European Microfinance Network Daniel Sorrosal - European Microfinance Network Microfinance in Europe Microfinance in Europe Colloque: La Microfinance comme.

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  • European Microfinance NetworkDaniel Sorrosal - European Microfinance Network

  • European Microfinance NetworkThe 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 Dpts 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.History

  • European Microfinance Network The mission of EMN is to promote microfinance as a tool to fight social and economic exclusion and to promote microentrepreneurship and self-employment.

    This is achieved by supporting the development of microfinance organisations through the dissemination of good practices and by improving the regulatory frameworks for microfinance, self-employment and microentreprises at the European Union and Member State levels. Mission

  • European Microfinance NetworkEMN 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 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 GrowthStrategy

  • European Microfinance NetworkKlaas 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)Governance

  • European Microfinance NetworkEMN has 88 members in 21 European countries.

    Members are microfinance providers, research institutions, banks, etc.75% practitioners25% Eastern Europe22% consulting, research organisms10% banksMembers

  • European Microfinance NetworkEMN strengthens its members and develops exchangeIn 6 years: 10 different training courses more than 1.500 persons trained 12 consultancy missions Organisation of 15 exchange visits with over 250 participants Publication and dissemination of good practice guides

  • European Microfinance NetworkEMN develops research, increases visibility and creates links between stakeholdersEMN participated with its members in 42 research projects about the sector, and set up a Research Working Group.

    EMN has a specialinterest on gender as well as migration, through the coordination of projects co-financed by the European Union. A website, a quarterly newsletter, the "Microfinance Europe magazine

    Organisation of 7 Annual Conferences and 2 International Conferences with more than 2500 participants

  • European Microfinance NetworkEMN participates in improving the regulatory environmentLobbying at EU and national levelsDevelopment of specific tools (eScorecard NAPs tool kit)"The European Initiative for the development of microcredit in support of growth and employment" JASMINEImprove the legal and institutional environment in the Member StatesFurther change the climate in favour of entrepreneurshipPromote the spread of best practicesProvide additional financial capital for new and non-bank MFIsEuropean Progress Microfinance Facility - June 2009

  • European Microfinance NetworkMicrofinance emergence and evolutions

  • European Microfinance NetworkOffer 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 NetworkMicrofinance activitiesIncome-generating activitiesSMEsEducationHousingHealthBut also access to.MicroentreprisesSocial

  • European Microfinance Network

  • European Microfinance NetworkWhat is microfinance in Europe?

  • European Microfinance NetworkEntrepreneurial spirit less developed and encouraged A welfare state with strong social protection Strict regulation for microenterprisesHigh cost of social benefitsIn certain countries easy access to consumer loans (very high interest rates) Highly developed bank system, strict bank regulation Difficulties for organisms of reaching sustainabilityCharacteristics of microfinance in Europe

  • European Microfinance NetworkNumber of enterprises in (in thousands) 92551 69321 228Informal sector(Income-generating activities)> 250 employees 50 250 employees10 - 49 employees0 - 9 employees 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 GDPSource : 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 economic context

  • European Microfinance NetworkThe social contextPopulation at risk of poverty: 78 millionWorking population under the poverty line: 28 millionRate 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 NetworkThe financial contextFinancial 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 % dont have a bank account, compared to 10 % in the EU15.

    In the EU15,18 % of adults dont have access to bank transactions, 30% dont have savings and 40% dont have any credit facilities.

  • European Microfinance NetworkExisting SMEsNew traditional enterprisesMarket gap to be filled by banksIncome-generating activitiesMicroentreprises set up by excluded personsMarket gap to be filled by specialised insitutions Market segmentation

  • European Microfinance NetworkIn 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 Main features

  • European Microfinance NetworkPart of existing programmes of development banksPolitical pressure at the basis Sometimes image problem for reaching out to clients and make them pay

    Small scale (exemption: Prince Trust)Finance seen as added value for enterprise supportInspired by international practice Integrated non financial services Recent developmentStrong growth Synergy effects on costs due to existing infrastructure. European Microfinance Institutional models

  • Microfinance models by activity

    Micro Enterprise LendersInclusion LendersMicro LendersObjectiveMore enterprisesMore entrepreneursMore access to creditFocusEnterpriseEntrepreneurCredit accessRisk ManagementSelection of viable businesses only Repayment follow upLeverage, economies of scale & InnovationLoan size 10 - 25 K 5 -10 K 2 -10 KServicesBusiness Plan & FinanceCoaching & Finance Finance onlyMethodologyBusiness Plan LendingBusiness Plan LendingStep lendingType of serviceOne-shotOne shot & Some recurrent clientsRecurrent clientsBest adapted toStart-upsNew EntrepreneursSmall, recurrent finance needsLess adapted toPlain credit, atypical ideas, concepts not well developedExisting entrepreneurs, not needing coachingHigher loan needs, higher risk profiles

  • 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 didnt include one major actor in Poland and the network of Procredit banks in Eastern Europe.European Microfinance in figures

  • European Microfinance Network28EMN Survey of the Microcredit Sector in the European Union 2008-2009Survey participants: 170 organisations in 21 countries

    Total 84,523 microloans for 828 million

  • European Microfinance NetworkNumber of active clientsEnd of 2009: 135,815 active clients (72% response rate)

  • European Microfinance Network30Target clients:People excluded from traditional financial services: 47% of organisationsWomen: 44% Ethnic minorities and/or immigrants: 41%Unemployed people: 32%No specific target: 30%

    Type of businesses:Start-ups rather than existing enterprisesRegistered 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 personsExcluded people and new businesses are the main targets

  • European Microfinance NetworkMission: jobs, inclusion and growth

  • European Microfinance NetworkLoan Products and Pricing: Diversity in Loan Sizes and Interest ratesA variety of loan sizes offered to clients.

    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).

    (Non-weighted) Interest rates charged range from 2% at the lowest to 22% at the highest. The average is 9%.

    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 NetworkNot only just microcredit for enterprise developmentOnly 19% of respondents do not provide any kind of support. 42% provide other financial services

  • European Microfinance NetworkIn 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 NetworkLack of sufficient funding to cover operational costs of microlenders, and the short-term basis on which funding is offered;

    High dependency on the public sector for operational and capital funding, with little independent revenue due to low interest rates;

    An unfavourable legal framework resulting from the implementation of usury laws that prohibit development of the sector;

    The development of best practices among microlenders in order to strengthen their operational and performance capacities.

  • European Microfinance NetworkAn enabling European policyMF is situated between two major areas: economic policy and social inclusion policy.This two-fold approach is completed by regional cohesion policyInitiatives: JEREMIE, JASMINE and EPMFThe PROGRESSMicrofinance 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 NetworkEuropean Progress Microfinance Facility200 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 NetworkMerci, thank you !

    Daniel Sorrosal EMN Executive

    European Microfinance Network - Brussels37 Rue du Prince Royal 1050 Brussels BelgiumTel: +32 494 468 010

    European Microfinance Network - Paris103 Rue de Vaugirard75 006 Paris - FranceTel: +33 1 42 22 01 19 Fax: + 33 1 42 22 06 44

    92% of European enterprises are microenterprises with less than ten employees1/3 of enterprises are started out of unemploymentSelf-employment represents more than one job in seven; making up 15% of total employment45% of all European would like to be self-employed21% of SMEs indicate that accessing finance is a problem and the % is much higher for microenterprisesA Gender Focus on MicrofinanceAccess to EU FundingAdvocacy for Microfinance InstitutionsAn introduction to microfinance in EuropeDelinquency ManagementLoan OfficersMarketing and outreach in the Western European contextMicrofinance and Ethnic MinoritiesRisk and social performance measurement in microfinanceTheory and practice of microfinance in EuropePROGRESS: expected to leverage 500 million euros for 45000 microloans until 2014; average loan size of 11,000euros Targets: vulnerable groups and microenterprisesCette diapo balaie toutes les dimensions des activits (larges) de la microfinance.A lorigine, la microfinance part de lentreprise ou de lactivit gnratrice de revenus (activit informelle permettant une personne un complment de revenu). Au dpart dans les PVD, lobjectif est intgrer les pauvres, en Europe il sagit plus dune inclusion sociale que strictement conomique et productive.Cest partir de lanalyse de besoins mergeants (exprims ou non) et non couverts, que la microfinance exprimente et dveloppe de nouveaux outils : dispositifs tels que les mutuelles de sant, la micro-assurance, le microcrdit social La dmarche est toujours exprimentale lorigine.- *For these numbers, the data of Fundusz Mikro have not been includedDebt counselling 20%MP 18%Savings 6%Insurance 6%Transfert - 3%Mortgage 4%


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