0 - 9)
 The informal sector represents 10
to 15% of GDP
Informal sector
(Income-generating activities)
European Microfinance Network
Source : Communication of the Commission dated
10/11/2006 on SME policy as regards the total number of
enterprises. Breakdown according to Eurostat 2006 (2003
data)
The social context
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Population at risk of poverty: 78 million
Working population under the poverty line: 28 million
Rate of people at risk of poverty in the EU: 17% (2007)
National figures vary from 10% to 25%.
Especially at risk: women, young people (20% for children
between 0-17; 19% for those between 18-24 years),
single parent households with children (34%).
✓ Long-term unemployment is one of the main factors of
exclusion.
European Microfinance Network
The financial context
 Financial exclusion defined as the part of the population without a
bank account, neither savings nor credit (nor insurance).
 7 % in Europe 15, 34% in Europe 10
 In the 10 new EU countries 47 % don’t have a bank account,
compared to 10 % in the EU15.
 In the EU15,18 % of adults don’t have access to bank transactions,
30% don’t have savings and 40% don’t have any credit facilities.
European Microfinance Network
Market segmentation
Existing SMEs
New traditional enterprises
Microentreprises set up by
excluded persons
Income-generating activities
European Microfinance Network
Market gap to be filled
by banks
Market gap to be filled by
specialised insitutions
Main features
In the EU15: microcredit rather than microfinance
Definition UE: loan below 25 000 EUR
Focus on unemployed persons setting up a business
(inclusion)
Microfinance comprises financing and non-financial
services
Microfinance is hardly profitable, but makes sense
economically
Focus on social inclusion and job creation rather than profitability.
European Microfinance Network
European Microfinance Institutional models
ONG, focus microfinance
ADIE in France, Per Micro in Italy, ANDC in
Portugal
Inspired by international practice
Integrated non financial services
Institutional support programmes
DMI in Germany, Finnvera in Finland, Fonds de
Participation in Belgium, ICO in Spain, ...
Part of existing programmes of development
banks
Political pressure at the basis
ONG, focus on specific groups
Sometimes image problem for reaching out to
clients and make them pay
PSYBT in UK, Banco Mundial de la Mujer in Spain,
Autonomia Foundation in Hungary, etc
Special entities of banks
Small scale (exemption: Prince Trust)
Finance seen as added value for enterprise
support
NBFI, Foundation microfinance approach
Credal in Belgium, Fair Finance in UK, Patria Credit in
Romania, Mikrofond in Bulgaria, etc – MFIs in Eastern
Europe and Credit Cooperatives in Western Europe
European Microfinance Network
Microbank and Savings Banks Foundations in Spain,
Millennium Microcredito in Portugal, Microstart (ADIE &
BNP) in Belgium
Recent development
Strong growth
Synergy effects on costs due to existing
infrastructure.
Microfinance models by activity
Micro Enterprise
Lenders
Inclusion Lenders
Micro Lenders
Objective
More enterprises
More entrepreneurs
More access to credit
Focus
Enterprise
Entrepreneur
Credit access
Risk Management
Selection of viable
businesses only
Repayment follow up
Leverage, economies
of scale & Innovation
Loan size
€ 10 - 25 K
€ 5 -10 K
€ 2 -10 K
Services
Business Plan &
Finance
Coaching & Finance
Finance only
Methodology
Business Plan
Lending
Business Plan Lending
Step lending
Type of service
One-shot
One shot & Some
recurrent clients
Recurrent clients
Best adapted to
Start-ups
New Entrepreneurs
Small, recurrent
finance needs
Plain credit, atypical
Existing entrepreneurs,
Less adapted to ideas, concepts not
not needing coaching
well developed
Higher loan needs,
higher risk profiles
European Microfinance in figures
In 2009, a total of 84,523 microcredits for
828 million euros were granted*.
In Western European countries, 51,027 loans were made for 477 million euros,
while in Eastern Europe 18,293 loans were made for 307 million euros.
End of 2009: 135,815 active clients.
(based on 72% of survey respondents)
€49.9 billion for 237,495 loans since their creation.
(based on 74% of survey respondents)
*The data didn’t include one major actor in Poland and the network of Procredit banks in Eastern Europe.
EMN Survey of the Microcredit Sector in the European
Union 2008-2009
Survey participants: 170
organisations in 21 countries
Total 84,523 microloans for
€828 million
European Microfinance Network
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Number of active clients
End of 2009: 135,815 active clients (72% response rate)
European Microfinance Network
Excluded people and new businesses are the main targets
Target clients:
•People excluded from traditional financial services: 47% of
organisations
•Women: 44%
•Ethnic minorities and/or immigrants: 41%
•Unemployed people: 32%
•No specific target: 30%
Type of businesses:
•Start-ups rather than existing enterprises
•Registered business with less than 5 employees are the main
target (55%)
•24% provide loans to informal or non registered business
65.5% of clients are « unbankable« persons
European Microfinance Network
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Mission: jobs, inclusion and growth
European Microfinance Network
Loan Products and Pricing: Diversity in Loan Sizes
and Interest rates
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A variety of loan sizes offered to clients.
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The maximum loan size offered to clients ranges from
€37,000 to €220 (even if the EU defined a microcredit as
being below €25,000).
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(Non-weighted) Interest rates charged range from 2% at the
lowest to 22% at the highest. The average is 9%.
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Average (non-weighted) interest rates vary by country - the
highest rates are charged in the United Kingdom (22%
average) and Poland (17% average) and the lowest in
Portugal and Finland (3% and 2% respectively).
European Microfinance Network
Not only just microcredit for enterprise development
Only 19% of respondents do not provide any kind of support.
42% provide other financial services
European Microfinance Network
In Western Europe the need to provide microentrepreneurs with access to
microloans is now recognised. However, in order to develop and better
respond to the needs of potential clients, the microfinance sector faces a
number of challenges:
• An environment characterised by a highly developed, competitive
financial service industry, with a growing number of operators offering
high-interest consumer loans leading to over-indebtedness by families;
• An entrenched welfare system that fails to encourage people to seek
self-employment;
• The lack of an entrepreneurial culture, and moreover the lack of
incentives to develop one at various levels of society;
European Microfinance Network
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Lack of sufficient funding to cover operational costs of microlenders, and the
short-term basis on which funding is offered;
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High dependency on the public sector for operational and capital funding, with
little independent revenue due to low interest rates;
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An unfavourable legal framework resulting from the implementation of usury
laws that prohibit development of the sector;
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The development of best practices among microlenders in order to strengthen
their operational and performance capacities.
European Microfinance Network
An enabling European policy
 MF is situated between two major areas: economic policy
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and social inclusion policy.
This two-fold approach is completed by regional cohesion
policy
Initiatives: JEREMIE, JASMINE and EPMF
The PROGRESS Microfinance Facility for Employment
and Social Inclusion (EPMF)
The creation of a dedicated EU Entrepreneurship and
Microfinance Taskforce now converted into a permanent
unit within the organigram of DG Employment as focal
point for Microfinance at European level.
European Microfinance Network
European Progress Microfinance Facility
 €200 million Microfinance facility for investment, guarantee
and lending to EU MFIs. The main funders are the EU with
€100 million reallocated from the PROGRESS program over 4
years (2010-2013), plus €100 million matching funds from
European Investment Bank
 Expected to leverage: more than €500 million, in a joint initiative
with international financial institutions particularly the European
Ivestment Bank (EIB) Group
 The new facility is aimed at supporting unemployed people with
a business project find the necessary financial means to set up
their own business through access to microcredit as well as
financially supporting existing microenterprises in the context of
the crisis.
European Microfinance Network
Merci, thank you !
Daniel Sorrosal
EMN Executive Secretary
[email protected]
European Microfinance Network - Brussels
37 Rue du Prince Royal
1050 Brussels – Belgium
Tel: +32 494 468 010
European Microfinance Network - Paris
103 Rue de Vaugirard
75 006 Paris - France
Tel: +33 1 42 22 01 19
Fax: + 33 1 42 22 06 44
www.european-microfinance.org
European Microfinance Network