"Appropriate finance facilities for businesses are a key prerequisite for economic growth". The 1st European Microfinance Day (EMD) on 19 and 20 Oct 2015 was co-organised by the EESC to raise awareness of microfinance as a tool to fight social exclusion and unemployment in Europe. In the presence of Her Majesty Queen Mathilde of Belgium and Commissioner Marianne Thyssen, the President of the EESC´s ECO Section for Economic and Monetary Union and Economic and Social Cohesion, Mr Joost van Iersel, underlined the importance in the EU of strengthening competitiveness, sustainable development and social inclusion. "There are quite some constraints in Member States to develop microfinance. Framework-conditions for microfinance have to be improved", he asked EU policymakers.
Microfinance is constituted of a range of financial services for people who are traditionally considered non-bankable, mainly because they lack the guarantees that can protect a financial institution against the risk of loss. Microfinance refers to small loans and is often combined with other financial services, advice or funding. Whilst microfinance has a strong focus on developing countries, it is also provided to borrowers in the EU.
Indeed microfinance in Europe is quickly becoming a relevant tool to reduce social & financial exclusion through the provision of financial (microcredit, microinsurance, and so on) and non-financial services (trainings, mentoring, etc.). The European microfinance sector offers solutions to the under-served in view of helping them become self-employed and in turn create jobs across the continent.
The EESC has worked on the issue and is convinced that microfinance is a way of fostering the entrepreneurial spirit and of creating new jobs in micro-enterprises. In order to reduce complexity and elevated cost related to microcredits, the EESC proposes to develop on the one hand standardised high-tech services, and on the other hand provide guarantees and co-financing.
In the EESC's view, the true revolution of microfinance is that through intermediation activities, it gives a chance to people who were denied access to the financial market and empowers people to finally be able to carry out their projects and ideas with their own resources, thus escaping assistance, subsidies and dependence.