Microloans: Europe’s antidote

As the European economic crisis lags on and unemployment levels remain high throughout the continent, an agreement between the European Investment Bank and the European Commission promises to help 46 thousand Europeans to start a new business in the next ten years by allocating 500 million euros to a micro-credit fund.

The first project under this European Progress Microfinance Facility was officially launched on February 11 in The Hague, aims to provide 20 million euros to Qredits, a Dutch microfinance institution. The idea is to create jobs and provide those who have the least access to the labour market and the banking system with a means of becoming productive members of society.

Furthermore, by the end of this month, the second contract will be officially signed in Belgium and the European Investment Fund (EIF) is preparing another 14 transactions to be signed throughout the European Union in the course of the year.

European statistics point to Europe being far from exploiting its potential for entrepreneurship as whereas in the USA one in ten adults starts up their own business, in Europe only one in twenty do. According to the European Commissioner for Employment, Social Affairs and Inclusion, Laszlo Andor, 45 per cent of Europeans would like to set up their own businesses but lack the opportunity to and 20 to 50 per cent of these are people who are currently unemployed.

“Micro-lending is not just a question of disbursing small size loans to a client; it is essential that the loan is accompanied by advisory services,” said Andor and explained that the European Commission will provide, as well as the microloans, advisory services with a programme called Jasmine Initiative which will fund microfinance providers and help them achieve sustainability.  

Find out more: www.european-microfinance.org