Document 806057

Transcription

Document 806057

COPIE 2 Access to Finance
Baseline Study
European Microfinance Network
103 Rue de Vaugirard
75006 Paris - FRANCE
Tel: +33 (0)1 42 22 01 19 - Fax: +33 (0)1 42 22 06 44
September 30, 2009
1
Executive Summary
The present COPIE 2 baseline study provides background on European microfinance,
examines ESF intervention to support the sector, identifies best practice and provides keys
for ESF support in the future. A specific insight is provided into microfinance activities in five
European countries/regions which are core members of COPIE 2. These are:
Flanders/Belgium, Czech Republic, Germany, Lithuania and Spain. Information was gathered
through on-site semi-standardised interviews1.
All over Europe individuals from specific target groups who would like to set up or develop
a microenterprise (with less than 10 employees) or become self-employed, such as (longterm) unemployed persons, economically inactive women, single parent households,
migrants and ethnic minorities, young people, seniors or disabled persons, are reported to
face increased barriers in accessing external finance. They tend to ask for small amounts of
loans which are perceived as too risky by banks, have little personal capital, lack collateral
and guarantees and have little or no credit history.
Microfinance tackles this issue by providing easily accessible, small loans for “non
bankable” persons combined with non financial services such as business support.
Microfinance is a growing but young activity in Europe, particularly in Western Europe,
where most of today’s microfinance organisations have only been created since the year
2000. This contrasts with a mature, more commercially oriented, sector in Eastern Europe.
Different models of microfinance provision exist: linkage banking, microfinance
organisations with a specific legal status or promotional banks. The linkage banking model,
especially prevalent in Western European countries, brings together a bank and a social
organisation throughout the whole process of business support and credit provision; this has
proven to be especially effective in reaching out to specific target groups.
EU structural funds represent a highly important support for microfinance provision.
Microfinance is relatively labour intensive as it is based on firm knowledge of the borrower
capacity and a close relationship with the borrower; most often it is also combined with
business support. Especially in Western Europe microfinance is therefore probably never
going to turn into a completely sustainable system. Under the EQUAL initiative from 200006, but also in the new funding period 2007-13, several microfinance providers have used
and are currently using ESF funds to test new financial and non-financial products and
services, build up partnerships and networks, develop training schemes and carry out studies
as well as mutual learning activities; they also use these funds to cover some of their
operational costs, to build guarantee funds programmes to subsidise interest rates and for
loan capital. ESF financial support has proven to be of high added value for developing
microcredit providers’ skills, products and services and increasing their outreach.
However, this support has not yet reached its full potential. Microfinance lies at the
intersection between at least two structural funds’ scope: the European Social Fund (ESF)
and the European Regional Development Fund (ERDF). Since several years, especially at EU
level, microfinance is gaining growing recognition: as a cost-effective tool for social inclusion
on the one hand and for regional economic growth on the other. Supporting the setting up
1
questionnaire guideline in annex
2
or developing of a microbusiness costs only a fraction of unemployment or welfare benefits
paid out and activates excluded people’s potential to become again active members of
society. In the National Action Plans for Social Inclusion (NAPs) however, microfinance is
most often not mentioned at all. If it is, it is not translated into the ESF Operational
Programmes (OPs). And the ERDF OPs tend to focus on funding for SMEs. This trend is also
confirmed for the countries treated in this baseline study. National and regional public
policies generally tend to give priority to salaried employment rather than to selfemployment and to small, medium and large enterprises rather than to microenterprises.
Especially in the current crisis context, public policies specifically focus on requalification
measures and training and advice for (former) employees of large enterprises rather than on
establishing or developing microbusiness. It is therefore necessary to systematically
integrate microfinance as a basic social and financial service into the NAPs and into the
structural funds’ Operational Programmes. Moreover, microfinance, self-employment and
microentrepreneurship should become a policy priority in the field of social inclusion and
economic growth.
Studies about the rough potential demand for microloans still show a very large gap
between actual demand and supply of microfinance all over Europe. There is still lacking
access to external finance for potential microfinance target groups, which indicates on the
one hand a significantly larger microfinance market, as actually served by the institutions
acting in microfinance, and on the other hand an access to finance for respective target
groups that is highly limited. Nevertheless, there is an extensive scope for further research,
to measure and control the actual access limitations and the potential demand for
microfinance. At the national level, systematic, large-scale studies about the actual financing
needs of specific target groups are still lacking. Such systematic studies can be used as a
basis for national microfinance policies as was the case in the Netherlands where a
Microfinance Council was set up in 2005 after an extensive market study had been carried
out.
The preset baseline study also shows the need for a strong self-employment status, an
enabling policy and legal environment for microenterprises, self-employment and
transition from unemployment to self-employment. While favourable transition schemes
are reported in Germany, their absence hampers the development of microenterprises in
Belgium and in Czech Republic. In these countries, establishing one’s own business means
suddenly losing all benefits, even if the business has not yet become profitable. Moreover, in
Belgium, only full, but not part time, self-employed activities are eligible for microfinance
from the main microloan provider.
Moreover, as microfinance lies at the intersection of social inclusion and economic growth,
it comes under the responsibility of different stakeholders at national and regional level.
While enterprise-oriented initiatives reach « economic » Ministries, microcredit reaches
« social » Ministries. To facilitate cooperation at government level an inter-ministerial
committee or task force could be assigned and meet regularly to design and implement a
strategy for inclusive entrepreneurship that includes microfinance. Microfinance also
involves different institutions such as commercial and cooperative banks, foundations and
social and business support organisations, employment agencies etc. This complicates the
efficiency of microfinance delivery. At microfinance institutions and at apex and supervisory
level (Ministries and regulators), there is a general lack of specific capacity about
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microfinance. Training on microfinance delivery systems are a necessary step to build up
microfinance capacity for all stakeholders.
Also, some of the EU funded microfinance programmes presented in this study had limited
impact due to complex bureaucratic procedures and lack of information on such
programmes. Very demanding application procedures for taking part in a microfinance
programme are especially hampering for disadvantaged target groups. Making sure that
there is sufficient advice and coaching available to assist individuals from disadvantaged
target groups in submitting applications would be a helpful way of facilitating access to EUfunded microloan programmes. Moreover, to raise uptake of microfinance programmes,
these should be implemented in partnership with local public and private stakeholders
such as regional and local authorities, financial institutions, social and business support
organisations and the entrepreneurs themselves.
Five selected good practice examples of ESF supported microfinance for disadvantaged
entrepreneurs are presented in this study. The main guidelines for future action are
described in the conclusions/recommendations chapter.
4
Table
Executive Summary ........................................................................................ 2
State of the Art .............................................................................................. 8
1. Introduction ..................................................................................................................................... 8
2. Microfinance in the European Union – an effective tool for inclusion ........................................... 9
3. The European microfinance sector ............................................................................................... 10
3.1 Characteristics ......................................................................................................................... 10
3.2 Microlending models ............................................................................................................... 11
4. Main challenges ............................................................................................................................. 14
5. Examples of EU funding for microfinance with a specific focus on ESF ........................................ 15
5.1 Individual pilot actions ............................................................................................................ 15
5.2 Capacity building ..................................................................................................................... 17
5.3
Funding and guarantees .................................................................................................... 19
5.3.1
Funding for operating costs and loan capital ................................................................ 19
5.3.2
Provision of guarantees ................................................................................................. 19
Partner profiles .............................................................................................21
Belgium .........................................................................................................21
1 Access to finance: country background ......................................................................................... 21
1.1 Country background and context ............................................................................................ 21
1.2 Legal and regulatory background for access to finance .......................................................... 22
2. Mapping of Access to finance........................................................................................................ 22
2.1 Available research on finance needs of particular target groups ........................................... 22
2.2 Micro-entrepreneurship and access to finance as political priorities ..................................... 23
2.3 Main microfinance players (national/local) ............................................................................ 24
3. Use of ESF in promoting access to finance .................................................................................... 27
3.1 ESF policy priorities ................................................................................................................. 27
3.2 Existing ESF projects on access to finance and their results ................................................... 27
3.3 Selected good practice ............................................................................................................ 28
4. Lessons learned and policy recommendations ............................................................................. 28
Czech Republic ..............................................................................................30
1. Access to finance: country background ........................................................................................ 30
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2.3 Main MF players (national/local) ............................................................................................ 33
3. Use of ESF funds in promoting access to finance .......................................................................... 34
Germany .......................................................................................................38
2. Mapping of access to finance ........................................................................................................ 39
3.1 ESF Policy priorities ................................................................................................................. 43
Lithuania .......................................................................................................50
1.2 Legal and regulatory background ............................................................................................ 50
3. Use of ESF funds in promoting access to finance .......................................................................... 53
4. Conclusion: lessons learned and policy recommendations .......................................................... 56
Spain .............................................................................................................57
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1. Access to finance- Country background and context .................................................................... 57
3.1 ESF Policy priorities ................................................................................................................. 60
Conclusions and Recommendations ..............................................................69
BIBLIOGRAPHY ..............................................................................................70
ANNEX - Interview – Questionnaire Guideline ...............................................75
7
State of the Art
1. Introduction
All over Europe self-employment and micro-entrepreneurship have proven to be a way of
facilitating social and economic inclusion for individuals excluded from the labour market
such as the (long-term) unemployed, economically inactive women, single parent
households (mostly headed by women), migrants and ethnic minorities, youth, seniors,
persons living in rural areas, individuals with disabilities, or ex-offenders. Entrepreneurs from
specific target groups mention a range of factors describing their situation before they
started their enterprise, such as low utilization of their qualifications, boredom and
frustration or lack of options. They see entrepreneurship as a way of taking control and
being their own boss, of attaining professional satisfaction, reward and better income.
Entrepreneurship can thus be a way of integrating and stepping up the social ladder.
Generally, entrepreneurs from specific target groups concentrate in less competitive, workintensive sectors with low entry barriers especially trade, personal services, construction,
catering or the clothing industry. They tend to establish microenterprises or become selfemployed. Self-employment means someone who is not working for an employer but finding
work for oneself or having one’s own business; this can include part-time activities.
Microenterprises are defined as businesses with nine or fewer employees and a total
turnover of less than 2 million Euros. Microenterprises and self-employment contribute
significantly to the European economy. In fact, 91.5% of enterprises in Europe are
microenterprises, i.e. there are more than 21 million microenterprises in Europe2.
However, specific target groups face increased barriers when planning to start a business.
Individuals who receive unemployment or welfare benefits can be caught in what is called
the “inactivity trap” – the risk of losing a minimal, but secure income by becoming
entrepreneurs and the need to pay tax and social security contributions, even before their
business becomes profitable. Moreover, while administrative requirements can be
complicated for all entrepreneurs, they can be even more demanding for specific vulnerable
groups.
Beside policy and administrative issues, access to finance is typically perceived as a major
problem, if not the greatest single problem by entrepreneurs from specific vulnerable
groups. The unemployed or excluded people wanting to start a small enterprise, even if
asking for small amounts, rarely find bank credit. The risk of start-ups is perceived as high
and the amount of work required to process a small loan is not covered by interest and bank
fees. And individuals from specific target groups often have only little personal capital, little
or no collateral and no loan history.
Like bank funding, other financial support schemes for start-ups are sometimes difficult to
access as well, especially when they are managed by banks and require collateral.
2
COM(2007) 708 final, A European initiative for the development of micro-credit in support of growth and
Employment, November 2007
8
Microfinance aims to close this gap by providing access to financial services to people who
are excluded from bank services.
2. Microfinance in the European Union – an effective tool for inclusion
Microfinance generally comprises a variety of financial services such as microcredit and
savings, as well as other related services such as insurance, education or financial literacy. In
Europe, we can more specifically talk of “microcredit” which is “the extension of very small
loans (micro-loans) to entrepreneurs, to social economy enterprises, to employees who wish
to become self-employed, to people working in the informal economy and to the
unemployed and others living in poverty who are not considered bankable.” 3 Microcredit
can be for personal purposes of people who have no access to traditional lines of credit, e.g.
unexpected expenses such as health care, initial furniture, legal/funeral expenses, deposit to
rent an apartment or money to pay a driver’s license or a means of transport. However,
generally microcredit is intended to assist people in creating or expanding incomegenerating and job-creating activities or micro-enterprises, whose principal need is usually
the financing of the initial investment or of the working capital.
In the European context microcredits are individual loans4 of € 25,000 or less. Microcredit is
a relatively labour intensive delivery system; it is based on intensive knowledge of the
borrower capacity and a close relationship with the borrower; collateral and guarantees are
less important. Microloans are therefore especially useful for target groups for whom the
need to provide financial or in-kind guarantees may be difficult if not impossible. Moreover
in Europe microcredit is generally linked to business support which addresses the problems
entrepreneurs are facing such as dealing with a range of administrative requirements,
insufficient management skills and limited knowledge of markets and marketing. These
business support services (BDS) considerably increase the survival rate of businesses.
Microfinance is ideally a bridge to mainstream banking services, through its close
partnerships with banks. Microcredit funds often come from banks and may be linked to the
clients’ access to a bank account and a range of financial services. If the business grows, the
first loan through the microcredit scheme should be a step towards subsequent credit
directly from the bank. Microfinance can thus be considered a stepping-stone for financial
and social inclusion.
Micro-credit has also proven its cost-effectiveness as a public policy tool, costing a fraction
of equivalent passive labour market measures: the average cost of support for micro-credit
schemes in Europe is reported to be under € 5,000 per job created 5. Experience shows a
survival rate of well over 60 % after two years for businesses set up thanks to micro-credit.
3
4
In contrast to microlending in developing countries which is often group lending.
5
9
In purely economic terms public support for micro-credit is worthwhile even if the job
created only lasts a year6.
The European Union has acknowledged microfinance as a tool for inclusion and has played
an important role in the development of microfinance since 1998. It has provided partial
guarantees to cover portfolios of microloans under the growth and employment initiative
(1998-2000), the multi-annual programme for the promotion of enterprise and
entrepreneurship, in particular SMEs (2001-2005), and the Competitiveness and Innovation
Framework Programme CIP (2003-07). In Central and Eastern Europe the European
Investment Fund has partly encouraged microfinance through the Phare SME Finance
Facility. The European Union has also promoted transnational exchange as well as several
pilot programmes under the Community Action Programme to Combat Social Exclusion
(2002-2006), and through the EQUAL initiative (2001-2006) and has contributed to the
operating costs of the European Microfinance Network EMN.
Only recently the European Union has once again re-affirmed this commitment through
setting up three new programmes intended to strengthen microfinance in Europe: in 2007 it
established JEREMIE (Joint European Resources for Micro and Medium Enterprises)
intending to improve access to finance for SMEs, including microfinance, as well as JASMINE
(Joint Action to support microfinance institutions in Europe); and in 2009 the European
Commission decided to set up a new Microfinance Facility under the PROGRESS programme.
With a budget of € 30 million in the case of JASMINE and € 100 million for PROGRESS, these
two programmes are the largest single programmes ever for promoting microcredit in the
European Union. They shall provide additional financial capital for new and non-bank MFIs
as well as the needed funding for technical assistance.
3. The European microfinance sector
3.1 Characteristics
EMN’s 2008 survey on the European microfinance sector covering 2006 and 20077 brings
together data from 94 microlenders. It confirms that microfinance in Europe is a young but
fast and steadily growing sector. 42,750 loans with an average loan size of €11,000 are
reported to have been delivered in 16 countries of the EU and EEA in 2007, representing a
14% growth compared to the year before.8
However, demand still largely outstrips supply. The European Commission has estimated the
potential demand for microfinance for commencing business activity by entrepreneurs from
at-risk groups9 at 712,900 loans representing €6,145 million10.
6
ibid
Jayo, Rico, Lacalle, Overview of the Microcredit Sector in the European Union 2006-2007, EMN Working Paper
n°5
8
This does not include data from two important microfinance actors in Eastern Europe.
9
At risk of poverty group – group in relative income poverty, i.e. individuals living in households where
equivalised income is below the threshold of 60% of the national equivalised median income; according to
Eurostat
10
7
10
In Western Europe, although credit cooperatives have existed for a long time, the
microfinance sector as it appears today is relatively young. Whereas the oldest microcredit
programmes date back from the late 80s (France and UK), the great majority of the
microlenders in Western Europe were created since 2000. Due to their young age, an
elaborate traditional banking sector and a strict regulatory framework, most actors operate
on a limited scale and at local or regional level. Nevertheless, there are also strong
institutions such as Adie in France and Finnvera in Finland, which operate at a national level.
In contrast to Western Europe, the microfinance sector is mature in certain Central and
especially Eastern European countries. The majority of actors in this region have been
lending since the 1990s, supported by international donors, and many have reached
operational and financial sustainability.
In line with the mission of microfinance as a tool to foster inclusion, most of the
microfinance organizations in the EU do not focus on microlending only, but undertake a
number of activities focused on financial and employment related services such a social
enterprise lending, consumer lending, employment readiness training and enterprise
support and technical assistance. They focus on start-up businesses and on the consolidation
of existing small microenterprises, i.e. those with five or fewer employees. Financially
excluded individuals and more specifically women, unemployed persons, ethnic minorities
and migrants are their target clients. Youth (18-25 years) and disabled individuals remain as
lower priority groups. In Spain and France, immigrants are represented well over their
proportion in the population, whereas in Hungary and Spain young people are overrepresented. The greatest percentage of female loan clients is found in Spain, followed by
Bulgaria, Portugal, UK and Romania.
3.2 Microlending models
A variety of institutions disburse microloans in the EU. These are non-governmental
organisations, foundations, government bodies, savings banks, banks, credit unions and nonbank financial institutions. This variety is related to the regulatory environment in each
country.
In Western Europe, microlenders usually have non profit-maximizing goals such as social
inclusion, job creation, enterprise development and development of regions. The main
model of microfinance provision in Western Europe is linkage banking, a model that is
reported to reach out specifically well to at-risk groups. As generally only traditional,
licensed financial institutions (usually banking or government agencies) are allowed to
conduct microfinance operations, microcredit is disbursed by microfinance focused nonprofit organizations in partnership with banks. The non-profit organizations establish the
contacts with the microloan clients and provide Business Development Services to them,
thereby increasing the business survival rate and minimizing the risk of non-repayment. They
sometimes also provide loan management services on behalf of the banks. Due to banking
laws and strict regulatory oversight, these organisations do not however have the right to
completely integrate loan portfolio management into their operations, and especially are
not able to take deposits. Linkage banking can be a successful way of promoting access to
finance. Both sides benefit: banks obtain specific information on the customer segment and
can outsource part of their operating costs, while the non-profit organisations support their
initial target group with an extended range of products while learning techniques such as
11
customer evaluation models and scoring from banks. The linkage banking model is prevalent
in Germany, Italy, Ireland, Norway, Portugal and Spain.
In Spain, microcredit is mainly disbursed by the powerful Savings Banks who cover their risk
through funds reserved for “social work”, in cooperation with non-profit organisations
known as Social Microcredit Support Organisations (SMSOs). These organizations provide
the pre- and post loan support. The cooperation between savings banks and SMSOs has
proven especially successful in reaching out to specific target groups. In the 2008 EMN
survey of the European Microfinance Sector11, Spain scores highest of all countries for its
part of clients from at-risk groups such as women, migrants and young people. 68% of
microloans in Spain are disbursed to women, 47% to migrants and 33% to young persons.
Spain also scores well for “depth of outreach” indicating the client poverty level.
In Spain, the interest of the savings banks for microcredit is enormous. Twenty out of a total
of 45 Spanish savings banks grants microcredit. One of them, La Caixa, even created a
dedicated micro-credit bank called MicroBank, providing microcredit at its bank counters. In
Germany the German Microfinance Institute (Deutsches Mikrofinanzinstitut DMI) is an
umbrella organization for accredited private start-up centres that provide microloans in
partnerships with banks. In Italy, Ireland, Norway and Portugal microcredit funds are also
channelled through private and/or public entities (NGOs, foundations) in cooperation with
banks (i.e. cooperative or ethical banks, but also for-profits).
In France the biggest French microlender Adie used the linkage banking model until 2001.
This changed when Adie was allowed to borrow for direct on-lending to individual
entrepreneurs due to an amendment in the French banking law - a result of the association’s
intense lobbying.
The example of Adie in France is proof that microlending activities can reach large scale even
in industrialized countries. From 34 loans in 1990, this non profit association has grown
exponentially and disbursed nearly 13,000 microloans in 2008 while remaining focused on its
target group. Nearly half of its clients are on social welfare, 24% hardly know how to write,
read and count; 5% are Roma. The organization has now 130 offices, 432 staff members, and
1,200 volunteers who mainly provide post-loan mentoring12. Some of the ingredients of
Adie’s growth are ambitious action-planning, internal reforms and adapting good practice
from the international and wider European context. This was reinforced through favourable
changes in the legislative framework such as the right to borrow for on-lending or the lifting
of the interest rate cap for credits to self-employed persons. Internal improvements were
made to shorten and simplify the process for clients while maintaining the quality of advice
and mentoring. The core reforms focus on improving loan screening and decision making,
loan disbursement, collection and renewal process, mentoring and relations with partners.
11
Jayo, Rico, Lacalle, Overview of the Microcredit Sector in the European Union 2006-2007, EMN Working
Paper n°5
12
Adie, Rapport Annuel 2008
12
Another type of actor in the microfinance field is financial organisations with a specific legal
status allowing them to engage directly in microlending. In the UK these are specific nongovernmental, mainly non-profit and officially non-bank organizations, the “community
development financial institutions” (cdfis). In Italy the microcredit organization Permicro
has a specific status as Limited Liability Company.
In the UK community development financial institutions (CDFIs) are independent
organisations whose primary purpose is to provide finance, and related support, to
enterprises in disadvantaged communities. While some CDFIs specialise in microfinance
loans, the sector as a whole offers a wider range of products to address financial exclusion.
CDFIs are generally formed as either an Industrial and Provident Society or a company
limited by guarantee. If registered as an Industrial and Provident Society an alternative
corporate form is created which benefits from certain exemptions under the Financial
Services and Markets Act 2000 including being able to raise capital through issue of
redeemable shares (known as withdrawable share capital). In 2002 the trade organisation
Community Development Finance Association (CDFA) was set up on the recommendations
made by the Social Investment Task Force intended to create vibrant entrepreneurial
communities. While the CDFI sector was financially backed from 2000-2006 under the
Phoenix Fund, today there is a perception by Government and private investors that cdfis
should be financially sustainable, pushing them to gravitate towards the more profitable
market segment of SMEs rather than that of microenteprises.
In Belgium, some credit cooperatives are involved in microfinance and in Ireland, the UK,
Poland and Romania, credit unions provide a wide range of financial services including
savings and borrowing facilities and also insurance; however normally their focus is
exclusively or primarily on personal finance and not on lending to businesses.
Beside linkage banking and institutions with a specific legal status, promotional banks and
guarantee organisations represent a third type of microlending model in Western Europe,
i.e. in Belgium, Germany and Finland. In Germany the federal bank KfW Bankengruppe and
some regional promotional banks have microloan programmes; these are operated in
cooperation with local “house banks”, i.e. private credit institutions to which the borrower
has to go to apply for a loan. Promotional banks involved in microlending also exist in
Finland (Finnvera), in Belgium (Fonds de Participation) and in Lithuania ((INVEGA).
In Central European countries State-owned banks and the commercial banking sector play
a main role in microlending, but they tend to provide only a low volume of microcredits and
guarantees for microenterprises and focus on Small and Medium Sized Enterprises (SMEs)
rather than on microenterprises. This is the case in Slovakia for the State-owned SZRB bank,
in the Czech Republic for the Czech Moravian Guarantee and Development Bank and in
Hungary for the State Development Bank and the State Guarantee Agency in cooperation
with the Local Enterprise Agencies (LEAs). In Poland banks disburse microloans, but only to
mature microenterprises, and credit unions are primarily engaged in consumer lending. The
leading microfinance institution in Poland is Fundusz Mikro which acts as Limited Liability
Company. Some other non-bank providers exist, but the majority of them are serving small
numbers of clients due to lack of sufficient funding allowing them to grow.
13
In Poland Fundusz Mikro was founded in 1994 by the Polish-American Enterprise Fund and
was endowed with a capital of USD 20m. This money was extended gradually after certain
milestones which had been set in advance were achieved. During its initial phase Fundusz
Mikro experimented with several lending vehicles, inter alia credit unions, banks, post
offices, and direct lending and also with several differing loan products. Gradually, its
managers found out that direct lending had the highest potential and carried the least risk.
Two thirds of the loans are nowadays used for investments, while the rest is spent on
financing working capital. From its start until 2009, more than 116,611 loans have been
disbursed, and as of September 2009 the organization had more than 14,500 active clients.
This makes Fundusz Mikro by far the largest micro-lender in Poland.
In Eastern Europe microcredit is mainly provided by for-profit, non-bank financial
institutions (NBFIs) evolved from NGOs into banks, as well as by downscaling banks. Many of
the NBFIs were established from 1992 onwards with the support from international donor
organisations such as USAID or the Soros Foundation, and were built on the successful
models from developing countries. Many of these institutions are mature and provide
thousands of loans per year.
In Bulgaria microfinance involves a growing range of commercial banks and a wellestablished group of microfinance institutions (MFIs) that pioneered a variety of microcredit
products and built credibility for their target clientele. Mikrofond EAD is one of the MFIs that
specifically target vulnerable groups such as persons from rural areas and persons from the
Roma community. In Romania, 13 different NBFIs exist, out of which seven mature ones
established more than six years ago, initially with support from international microfinance
organizations13. Only recently, one of the largest Romanian microfinance providers, CAPA,
turned into a microfinance bank. An enabling legal framework, the Microfinance Companies
Law, is in place since 2005, reaching providers of almost a one-third of the financial services
granted to the economy. However, this legal framework demands very difficult obligations
for smaller microfinance institutions that serve particular at-risk groups which are more
difficult to reach.
In Eastern Europe there are also some examples of dedicated microfinance banks, such as
the ProCredit banks in Bulgaria and Romania which used the historic chance of the
undeveloped financial sector of these countries in the 1990s to start their operations.
4. Main challenges
Responding to the high potential demand from specific target groups requires developing
the sector further and increasing microlenders’ capacity. In Western Europe, where the
sector is relatively young, most programmes still operate on a small scale, despite recent
growth. Microfinance providers cannot cover their costs through their financial operations,
because government-imposed low-level interest rate caps impedes covering risk and loan
transaction costs with interest income; providing the much needed business support
13
Eurom Consultancy and studies- Benchmarking Romanian MF Sector 2007
14
services to their clients makes it even more difficult to become financially sustainable.
Increasing the sector’s outreach by scaling up would make it possible to serve larger
numbers of individuals and reduce marginal cost.
In Eastern EU countries such as Hungary, Bulgaria and Romania, where achieving operational
sustainability is a major goal, most organizations make secured loans, they ask for collateral.
For clients, the need to provide financial or in-kind guarantees may be difficult if not
impossible and may turn away potential borrowers. This appears to be an issue of particular
importance to disadvantaged entrepreneurs.
ESF funds can be a valuable source for scaling up the sector while ensuring that excluded
individuals remain its main target group. This can be achieved through:
 Pilot projects intended to test new products and services (financial, but also nonfinancial, i.e. business support, financial advice etc.)
 Promotion of networking and partnerships
 Capacity building
 Exchange of good practices, outreach and marketing
 Effective risk management and guarantee schemes
 Additional funding for loan capital and operating costs
5. Examples of EU funding for microfinance with a specific focus on ESF
5.1 Individual pilot actions
5.1.1 Adapting products and methods to clients’ needs
For microfinance providers, ESF projects provide valuable opportunities for testing products
and methods in view of adapting them to the specific needs of the client group. One
example is the project ‘Supporting Income Generating Activities among Ethnic Groups and
Communities’ run in 2002 by the biggest French microcredit provider Adie with the financial
support of EQUAL 1. The project targeted entrepreneurs in the informal sector mainly from
migrant backgrounds for whom the informal activity had become or was close to becoming
the main activity. 86% came from sub-Saharan Africa and three quarters were women with
about a third being illiterate. The project, run by Adie in cooperation with the national
employment agency ANPE and three other organizations, combined peer support and step
lending. The loans were made to peer groups of three people who took joint responsibility
for the loan. The lending started very small, but once a loan was repaid it could increase in
small steps up to €5,000. This was accompanied by a support package providing individual
and group training modules on financial capability, personal and business budget and
administrative issues.
15
The project has allowed Adie to develop an integrated support package involving individual
and group modules covering important subjects such as financial education, stock and cash
flow management etc. Moreover the association could gain the following valuable insights:
-
Microfinance can be an adapted tool to support the transition from informal to
formal work, especially for persons for whom the informal activity makes up more
than 80% of his/her activity.
-
Collaboration with local/community partners and word of mouth channels are the
best ways of effectively reaching out to the target group.
-
The peer group lending model turned out to be an adapted financing tool for this
specific target group, with very low default rates of only 2.6% per year (compared to
5.9% for Adie’s clients overall). And even if not all clients actually continue as
entrepreneurs, the peer groups facilitate reintegration into the labour market as they
allow the participants to build confidence and self-esteem in various aspects, such as
decision-making, dealing with banks as well as personal skills.
This experiment with women from Sub-Saharan Africa was in many ways similar to Adie’s
experience working with travellers (Roma). It revealed ways of improving Adie’s services and
contributed to the organisation’s reforms to make access to loans easier and services more
inclusive. These reforms have resulted in Adie supporting more people.
Related to service and product development is the establishment and reinforcement of
partnerships with private and public bodies. Such partnerships are another way of reaching
out to clients. Pilot projects can also be used for this purpose.
5.1.2 Establishing partnerships
Establishing partnerships and networking are essential elements for microfinance providers.
They are a way of increasing outreach to new clients, especially from specific target groups,
and of joining forces to provide adapted support and training to the new entrepreneurs.
From 2006-2007 the three European microfinance providers Adie (France), Integra (Slovakia)
and Aspire (UK) carried out a successful EQUAL 2 project called PROXY to test innovative
lending methodologies as well as non-financial services in cooperation with partners and
thereby increase the survival chances of microenterprises set up by their clients.
In France, Adie was aware of the fact that specific target groups, social welfare recipients,
Roma or migrants not only need credit, but also have difficulties in getting access to markets
and technology. In the frame of PROXY Adie test ten new services in cooperation with
private enterprises. It developed a computer training course and provision of low-cost
computers with the financial support of Microsoft, set up a hotline for legal advice with the
lawyers’ agency Linklaters, created market access for craftspeople receiving microcredit in
partnership with DIY shops Leroy-Merlin and provided free training for gas installers in
cooperation with Primagaz as well as access to the company’s network. Together with its
partners it also developed two training modules for supporting entrepreneurs through crisis.
The pilot project funded by EQUAL thus allowed the association to develop new support
tools and methods and to establish valuable long-term partnerships with private companies
which have proven to be a successful way of increasing the survival chances of the newly
created businesses.
16
But not only partnerships with private enterprises and public bodies are an important tool of
developing microcredit outreach. Beside such partnerships, networks of microfinance
providers and professional bodies are essential. They represent another important way of
developing microfinance at the national and European levels.
5.2 Capacity building
5.2.1 Setting up networks / professional bodies
Networks and professional bodies are important means of exchanging good practice,
capitalising on existing experience, raising awareness and bringing forward a common cause
as they can also act as pressure groups. At the European level the European Microfinance
Network (EMN) has received valuable funding from the Community Action Programme to
Combat Social Exclusion (2002-2006) for its operating costs since 2003. Since 2007 the new
EU employment and social solidarity programme PROGRESS financially supports EMN operating
costs as a key European Network. Today the EMN has 79 members in 23 European countries.
In Germany, in 2004 the European Social Fund helped establish the German Microfinance
Network (Deutsches Mikrofinanzinstititut DMI). Unemployed people account for just over
half of start-ups in Germany while access to finance for microenterprises becomes more and
more difficult. Since the end of the 1990s microfinance initiatives have sprung up at the
regional level in Germany with the financial and technical support of the Ministry of Labour,
Deutsche Bank Foundation and GLS Gemeinschaftsbank. However, many of these initiatives
remained extremely small (less than 100 loans per year) and showed great difficulty in
achieving sustainability. In 2004, under EQUAL, the DMI was set up as an umbrella
organisation to respond to this challenge. The DMI represents the interests of accredited
microfinance providers, improves their practice and facilitates their access to the German
Microfinance Fund, which has also been set up under EQUAL. It is a single federal fund for
microlending initiatives backed by EIF guarantees.
On the one hand professional microfinance bodies and networks constitute pressure groups
to bring forward the common cause. On the other hand they develop tools and methods
that can be used by their members and thus contribute to building capacity in the
microfinance sector. This is a key issue for the future of microfinance in the EU.
5.2.2 Developing staff training and manuals
With the help of ESF funding DMI developed an accreditation process for microlenders. This
includes trainings as well as a manual for staff from microfinance organizations. The
accreditation process consists of one introductory one-day training workshop on the
demands, preconditions and expectations of microlenders and three two-day workshops:
one on target groups, financial and market analysis; one on credit processing, monitoring
and reporting through tools and one on practical issues and experiences about financial
instruments and different forms of credit. The whole accreditation process costs € 7,000.
Furthermore different consultancy modules were developed to support the creation and
development of microlenders, e.g. modules on community banking, cooperation with banks
or selection of loan officers. Besides, the DMI manual provides an overview of microlending
17
in Germany and differences at regional level, explains the DMI model, good practice from
other European countries, the demand-side, sustainability and the DMI accreditation
process. From July 2005 up until November 2008, 13 microfinance providers went through
the accreditation process.
As shown through the DMI example, training and manuals need to be based on precise
studies to respond as effectively as possible to the needs of the sector. Several of the studies
in the field of microfinance were effectively supported by EU funds or produced in the frame
of EU funded projects.
5.2.3 Conducting studies and exchanging good practice
Studies and exchange of good practice allow microfinance providers to get closer to users’
needs and raise awareness methods and solutions that have been developed elsewhere.
Since its creation, microfinance providers have taken part in a range of transnational
programmes financially supported by EU funds. In the frame of these programmes, several
studies as well as good practice guides were drafted delivering valuable insights about the
demand and supply sides of microfinance in Europe. As such, in 2005, under the Community
Action Programme to Combat Social Exclusion the project Policy measures to promote the
use of microcredit for social inclusion, showed that microcredit might play a more important
role in the active inclusion of vulnerable groups of people if policies in the economic,
employment and social fields were retargeted accordingly. In 2006, the project From
exclusion to inclusion through micro-finance run jointly by three microfinance networks in
Europe - cdfa, MFC and EMN - aimed at addressing the lack of information exchange
between organizations working in the area of social and financial exclusion in the East and
West.
ESF also co-funded several transnational exchange projects a well as booklets on
microfinance and business support services. Under the EQUAL initiative “Barcelona
Emprende en Igualdad” (Barcelona starts up in equality) Barcelona Activa produced a Study
on Microenterprise Financing and Development (2007) presenting good practice in three
main fields: business financing, monitoring/support and administrative measures. And in the
frame of the transnational project PROXY run by Adie (France), Aspire (UK) and Integra
(Slovakia) the booklet Microfinance and Business Development Services in Europe - A Guide
on Good Practices (2007) presented selected good practices in the field of business support
services. Moreover in 2006 and 2007 the five microfinance and/or business support
organisations Evers&Jung (Germany), Adie (France), Facet/SEON (Netherlands), Fundación
Un Sol Mon (Spain) and Business Debtline Birmingham (UK) had the opportunity to run the
joint project Crisis Intervention Tools and Management of Change in Micro-Enterprises . It
reviewed and compared two sophisticated telephone based models of business support in
crisis to alternative models in other Member States and realised pilot projects for three
implementation partners.
Such capacity building is key for the future of microfinance in Europe. However, beside
highly needed training and mutual learning, the sector also needs funding to cover start up
and operating costs. Several examples exist for the use of EU and more specifically ESF funds
for operating costs and lending capital of microfinance providers.
18
5.3 Funding and guarantees
5.3.1 Funding for operating costs and loan capital
Funding of microfinance operations is a critical issue. Especially for those microfinance
organisations in Europe working with poor and disadvantaged target groups, it is improbable
that financial and operational sustainability will ever be reached. In France the organisation
France Initiative used the regional ERDF funds to finance the capital and running costs of its
integrated (and low interest) finance platforms all over France.
In the UK and Scotland several funds for lending to micro-enterprises, including particularly
fragile target groups could be set up through ESF and ERDF. For instance, Prince's Scottish
Youth Business Trust PSYBT used ERDF funds to finance its combined credit-and-grant
scheme to young entrepreneurs in need of inclusion. Equally, First Enterprise Business
Agency has received capital from ERDF to support its work with migrant and ethnic minority
entrepreneurs. In Finland, ERDF support is included in Finnvera’s investment and working
capital loans, entrepreneur loans, microloans, loans for women entrepreneurs and
environmental loans. In addition, Finnvera provides guarantees supported by the ERDF.
In Portugal ERDF and ESF funds were used to set up a micro-enterprise fund used by a
network of mainstream banks covering the country (RIME project, €20 mln). Created in
1995, the objective of the RIME programme was to develop local potential, create jobs and
fight against economic withdrawal. RIME provided subsidies on investments and job creation
as well as loans at subsidised interest rates to “microenterprises” (crafts, proximity services
and rural tourism), especially those created by young people in depopulated regions. 18,479
jobs were created between 1994 and 1999, 9,919 of them for women 14. However in some,
more difficult regions, i.e. in Lima Valley (Northern Region), the programme is reported to
having received only a small number of applicants. This is attributed to lacking local links,
complex bureaucratic procedures, low level of education of the potential beneficiaries, lack
of information about the programme and lack of assistance in submitting applications.
Furthermore, the LEADER II LAG competed with the programme in financing of rural
craftsmanship in this region15.
5.3.2 Provision of guarantees
Beside funding, guarantees are another form of necessary support for microfinance
providers. Microenterprises bear relatively high risks for finance providers, especially as they
do often not have sufficient guarantees to provide; guarantee schemes are a tool of risksharing. So far, several European microfinance providers, particularly the more mature ones,
have used the microcredit guarantee facility provided by the European Investment Fund
(EIF) under the Competitiveness and Innovation Framework Programme CIP “Microcredit
14
http://www.europarl.europa.eu/meetdocs/committees/rett/20010619/439210EN.pdf
INAISE, Financial Instruments of the Social Economy (FISE) in Europe and their impact on job creation, 1997
and M.N.O. Roca, Financial Instruments of the Social Economy (FISE) in Europe and their impact on job creation,
2000
15
19
window” and the predecessor programme MAP16. They were used by Adie in France, First
Step in Ireland, Nettwerkskreditt Norway and the Prince’s Trust in the UK to raise funding
from mainstream or ethical banks to increase the lending activities. The Spanish MicroBank,
KfW in Germany and Fonds de Participation in Belgium also used the MAP and CIP schemes.
Guarantee and capital schemes are very important for microfinance providers. Although
they have been used for microfinance, such schemes have generally been more oriented
towards SME development than microcredit. Investment vehicles, such as the ERDF-funded
recent JEREMIE initiative, tend to focus solely on SMEs. To improve the situation, the
JASMINE initiative was set up, combining funding and guarantees with technical assistance
for microfinance providers.
16
European Commission « Multiannual Programme for Enterprise » (MAP) 2001-2006
20
Partner profiles
Macroeconomic
Indicators
/ Year
Population,
total (in
thousand
GDP per
capita in
PPS*** (EU
27=100)
GDP
growth
(annual, %)
Employ
ment rate
%
Unemploy
ment rate
%
2007
2008
2009
BE
CZ
DE
LT
ES
BE
CZ
DE
LT
ES
BE
CZ
DE
LT
ES
1,058
10,287
82,315
3,385
44,475
10,667
10,381
82,218
3,366
45,283
10,755
10,468
82,002
3,35
45,828
118
80.3
115
59.5
105.4
114.6
80.4
116
61.2
103.9
na
na
na
na
na
2.8
6.1
2.5
8.9
3.7
1.1
3
1.3
3
1.2
(-)3.5
(-)2.7
(-)5.4
(-)11
(-)3.2
49.6
55.65
54.3
53.9
na
50
55.9
55.3
53.4
na
49.4*
55*
54.8*
50.4*
7.5
4.3
8.4
4.3
8.3
7
4.4
7.3
5.8
11.3
8**
6**
17.7**
13.1**
8.9**
Selfemployme
nt (*1000)
378.5
556.9
2252.6
143.3
2163.3
376.6
572.9
2239.4
115.5
2119.8
407.5*
579.8*
2290.8*
112.3*
1891**
Risk of
poverty
(age 18-64)
13
8
15
16
16
na
na
na
na
na
na
na
na
na
na
* Q1
**Q2
***PPS: Purchasing Power Standards
Source: Eurostat
Belgium
1 Access to finance: country background
1.1 Country background and context
The 2008 GDP per capita is € 28,800 in Belgium, above the level of € 25,100 in the EU. The
yearly evolution of the GDP is +1.1% in Belgium for +0.9% in the EU in 2008. The
unemployment rate is about 8.2% in Belgium and 8.9% in EU17. However, youth
unemployment is close to 18% at mid 200818. Significant regional disparities still exist in both
employment (64.9% in Flanders, 56.1% in Wallonia, and 54.8% in Brussels) and
unemployment (5.4% in Flanders, 12.1% in Wallonia, 15.9% in Brussels)19. The employment
of older people (50-64) has improved over the last five years from 26.3% in 2000 up to 31.8%
in 2005 but remains low and significantly below the EU average (42.5% in 2005).
17
18
19
http://en.wikipedia.org/wiki/Economy_of_the_European_Union
http://ecodata.mineco.fgov.be/mdf/ts_structur.jsp?table=AT0410092
http://www.european-microfinance.org/data/file/enap-29-jan-final.pdf
21
This increase mainly results from the 33.1% rise in female employment within this age group
over the last five years. The total female employment rate has increased since 2000 from
51.5% to 53.8% in 2005, while the male employment rate decreased slightly over the same
period (69.5% in 2000 compared to 68.3% in 2005).“Non-EU25” citizens, under-qualified and
handicapped people have an employment rate significantly lower than the global active
population.
The “at risk-of-poverty” rate was 15% in 2005, though with significant regional differences
(11% in Flanders, 18% in Wallonia and an estimated 27% in Brussels). Life expectancy at birth
(76.73 and 82.44 years for males and females respectively) is close to the EU average.
However, Belgium has a higher healthy life expectancy than the EU average both for males
(67.4 compared to 64.55 years) and for females (69.2 compared to 66.6 years). The fertility
rate of 1.727 is above the EU average (1.52). The old-age dependency ratio was 26.3 in 2005
and is expected to increase to 41.3 by 2030. Total gross social protection expenditure has
risen since 2000 and accounted for 29.3% of GDP in 2003. Pensions and health represent the
bulk (44.1% and 27.7% respectively) of social protection expenditure.
1.2 Legal and regulatory background for access to finance
The regulation differs for the different types of credit, consumption and investment. The
latter has no interest caps (no usury protection). Generally speaking, the Belgian legislation
is not particularly favourable for MFIs.
Savings collection is a strictly regulated activity. The so called “public call for savings” is very
demanding in terms of the communication and advertising leaflet issue, and is also rather
expensive. Therefore, it is not appropriate for small size MFIs. There is separate regulation
for cooperative companies: when labelled by the National cooperation supervisory office,
can access a simplified “public call for savings” procedure. The conditions are related to the
maximum amount to be collected (€ 2,500,000) and also to the effectiveness of advantages
dedicated to the members, but this last condition may create legal uncertainties. A second
legal advantage is related to the tax benefit available on dividend for members, when the
annual amount is lower than € 160. Beside this, there is no other fiscal incentive.
When the MFIs’ statutes are “not-for-profit” organisations, they can receive donation which
provide fiscal incentive for the donors (within determined limits).
2. Mapping of Access to finance
2.1 Available research on finance needs of particular target groups
The situation in Belgium shows some particularities that have been underlined by all
practitioners: The relative weakness of the self-employment status, in comparison with the
employee's one; the financial risk that any beneficiary of social or un-employed allowances
takes when he wants to become self-employed as the income from a new business is usually
not sufficient, during the first 6 or 12 months, to compensate the loss of social allowances
and this really is an important disincentive. The average size of micro-credit is high in
Belgium, because the operators have the aim to finance businesses large enough to become
22
the main activity and therefore the main income for the entrepreneur. This eliminates a
range of smaller microcredit that could be useful to develop part-time activities.
The acknowledged conclusion is that the demand for microfinance is not really satisfied so
far in Belgium. Recommended research reading includes:
 Le microcrédit en Belgique : naissance, état des lieux et futur, Réseau Financement
Alternatif, 2008.
 Fostering Gender Equality - Meeting the Entrepreneurship and Microfinance
Challenge: country report Belgium, Van Cauwenbergh Sarah , Watthy Jean-Pierre,
Fonds de Participation, Réseau Financement Alternatif, 2008
 L'Impact de la Microfinance en Belgique, le Cefip, Proximity Finance Foundation, le
Centre, 2007
 Banks and microfinance: for business or just for CSR?, Lierman F., Dexia Bank Belgium,
4th European Microfinance Conference 2007, Berlin, 2007
 L’entrepreneuriat immigré en Belgique: Etat des lieux et perspectives d’avenir, Fonds
de Participation, 2006
 Overview of the microcredit sector in Europe 2004-2005, Underwood Tamara,
European Microfinance Network, 2006
 Europe occidentale et reste du monde : parle-t-on des mêmes pratiques, Guichandut
P., Finance et bien commun, n°25, automne 2006
 Rapport d’activités / Annual report, Fonds de Participation, 2006
 L’entreprenariat immigré en Belgique – États des lieux et perspectives d’avenir,
Fonds de participation, 2006
 Transmission des PME Belges : le Financement – Rapport Intermédiaire, CeFiP Rapport d’activité, Crédal, 2006
2.2 Micro-entrepreneurship and access to finance as political priorities
Policy initiatives will soon be launched, that will have a positive impact: For instance, the
Flemish Government and Flemish social partners have taken the initiative of a new future
plan with objectives and actions for Flanders 2020: the Pact 2020. One of the 20 objectives
is: “In 2020, Flanders has to have a strong entrepreneurial culture and a significantly increase
in the number of firms in the Flemish Region. The target is to belong to top 5 European
regions on this particular indicator. Young enterprise starters are encouraged to complete
their curriculum thanks to training and education. Entrepreneurship among women,
immigrants and older people has to increase to a level commensurate with their presence in
society.”
There are already interesting initiatives: The private MFIs (Hefboom – Flemish speaking
community/ Credal – French speaking community), actors from the social economy sector,
couldn't implement their on-going micro-credit activities without the partnership with the
Participatie Fund (public body) and the support of a bank foundation.
23
In the case of Hefboom, the public body is the credit provider (thereby limiting the loan
default risk) and the bank foundation provides a grant (for operational costs) as well as
volunteers.
Self-employment and micro-enterprises are considered as an efficient way out of
unemployment. However, one of the main problems regarding the move from
unemployment to self-employment is the loss of income that the entrepreneur experiences
during the first period of his new activity. In Flanders, in each province, an
“Activiteitencoöperaties” has been implemented in which an entrepreneur can test his
business AND maintain his social allowances. This type of solution looks rather efficient, but
has a too small scale to impact the economy. So far, it is considered a pilot experience. The
remaining problem is, for these entrepreneurs, to access credit during this testing period,
because they are not registered as an independent entity, therefore they don't have access
to professional credit or microcredit. It is only after this testing period, when they live the
activiteitencoöperaties, that they can access the company register, managed at the national
level.
The large market share of the Participatie Fund microcredit, its efficiency and wellestablished procedures give very good results. It can be considered as an important
commitment from the public body to micro-enterprise support. Beside the Fund, private
cooperatives like Credal and Hefboom play a marginal role. This is due to a size effect. They
are both rather small entities, which do not access easily EU guarantee funds or private
funds, because investors do not have many incentives to invest in private cooperative.
This institutional structure of the microcredit market (supply side) does not mean that the
whole demand is met. Therefore, the support of private MFFs should allow them to develop
and offer other services (small amount for small business) in order to reach other part of the
public, generally dealing with more social or financial difficulties20.
2.3 Main microfinance players (national/local)
The supply of microcredit is very concentrated in Belgium. Almost 90% of the market is
represented by the « Solidarity loan » of the Participatie Fund that is also implemented by
Credal and Hefboom.
Credal offers some microcredits that are not operated by the Participatie Fund, and
therefore can offer other kinds of financial services. Brusoc, which operates in some parts of
the Brussels region, has also its own criteria, products and processes.
20
2009
Réseau Financement Alternatif, “Le microcrédit en Europe : un outil pour combattre la pauvreté ?”,
24
Participatie Fund
Belgium
Activity
Products
Solidarity loan
“Start” loan
Crédal
Brusoc
French community
Brussels Region
(Brussels & Walloon
(zone Objectif 2)
Regions)
Solidarity loan
Microcredit
Microcredit for the
cash flow
Hefboom
Flemish community
(Flanders and Brussels
Region)
Solidarity loan
The Fonds de participation offers three microcredit mechanisms:

Launching Loan, that comes with an optional professional support service

Young Independents Plan, a support programme to apply for the Launching Loan
aimed at young people –less than 30 year old– who have a business project

Solidarity Loan, intended to underprivileged people who start up an independent
activity
Crédal has one product and one programme that entirely match the microcredit definition
proposed in this study. That is MC2: microcredit, which targets people creating their activity
and the programme “Affaires de femmes, femmes d’affaires” (AFFA), launched in 2005,
which aims to better include women as independent workers.
All the credits are proposed in an ethical manner, with stable interest rates not directly
linked to the market nor to credit risk. Also, there is a pedagogical dimension and support
services all along the introductory part of the credit and often during the whole life of the
loan.
Brusoc aims to develop the social and local economy in the Brussels-Capital Region21. Brusoc
offers three credit products of which only one corresponds to the definition and scope of
this study. The first two, the “Fonds d’Amorçage” – Starters’ Fund - and the “Prêt
Subordonné” - Subordinate Loan - do not meet the definition exactly. The first because,
although it targets SMEs having trouble to get a mainstream bank credit, the amount of
grants can climb up to € 95,000, which is not considered a small amount, and the second, for
a similar reason as loans can be of up to € 75.000. Finally, the “Microcrédit” - Microcredit
product is targeted at people living in precarious conditions that would like to start or to
develop an independent activity.
Model of microcredit granting in Belgium22
In Belgium, MFIs have different legal status, operating modes and objectives, as previously
explained. Financial strategies, fund dispensers and beneficiaries vary according to the rules
of each microcredit institution. The same goes for granting conditions, granted amounts and
interest rates, which are detailed below.
21http://www.srib.be/index.php?option=com_filiale&idFiliale=5&Itemid=1&lang=fr, (31/07/2007)
22
The Microcredit sector in Belgium – National Report 2007 - RFA
25
Guarantees
Concerning microcredit, none of the main Belgian MFIs asks for an obligatory guarantee, for
the simple reason that it is, in most cases, too much of a constraint for the target audience.
However, Crédal lowers its interest rate (from 5% to 3%) if one or more people close to the
beneficiary guarantee(s) 50% of the obtained amount23. There are also two other
possibilities to reduce the interest rate; by bringing in cash 25% of the amount granted or by
subscribing cooperative shares for 20% of the amount obtained. Indeed, it is only since
October 2006 that Crédal has decided to cancel the compulsory condition that stated that
“one or more people close to the beneficiary must guarantee 50% of the obtained
amount”.24
Interest rates
The interest rates proposed by the MFIs range from 3 to 8% (8% occurring only in one case),
most of them being at 3 or 4%. Although there are no laws limiting the interest rates for selfemployment and SME microcredits, as the usury law in Belgium that limits the interest rate
only for consumption credit25. It is interesting to note that some people, generally because
of their religious beliefs, refuse to borrow money which they will need to reimburse with
interest rates26.
Support services
Support services are another essential aspect of the way MFIs operate. There are two types
of support services: before and after the microcredit is granted. As mentioned on their
annual report, Brusoc provides pre- and post microcredit granting support services “all
requests have personalised support services in order to ensure sustainability of the
developed activities.”27 In the same vein, Crédal includes in its preliminary interviews time to
review the case with the candidate. Whether the microcredit is granted or not in the end,
the support services are equally free of charge, and in the case of disbursement run all along
the reimbursement period. However, if the microcredit is granted, but the candidate finally
renounces to the launching of his/her activity, he/she must pay administrative costs which
amount to € 12528. Finally, the Fonds de Participation also provides support to interested
candidates to present the microcredit request. However, they do so indirectly. Indeed,
contrary to Crédal and Brusoc which have in-house support structures, the Fonds de
Participation subcontracts these support services with different support structures. This way,
as mentioned on their website, their “products are accessible all over Belgium” 29. It is
interesting to note that the Fonds de participation and all its partner support structures are
bound by a formal agreement. When a support structure brings a new candidate to the
23
http://www.credal.be/credal/p43_entrepreneur.html, (14/08/2007)
24
Proximity Finance Foundation, L’impact de la microfinance en Belgique, Partnership with the CeFiP,
SME Financing Knowledge Center, with the King Baudouin Foundation, 2007, p.14
25
http://mineco.fgov.be/protection_consumer/Credit/credit_fr_001.htm, (14/08/2007)
26
Proximity Finance Foundation, L’impact de la microfinance en Belgique, Partnership with the CeFiP,
SME Financing Knowledge Center, with the King Baudouin Foundation, 2007, p.74
27
http://www.srib.be/index.php?option=com_docman&Itemid=43&task=view_category&catid=33&ord
er=dmdate_published&ascdesc=DESC&lang=fr, p.98, (27/08/2007)
28
www.credal.be/pdf/mc2/me-partenaires.doc, (27/08/2007)
29
http://www.fonds.org/eCache/DEF/749.bGlkPUZS.html, (27/08/2007)
26
Fonds de Participation, it receives a small amount, which increases when the microcredit is
granted to the candidate, in order to cover the support services costs.
3. Use of ESF in promoting access to finance
3.1 ESF policy priorities
The ESF policy priorities for Belgium can be found in the National Action Plan on Social
Inclusion. EMN analysed most European countries’ 2008-2010 NAPs to find whether there
were any priorities relating to financial inclusion at large, including microcredit. Here are the
findings in this field30:
The priority objectives of the 2008-2010 NAP are the same as in the previous NAP, with the
same holistic understanding of social issues and the concentration of efforts on a few
strategic points. There is no mention of financial inclusion as such, or of microfinance
institutions. Loans or credit are indicated as tools for access to housing ownership (2-4-1-2
Encouraging access to ownership, p. 23) and energy saving improvements (2-4-1-6 Energy
policy and the cost of utilities, p. 24). Over-indebtedness is dealt with as a cause of child
poverty (2-4-3-1 Purchasing power of families, p.27) questioning the present legal
framework, stating the need to finance the 2003 Fund for treating over-indebtedness
sustainably and to reinforce preventive instruments. There is also mention of debt mediation
as a preventive tool for over indebtedness (2-4-2-4 income, p.25). Social economy projects
are quoted as good supports for energy consumption reduction (2-4-1-6 Energy policy and
the cost of utilities, p. 24).
Microfinance is no declared priority. No institutions are quoted, although Belgium has very
interesting examples, both in the public and private sector such as CREDAL and the Fonds de
Participation. No tools, such as microloans or public education for financial literacy are
quoted either. No change in that respect since the last NAP (2006-2008);
over-indebtedness’s presence is similar to what it was in previous reports, although
microcredits are no more quoted as preventive tools. Social economy was more central in
the last batch of reports. The 2008 NAP shows progress in that area, a fulfilment of the
actions planned in the 2006-2008 NAP: a Social Economy platform was set up; Social
Economy Business Centres are in the process of realisation. The evolution is not favourable,
microfinance losing ground in NAP representativeness.
3.2 Existing ESF projects on access to finance and their results
In Wallonia, the credit and savings cooperative Crédal set up specific ESF co-funded
programme called AFFA (Affaires de Femmes, Femmes d’Affaire) in 2005 because it believed
it was not fully reaching its target group since very few women applied for microloans in its
main microloan programme MC2. The pilot project targets women who are un-employed or
living on social benefits who would like to start a small business. It provides all in all 230
30
European National Action Plans for Social Inclusion (2008-2010) – EMN May 2009, p.14
27
hours of training and support over three months. Beside training, participants develop
support circles of 3 to 5 women (‘cercles de travail’) with the purpose to help one another in
the development of the business plans and to continue to assist one another after the
launch of the business. They may also access a low-interest microloan up to €10,000 on an
individual basis (i.e. not based on the peer group) for which no collateral or guarantees are
required. Crédal benefits for that purpose from over €200,000 on 2007-2013 ESF
programming. The programme is essentially aimed at training; The impact on access to
finance is still very difficult to identify, as we do not know how many of the 23 businesses
created in 2008 actually received microcredit.
There are no current projects in Flanders. However, support of entrepreneurship and selfemployment was a priority in the period 2000-2006 for the ESF- agency of Flanders. In
OBJECTIVE 3 ‘the adjustment and modernisation of the policy and systems in the field of
education’, there was a priority exclusively aimed on entrepreneurship. In priority 5 Gender
equality and priority 6 supportive studies, experiments and pilot projects there were also
some projects that supported entrepreneurship. There were also actions that focused on the
support of entrepreneurship in OBJECTIVE 2 ‘the economical and social reconversion of
areas in difficulties’ and the EQUAL-program. In general ESF wanted to improve
entrepreneurial culture, the image of entrepreneurs, entrepreneurial education, and
mediation towards entrepreneurship. In the period 2007-2013 ESF doesn’t have a priority
that is exclusively aimed at entrepreneurship31. In priority 1 “activation of talents and
sustainable integration of job-seekers in the labour market” there are a couple of projects
that support job-seekers that want to become entrepreneurs.
The goals of mentioned ESF projects have an indirect influence on access to finance for
target groups. For example by funding projects to enhance entrepreneurial education target
groups would have a bigger base of knowledge concerning access to finance.
3.3 Selected good practice
There is not enough scale in any ESF microfinance-related project to be used as the basis for
good practice, therefore we prefer not to draw any conclusions that could distort the overall
European analysis, as some other countries do have analysed good practice.
4. Lessons learned and policy recommendations
The survey 2008 of the Knowledge Centre for SME Financing (www.cefip.be) shows that
micro-enterprises (≤ 2 million € turnover and number of employees < 10) have more
problems in attracting bank finance than SMEs. The proportion of respondents with many
great problems is two times higher in micro-enterprises (13.9%) than in SMEs (6.7%). More
micro-enterprises are refused a bank loan than SMEs (10.1% and 4.7%). The most common
reasons for refusal are insufficient guarantees (44.4%) and too little equity (36.1%), followed
by inadequate reimbursement capacity (30.6%).
31
In Flanders.
28
The general target group is the one mostly defined by the requirements to access
microcredit from the Participatie Fund. Hefboom, the Flemish practitioner, is implementing
the “Solidarity loan”. The general criteria is not having access to mainstream credit,
therefore, the requirements are very limited and the access rather large, on principle.
Another important requirement is that the microcredit has to be offered for a business that
will become the main / the only income for the entrepreneur. This model has an impact on
the size of the credit (high) and, then, on the public and the type of business that can fit
these constraints. The Belgian model can be considered to be appropriate to meet the
demand of entrepreneurs not satisfied by the bank supply, but is less oriented to the social
inclusion dimension, developed by institutions like ADIE in France. Only some microcredit
proposed by Credal can play this role.
One particular problem is the lack of flexibility/incentive that exist for people receiving social
or unemployment allowances and who want to become self-employed, because this decision
implies a significant cut in their incomes. Only the “Activiteitencoöperaties” allow keeping
the social allowances when testing and creating a business, but so far, despite the existing
structures (one per province), it seems to stay in a “pilot project” size rather than a real
official / advertised offer.
MFIs do need to develop specific solutions at three levels of their business plan:
Funds to be used for credit:
The main source of funds is coming from the Participatie Fund (public), and from private
investors for the MFI with cooperative statutes. Any policy that can support private investors
to invest in such structure is therefore favourable for their own development, as well as the
access for them to simplified procedures to reach the saving of the public.
Guarantee mechanism:
The public authority should reinforce the guarantee mechanisms that are available for MFIs,
improve the procedure to reach a simple access and use and define clear criteria (see above
– details on guarantee funds).
Coverage of the operating costs:
Beside the Participatie Fund, Hefboom and Credal develop their microcredit programmes
thanks to the support of a bank foundation, covering a significant part of the operating costs.
So far, this foundation seems to assess positively its commitment in these two projects, but
the risk for the MFIs is high because the income is mainly concentrated in one source. This
means a very high dependency to their “silent” partner and a limited view on the future.
A more mixed financing base would be a significant added value. Indeed, as it has been
already said, the range of products (size, duration) could be enlarged in order to target other
entrepreneurs, other types of business that cannot be proposed in the current financing
frame. In order to reach other market segment, the MFIs need to develop other products
beside the “solidarity loan” and they need other means to do so.
29
Czech Republic
1. Access to finance: country background
Since 2004 Czech Republic is a member of the European Union and is one of the fastest
growing markets in the region. GDP per capita is currently approximately 76% of the EU
average. The GDP has shown a steep growth every year reaching the 6.1% value in 2007. The
Czech Republic has not been immune from the global economic downturn; however
evidence today suggests that it has weathered the current economic storms better than the
rest of Europe. In 2008 GDP growth has fallen, but it is still well above the EU average.
Between 1993 and 2007 the Czech Economy as a whole underwent significant structural
changes; generally, a decrease in the proportion of agriculture and industry decreased to
that of the service sector which makes up about 60% of the economy. The market consists of
various enterprises from the smallest ones to large international holding companies.
Microenterprises have a significant share in the market. Based on estimates,
microenterprises in Czech Republic represent roughly 75-80% of the total number of around
one million SMEs. The estimated contribution of this segment to the growth of employment
is 75% over the last five years.
Levels of unemployment have eased in recent years, but long term unemployment is still
high. Unemployed and other economically inactive people, households with children as well
as single parent families show an increased level of poverty. The biggest source of social
exclusion is an increasing unemployment rate among school leavers and young people in
general. Moreover, certain socially excluded groups like the Roma suffer disproportionately
from unemployment with estimates as high as 70% for this group whose number is
estimated at around 160,000 to 200,000 people. Regional disparities in unemployment are a
significant problem, caused by structural problems and low worker mobility. The situation is
difficult in the North-West and Moravia-Silesia regions, whereas unemployment is lowest in
the Prague region.
The banking sector has been completely privatised and is now predominantly foreign owned.
There are 37 banks with 22 bank branches operating nationwide and 15 banks only
performing activities as branches of foreign banks. Despite the sector’s relative advanced
state, enterprise lending remains sluggish and is far behind growth in consumer credit and
mortgage lending. While lending to smaller enterprises has improved, there is still evidence
that small firms lack access to bank loans. No bank publishes details of its lending operations
in deprived areas.
30
In Czech Republic microenterprises are not defined as a separate component of the
entrepreneurial environment by any kind of legislation. The Czech business regulation in
general and especially starting a business, paying taxes and closing a business, is a complex
process by European standards32, but has been simplified in recent years. As such licensing
has been facilitated and can now be operated online.
Non-banks can engage in lending money. However it is quite difficult and costly to establish
a company that would be able to receive savings or accept money. Most companies involved
in lending to existing microbusiness, are registered as joint stock companies with the
minimum required amount of starting capital of app. €36,000 with the exception of banks
which in order to receive a banking license have to accumulate a min. of €18million.
There is no usury rate in Czech Republic. The civil code prohibits disproportionately high
rates of interest but law does not fix the height of the interest rate.
Relatively little research on finance needs of disadvantaged entrepreneurs in Czech Republic
is reported to exist. The study “Vývoj nových metod přístupu k finančním zdrojům pro
podnikatelky” (Study on access to finance for disadvantaged entrepreneurs), produced
under EQUAL in June 2008 gives an overview of the barriers and needs of individual target
groups who would like to set up a business and presets an overview of loan products below
€25,000 for small existing enterprises from commercial banks. Another EQUAL study was
carried out by the Centre for Entrepreneurship Research. “A Comparative Study of Financial
Supports for Entrepreneurs in the Czech Republic, Ireland and Spain” compares supply to
bank finance, microfinance and grants for target groups in these three countries. It reports
particular difficulties for the unemployed, women, emigrants, ethnic entrepreneurs, the
travelling community and other minority or disadvantaged groups to access finance for
starting or developing a microenterprise.
Finally the study “Srovnávací analýzy modelů sociální ekonomiky v EU a možnosti jejich
aplikace v ČR v rámci programového období ESF 2007 – 2013” provides a comparative
analysis of Social Economy Models in the EU and possibilities for their application in the
Czech Republic during ESF Programme Period 2007 – 2013.
32
http://www.doingbusiness.org/EconomyRankings/?regionid=5
31
At least three Ministries need to be involved when talking about access to finance for
disadvantaged entrepreneurs: the Ministry of Labour and Social Affairs; the Ministry of the
Interior which has taken over the issue of immigration including migrant entrepreneurs; and
the Ministry of Industry and Trade.
Moreover the Ministry of Education can play a role in promoting entrepreneurship
education and training as well as financial education. As such in school (secondary and
vocational schools) subjects like entrepreneurial skills, small business entrepreneurship and
management are being taught and recently entrepreneurship awards have been created.
Finally the Ministry for Regional Development is in charge of economic growth on regional
level.
While there has been interest from the Ministry of Industry and Trade in the financing and
support of SMEs, there does not seem to be a specific policy to promote self-employment, in
particular with regard to socially excluded individuals. The priorities of the government here
include initiatives to find solutions for the growing unemployment, the decline of activities
of large and medium companies and the need for working capital in these companies. The
tendency to focus on large companies has increased in the context of the crisis.
Self-employment seems not to be sufficiently recognized as a way out of unemployment by
public policy. Formerly, a three months bridging contribution existed that helped selfemployed persons who went through a crisis or wanted to set up a new business out of
unemployment; however this programme was suspended. Now, only few grant schemes
exist that can be used for helping registered unemployed move into self-employment. They
are implemented on the regional level by the local labour offices. As such there are grants
for creating “socially beneficial jobs”. These are subsidies that make it cheaper for an
employer to create a new workplace. This grant may also be used for creating one’s own job.
The scheme is funded partly by ESF and partly by the State budget. Another grant, called
“sheltered workplace”, is targeting specifically disabled individuals. Finally a contribution
exists for persons who would like to “switch business”.
However, as these schemes are implemented on the local level, data on actual uptake of the
programmes is hard to access. It seems though that the amount of these grants is usually too
low for being used to set up one’s own business. Moreover, the Ministry of Labour and
Social Affairs which gives non-binding recommendations to the local labour offices, currently
recommends labour offices to focus on re-qualification and adaptability of workers of large
companies rather than on self-employment.
The business registration process in Czech Republic has been simplified in recent years, but
remains relatively copmplex compared to other European countries. However, business
support is reported to be costly and difficult to access for specific target groups. A network
of private, government-supported business support services existed before, but has been
dissolute by the government. At the moment beside the Chambers of Commerce, only feebased, relatively expensive business advice and consulting services for SMEs are available.
32
2.3 Main MF players (national/local)
There are no institutions on the Czech financial market that would dedicate their activities
purely to the segment of microenterprises. Banks dominate the market followed by leasing
companies and other sorts of financial institution such as consumer loan companies, building
societies, mortgage loan institutions etc. Since the year 2000 banks show interest in
financing SMEs thanks to various support programmes from EBRD and EIB and investment
by the Czech government.
Financial institutions don’t exclude the microenterprise market segment from their SME
lending operation if they fulfil the standard required criteria. Generally banks have been
known to extend credit as low as €1,000, but not for start-ups or companies with history of
one year and less. Financing of microenterprises, start-ups and new projects seems too risky
for commercial banks. Non-bank intermediaries such as leasing companies or consumer
finance companies also do not use the term microfinance, neither keep separate track of this
market segment. There is evidence that consumer loans are used for business purposes.
The Czech development bank CMZBR (Czech and Moravian Guarantee and Development
Bank) has run and continues to run several financial schemes on behalf of Ministry of
Industry and Trade, the Ministry for Regional Development and the EU. In cooperation with
commercial banks, it currently mainly provides guarantees which can be accessed by startups, as well as working capital for existing businesses. However, these programmes mainly
target well-performing SMEs and greenfield companies that have been rejected by the
commercial banks owing to risk factors and/or missing collateral or guarantees. CMZBR does
not define the microenterprise segment as such.
Currently, start ups are not a priority for the development bank. From 2000-06 an ERDF
funded programme called START provided subordinated interest-free loans with a maximum
period of six years and a maximum amount of 500,000 Kč (about €2,000,000). With an
average loan amount of €15,000 it focused on one-man businesses. The risk and loan
management design of the programme however resulted in high default rates. Under the
new ERDF funding period (Innovation & Entrepreneurship), the START programme was readjusted and reissued in July 2007, for a new target group (employees intending to change
their career), and with new loan terms: higher loan amounts (up to 1.5 million Kč; average:
25,000€) and guarantees for banking loans combined with a subsidy of 15% of the loan
amount. End of 2008, the programme was finished. START shall be re-issued by October
2009, however with an exclusive focus on industry sectors such as metallurgy.
CMZBR provides finance, but no business support, which is however crucial to the survival of
new enterprises. CMZBR cooperates with the Czech Chamber of Commerce and some
administrative agencies which do provide some gratis information and support; beside
these, commercial consultancy organizations provide support on a fees-based basis. At this
point in time it seems very difficult for microentrepreneurs from disadvantaged target
groups to access business support which is too expensive for them when provided by private
consultancies.
33
3. Use of ESF funds in promoting access to finance
The 2008-10 Czech National Action Plans for Social Inclusion and Social Protection (NAPs)
aim at tackling three major societal issues: social Inclusion, pension reform and healthcare /
long term care reform. Regarding social inclusion, the NAP priorities are: 1) social and labour
market inclusion of specific target groups33 through skills training and education; 2) access to
proper social support services and 3) strengthened cooperation on these issues among all
levels of public administration. Although over-indebtedness is highlighted as a growing social
problem and factor of exclusion at the beginning of the document, microfinance or debt and
money advice are not mentioned in the NAPs; neither are microenterprises nor selfemployment. Only once, under priority objective 3 (public administration), the text makes
reference to supporting the “social economy and socially oriented entrepreneurship at the
local level” through ensuring “the accessibility of training on the methods and principles of
social economy *…+, meaning primarily, employing disadvantaged individuals or ensuring the
accessibility of public services for disadvantaged individuals.” (p.28)
The Czech Republic runs three ESF operational programmes (OP): two thematic ones - on
education (“Education for competitiveness”) and on employment (“Human Resources and
Employment”) - and a regional one targeted at Prague (“Adaptability”). The “Human
Resources and Employment” Operational Programme consists of five strands:
1)
2)
3)
4)
5)
Adaptability
Active labour market policies
Social Integration and Equal Opportunities
Modernization of public administration
Transnational cooperation
Access to finance for disadvantaged entrepreneurs” can be situated in the “Social
Integration and Equal Opportunities” strand which aims at social and labour market
integration of excluded communities such as Roma and of persons who are the farthest from
the labour market such as severely handicapped individuals. It also targets equal
opportunities, such as supporting employment or entrepreneurship for women. The “Active
labour market policies” strand which aims at improving employment services can also play a
role in access to finance as far as financial support and the welfare bridge as well as the
promotion of entrepreneurship by the local labour offices are concerned. Finally, although
“Adaptablity” mainly concerns further education, re-qualification and training for
employees, support for entrepreneurship may be located here.
The Prague OP aims at developing a knowledge-based economy, a more accessible labour
market, and welcoming previously excluded groups into the workforce.
33
“the long-term unemployed, individuals with disabilities, seniors, individuals coming from a different sociocultural environment, children and youth, foreigners, victims of crimes and victims of domestic violence,
homeless individuals (individuals who do not have a home or those at risk of homelessness, i.e. people with
uncertain or temporary housing and people with unsuitable housing), repeat offenders – persons who have
committed a crime”
34
The Ministry of Labour runs training sessions as well as seminars to raise awareness of ESF
calls for proposals and provides information on its website, on which it also installed an
email alert for calls for proposals.
Under EQUAL several projects have been carried out in the field of entrepreneurship for
disadvantaged groups with a special strand for financial issues. Ass such the TASE
Transnational Partnership led by the Centre for Entrepreneurship Research in Ireland
involved partners in Ireland, Spain and Czech Republic. The project produced a set of
practical materials as methodological guides for advisors and training materials as well as a
final study on financial support for entrepreneurs. Moreover, the following other projects
were carried out about business creation in rural and urban areas:
 Rekvalifikační a informační centrum, s.r.o.
 Jihočeská hospodářská komora
 DC VISION, s.r.o.
 Moravská asociace podnikatelek a manažerek
 Sdružení CEPAC – MORAVA
 Asociace podnikatelek a manažerek ČR, o.s.
 Svaz českých a moravských výrobních družstev
 Centrum pro komunitní práci západní Čechy
 CONEO, s.r.o.
 Rekvalifikační a informační centrum, s.r.o.
 EDUKOL vzdëlávací a poradenské sdružení s.r.o.
 AG SYNERKO, s.r.o.
Another interesting project is run by GLE Prague since December 2008. It is a 28 months
project that promotes entrepreneurship as a way out of exclusion. It is funded partly by ESF,
under the Prague Operational Programme (Adaptability), and partly by the Prague region.
GLE Prague was set up as a pilot project by GLE London (Greater London Enterprise) in the
frame of the Interreg IIIC funded European Learning Network LNet, with the aim to put into
practice lessons learned between the five LNet partner cities (London, Prague, Hamburg,
Milano and Amsterdam) in the frame of entrepreneurship support.
GLE Prague has a double mission: to support excluded individuals who would like to set up a
business and to promote entrepreneurship for disadvantaged persons. Since its creation GLE
Prague has carried out evaluations of projects funded by DG Employment & Social Affairs.
The ESF funding allows GLE Prague to continue its entrepreneurship support programme with a specific focus on women and migrants who live in the Czech capital since at least half
a year.
35
The programme’s core business is business support for women with children under the age
of 15 and migrants, mainly from the former Soviet Republic, Moldavia, Ukraine and
Afghanistan. GLE works in cooperation with other organizations such as the Centre for the
integration of foreigners, which partly transfer their clients to GLE. As of September 2009
GLE had supported 46 clients in this project. Main business sectors are: restaurant, trade,
production and tourism.
GLE clients report that despite recent improvements in the process of becoming selfemployment, it is very difficult to find proper information on the different forms of tax to be
paid once the business is established. The organisation therefore provides training and
advice on registering/formalising and running a business such as business plan elaboration
and legal and tax issues. It also provides advice and help regarding access to finance as GLE
clients report stark problems in accessing finance outside their family network, due to
relatively complicated application procedures, i.e. in the case of the “global grant”, and
limited time of consultation. GLE also seeks cooperation with financial institutions and
business angels.
In the new programming period 2007-13, the Czech Ministry of Labour and Social Affairs and
the Ministry of Industry and Trade have recently set up a programme intended to facilitate
access to finance, the “global grant” for social enterprises. It is an outcome of the thematic
transnational EQUAL network on social economy. The grant applies to new enterprises that
employ at least 30% of their staff from specific target groups or provide 50% of their services
for target groups. The grant can also be used for self-employment of individuals that are part
of a target group. It is available nationwide, except in Prague. The minimum amount of the
grant is 100,000 Kč (€4,000) and the maximum, according to de minimis rules, is € 200,000.
The programme is innovative in its design as it based on close cooperation between two
different Ministries. It is financed with approximately €11 million under ESF - Priority
Objective 3 “Social Integration and Equal Opportunities” - regarding the employment and
training part and with €13 million under ERDF as part of the Integrated Operational
Programme (Area of Intervention 3.1) regarding the investment part. Application for
receiving the grant can be handed by answering the open call for tenders launched in May
2009. The overall application consists of a business plan, a commitment to the principles of
social economy, as well as two sub-applications, one for ESF and one for ERDF. Technical
assistance for drafting the application can be provided by the Ministry of Labour and Social
Affairs. Every six months a selection committee takes place that chooses the projects that
are going to be funded. This committee is made up of representatives from the Ministry of
Labour and Social Affairs, the Ministry of Industry and Trade as well as representatives from
NGOs, such as GLE Prague. The first selection committee is going to take place November 1 st,
2009. So far, 20 applications were handed in at the Ministry of Labour and Social Affairs.
The programme is its beginning phase and seems not yet well known. Social economy is a
new subject in Czech Republic and it faces mistrust in society. For the moment the
programme primarily reaches out to people who already know about social economy.
36
Microenterprises, i.e. enterprises with less than 9 employees, are not defined as a separate
category in Czech Republic. There is therefore little to no data available on microenterprises
in the Czech Republic. It is necessary to conduct more research and relevant data for
development of microenterprises or self employment strategy.
At the moment there is a great lack of access to finance for new microenterprises and selfemployment in Czech Republic. While some State programmes used to existed, the great
majority of them has finished or was re-oriented towards larger business and business
sectors that do not correspond to microenterprises such as metallurgy and heavy industry.
Some commercial banks are reported to provide loans as small as €1,000, but they are
usually not accessible by new microenterprises and require guarantees. This is a great
barrier for disadvantaged individuals who often do not dispose of guarantees.
Overall it appears that Czech Republic suffers from both disincentives to move from benefits
to employment and a lack of programmes to help the transition to self-employment. For an
unemployed person it is a great risk to become an entrepreneur as he/she immediately loses
its unemployment benefits once the business established. A financial support scheme
allowing unemployed persons to continue receiving part of their benefits in the first months
of the business, when the business is not yet profitable, would allow the persons to test
their idea without risking to lose everything if the business fails. An additional grant scheme
helping individuals to finance the new business would be very helpful. This could be
combined with a microloan, thereby increasing the amount of capital available to set up the
new business.
Besides, a network of professional consultants to offer their advisory services to
microenterprises and self-employed persons for a reduced fee would be a necessary step
linked to microfinance. At the moment private consultancy services exist; they may be used
by microenterprises, but they charge high fees.
The newly established “global grant” for social enterprises is an innovative initiative that
shows how ESF and ERDF funds can be used to support entrepreneurship. However, at the
moment the application procedure is very demanding and complicated. At government level
the setting up of an information centre for business plan and application writing for the
global grant would be a helpful step to facilitate access to this support scheme. A specific
programme for microenterprises based on the design of the global grant, or in the form of a
loan, would be an important way of facilitating access to finance for microenterprises and
self-employed persons.
Moreover, a guarantee scheme for new microenterprises managed by the Czech Moravian
Guarantee and Development bank could be a very useful initiative to improve the necessary
access to finance for microenterprises. This would facilitate access of specific target groups
to loans from banks.
37
Germany
Although GDP growth has been below the OECD average during recent years, the GDP per
capita and the net real income per capita in Germany are still well above the OECD
average.34 The public support structure for enterprise development in Germany is
comparatively well developed. The physical infrastructure is among the best around the
world.35 The level of entrepreneurial culture in Germany is low compared to other countries.
In particular, the impact of risk avoidance behaviour on entrepreneurial activity is stronger
than in other European countries.36 Administrative burdens for conducting business activity
are traditionally high in Germany, although recent reform efforts have improved the
situation.37 Income support programs for self-employment out of (registered)
unemployment are in place and have led to high numbers of start-ups out of unemployment
in recent years. The access to external finance for start-ups in Germany has worsened rapidly
during recent years. In particular, micro- and small enterprises face greater difficulties
compared to medium-sized enterprises.38 A national microfinance sector is not well
developed yet.
The German Banking Act (Kreditwesengesetz: KWG) affects the access to finance and
especially microfinance in Germany considerably. Loan business and institutions, which
would conduct loan business, are regulated in the KWG. The supervision over the adherence
to the KWG is incumbent on the Federal Supervisory Office for financial services
(Bundesanstalt für Finanzdienstleistungen: BAFin). Institutions fall under the regulations of
the KWG, as soon as they would conduct banking transactions. Banking transactions are
among other things deposit taking, the disbursement of credits (loan business) and the
acceptance of guarantees (warranty business). In order to operate banking transactions in
the sense of the KWG, a bank license is needed. The BAFin issues this license only to
institutions, which fulfil certain legal requirements. The possession of a banking licence leads
to high costs and capital requirements. The conduct of banking business without a license
leads to the risk of fine and imprisonment.39
34
Cf. Sternberg et al. (2007), p.12.
Cf. Sternberg et al. (2007), p. 29.
36
Cf. European Commission (Ed.) (2005): Flash Eurobarometer No. 192 (Question 12).
37
Cf. Sternberg et al. (2007), pp. 22 – 24.
38
Cf. European Commission (Ed.) (2005): Flash Eurobarometer No. 174 (Question 14 and 4h).
39
Cf. Kritikos and Kneiding (2008), pp. 6.-9.
35
38
The only possibility for non-banks to facilitate loans for micro-enterprises is to co-operate
with banks. Other providers are public authorities where the legal status is somehow
unclear.
Interest rate levels are limited by a usury law that forbids charging more than double the
average interest rate in the sector (e.g. real estate, loans), or exceeding the average interest
rate in the sector by 12 percentage points or more. Still, this regulation would leave enough
freedom for German microfinance institutions (MFIs) to charge their loans on a financially
sustainable level. Overall, the legal framework for microfinance providers in Germany is very
restrictive, the bottleneck being the bank status regulation.40
2. Mapping of access to finance
In Germany, there is still an on-going debate concerning the question how large the demand
for microfinance actually is, and if so, whether an uncovered demand for microfinance
exists. However, no research on finance needs of particular target groups has been done so
far on a large scale. The literature gives only a vague indication of the potential size of the
microcredit demand and the access to finance of respective target groups. Retail business
owners, foreign small business owners, and persons with a loan history on the private
market rather than the bank market, i.e. business founders, start-ups and micro, small and
medium enterprises up to nine employees are identified as the potential or main target
groups of microfinance in Germany.41
For instance, Kritikos et al. (2006) find that around 17 % of all young entrepreneurs starting
their business in the past five years may demand microloans and represent a possible
defined target group in Germany.42 In terms of financing need, the study identified some
typical financing cases related to access of finance. First, there are micro enterprises or startups with very low or no initial investments and therefore no initial capital needs. Those
micro enterprises often request in their post start-up phase for external finance on short
notice in order to pre-finance tangible business orders or projects. Their access to bank loans
is difficult. Second, there are people, which have received loans from relatives or friends or
have experienced bad service quality or loan rejections by banks. Empirical evidence on
financing constraints shows that 40% of loan applicants experience rejections, in particular if
loans below 10,000 Euros are requested. Another study in Brandenburg comes to a similar
conclusion. It reveals that in the growth phase of young small and microenterprises there are
stronger financing needs, as in the start-up phase. Financing is mostly needed for working
capital and especially in depressed areas.43
40
Cf. Siewertsen et. al. (2005), p. 19.
Cf. Kritikos, et al. (2006), p. 3.
42
Cf. Kritikos et.al. (2006).
43
Cf. FIDES (2009), pp. 2 – 3 and Kruczek (2009), pp.1 – 2.
41
39
Studies of the Kreditanstalt für Wiederaufbau (KfW)44 reveal small enterprises up to 5
employees have still comparatively more finance difficulties than small and medium
enterprises.45 On the one hand, those smaller enterprises have a lower bargaining power
than larger enterprises due to limited financing diversification possibilities, and on the other
hand, the processing cost of a credit allowance and risk assessment for a small enterprise is
compared to the credit amount relatively high, which makes the credit by trend unprofitable
for banks and savings bank. On top, it is empirically proven that younger enterprises are
more affected by loan rejections than older enterprises.46 For start-ups, 12.5 % experienced
problems while meeting their financing demand through external finance. However, as only
the ones are covered, which did start a business despite those problems, the dimension of
financing problems tends to result in underestimation.47
More pleasant is the fact that microfinance providers take increasing account of the changed
or better known funding demands of micro-enterprises.48 People excluded from mainstream
financial services, i.e. those without access to formal financial services such as savings,
insurance, any type of loans and cash transmission banking, are the emphasized client base
of the European and as well German microfinance programmes, such as vulnerable groups
such as women, immigrants, ethnic minorities, the youth, the disabled and as well business
start-ups. There are a few microfinance players who particularly target one or more
vulnerable groups, but the majority of the German microlenders do not target a specific
clientele or particularly do not collect data or release information on such specific clientele
characteristics. 49
In conclusion, the still lacking access to external finance of potential microfinance target
groups such as business start ups, existing micro, small and medium enterprises and socially
marginalised groups proves a significantly larger microfinance market, as actually served by
the established microfinance institutions in Germany.
Access to finance for small and micro entrepreneurs is not a priority theme on the national
political agenda both in the old and new ESF funding period. Nevertheless, the national
government implemented initiatives, e.g. within EQUAL, covering to some degree the topic
of access to finance and microfinance in the previous period, but without an extensive
scope. There exist currently some efforts in the national government to initiate activities
concerning the promotion of microfinance and access to finance for small and micro
entrepreneurs. The same is true for the political agenda on the Federal State level.
Generally, both today and in the past the German Federal States have implemented more
programmes and initiatives supporting microfinance and access to finance for small and
44
KfW is Germany’s national promotional bank under the ownership of the Federal Republic (80 %) and the
Länder (federal states) (20 %). Its department KfW Mittelstandsbank brings together all KfW's offers for
business start-ups and small and medium-sized enterprises. The SME financing products are structured
according to the three pillars of loan, mezzanine and equity capital.
45
Cf. Reize (2007), p. 44.
46
Cf. Reize and Lo (2008), pp. 37-38.
47
Cf. Kohn and Spengler (2008), pp. 67 – 68.
48
Cf. Lahn and Bendig (2009).
49
40
micro entrepreneurs compared to the national government. However, so far it is not on the
top of the political agenda there either.
Self-employment and micro enterprises are more and more seen as an efficient way out of
unemployment. Further, there are incentives to move from employment to selfemployment, such as a special financing window for start-ups out of unemployment in the
coaching programme “Gründercoaching Deutschland”, which is promoted by allowances for
the payment of the coaches funded by the ESF. Therefore, access to employment may play a
key role for inclusion, but this is not commonly considered as an efficient tool out of
unemployment among policy makers. Nevertheless, start-up lending is relatively strong in
Germany. In the inclusion-lending sphere, a growing number of activities by local joint
ventures (ARGEs)50 have emerged during the last years and are still emerging.
In conclusion, there is a need to raise awareness of the microfinance issue and for its
vulnerable target groups (i.e. unemployed, migrants) among society, policy makers and so
on. Microfinance providers experience clearly a missing political commitment.
During the past decade, a growing interest in and practice of microlending has been seen in
Germany. The German microfinance sector can be characterised as an economically young
sector. Significant changes in terms of products and providing institutions is continuously
observable. Several microfinance programmes have entered the market, where others have
exited the market or changed their products and operations during the past years. Three
main institutional types of microfinance programmes can be identified due to the underlying
mission. First, there are several promotional banks with their microfinance programmes
focusing on microenterprise lending, which refers to bankables and nearly bankables as
target groups, namely traditional start-ups and small existing enterprises. Second, publictransfer bodies (governmental or semi-governmental), such as ARGEs, are active in the
inclusion lending sphere targeting financially and socially marginalised groups such as
migrants and long-term unemployed persons, the so called non-bankables. Finally, there are
several private providers in the market, which are mainly represented by business start-up
centres accredited by the Deutsches Mikrofinanz Institut (DMI: German Microfinance
Institute), offering as well inclusion lending.
The (on-lending) model of KfW and regional promotional banks
Public promotional banks foremost the KfW designed micro-loans products, which are onlend by commercial banks.51 In the core of these products the KfW provides credit lines,
guarantees up to 80 % of the loan and compensates the commercial banks for parts of their
processing costs.
50
In Germany, ARGEs (Arbeitsgemeinschaften) are the cooperation between the Federal Employment Agency
and local municipalities, which are in charge of social welfare services and handle about 80 % of the
unemployment population),
51
Until the end of 2007 the KfW offered its Mikrodarlehen programme up to 10,000 and 25,000, respectively,
which was recently merged into the more global programme “KfW Startgeld”. Due to political reasons the KfW
distributes their loans only through existing principle banks (Hausbankprinzip). As a result, most of the loan
applications of above potential clients do not even reach the KfW as the principle banks reject them before
41
Other regional promotional banks offer similar products with smaller volumes. Few regional
promotional banks directly grant microloans such as the Investitionsbank Schleswig-Holstein.
The public transfer model
There are several public municipal authorities and ARGEs, which operate programs in the
microlending sphere at local level. For instance, the city of Kassel has had a pioneering role
here since 1997. In total nearly 440 of such municipal authorities and ARGEs exist in
Germany and are possibly active in this field.
The opportunities offered to the ARGEs in this sphere are regulated under the Social Code
(SGB II). Due to § 16 Abs. 2 Satz 1 SGB II, the public municipal authorities and ARGEs can
provide the so-called “Sonstige weitere Leistungen” (SWL; other miscellaneous benefits),
which can be used openly for the integration in the working life of social benefits recipients
to reduce unemployment and the cost of welfare52. These measures include benefits such as
debt counselling, vocational training or grants for starting a business. Therefore, the public
municipal authorities and ARGEs are allowed to grant loans to mostly unemployed and social
welfare recipients as allowances or (repayable) grants to bypass the German banking law.
In 2007, those institutions provided 4,446 loans (and 31,204 allowances) to employable
persons in need of care to set up a micro enterprises based on § 16 Abs. 2 Satz 1 SGB II 53. In
2008, the number of grants provided increased by nearly 15% to 5,094 grants, whereas the
numbers of allowances slightly decreased (30,260)54. Remarkably, this indicates that these
institutions provide the second most micro credits in Germany after the KfW with its
program “KfW Startgeld”, which issued 5,399 micro credits in 2008.55
The DMI-model (business centre cooperation model
In Germany, there exist a lot of business start-up centres at local level. They are independent
private organisations dedicated to support nascent entrepreneurs. Public subsidies and fees
for services they provide to entrepreneurs finance them. Those services include
administrative support, business advice, support for loan applications, trainings and so on. In
the beginning of this decade those business centres got organized to propose microcredit to
their clients. In 2004, a few of them founded the DMI. The DMI established a federal
accreditation mechanism to set-up regional financial intermediaries that partner with banks
(especially the GLS-Bank) and a guarantee funds to provide microcredit. The organization to
provide microcredit in the context of the DMI is complex and involves a financial risk sharing
agreement between the regional business support centre as financial intermediary (20 %
first loss) and the guarantee fund (80 %) and an operational cooperation between the
financial intermediary and the bank to monitor the loans’ repayments and if necessary
enable interventions. Beside these institutions, there are several other institutions providing
successfully micro loans to respective target groups, e.g. “Göttinger Fonds für Örtliche
Beschäftigungsinitiativen“, “Starthilfefonds -Senatorin für AFGJS Bremen“ and the micro
52
The term „social benefits recipients“ refers here to unemployed but employable persons in need of care,
who receive “Arbeitslosengeld II” (social benefits).
53
Cf. Bundesagentur für Arbeit (2009): Statistik der Bundesagentur für Arbeit.
54
The numbers for 2008 are so far only based on preliminary, not extrapolated numbers. Cf. Statistik der
Bundesagentur für Arbeit, Arbeitsmarktpolitische Instrumente, March 2009.
55
Cf. KfW (2009), http://www.kfw.de/DE_Home/Die_Bank/Unser_Unternehmen/Zahlen_und_Fakten/KfWFoerderstatistik.pdf.
42
credit program of “Behörde für Wirtschaft und Arbeit“ in Hamburg, which are as well
emphasizing on inclusion lending.
3.1 ESF Policy priorities
Priority objectives of the National Strategy Report on Social Protection and Social Inclusion56
Considering inclusion, the main objectives are:

Increasing labour market participation through job integration programmes for
specific groups of persons such as long-term unemployed, unemployed seniors,
migrants, handicapped persons as well as specific regions;

Strengthening chances for education and training by breaking up the causal
relation between social origin and academic performance;

Strengthening of families and combating child poverty through better adapted
allowances for parents as well as childcare possibilities;

Integration of immigrants through stronger language acquisition and labour
market integration (“national integration plan”);
No reference is made to financial exclusion or microfinance at all. Over-indebtedness,
financial literacy, (micro)loans, social economy, business start-up financing or selfemployment are words never mentioned in the 2008-2010 NAP, although reducing
unemployment is one of the main concerns of the report. In the 2006-2008 NAP financial
exclusion was not mentioned either. In contrast, this had been – at least partially – the case
in the 2003-2005 reports where over-indebtedness had been cited, as well as business start
as a way of overcoming unemployment. A negative trend can thus be detected. This is
curious considering that one of the focal points for inclusion is access to employment. It
seems self employment is not seen as a tool in this regard. However, start-up lending is
relatively strong in Germany.
Compared to the last NAPs 2006-2008, the challenges and political priorities remain mainly
unchanged.
Priority objectives of the National Operational Program for the European Social Fund (ESF) in
the funding period 2007-201357
For each of the objectives convergence, and regional competitiveness and employment, the
National Operational Program emphasizes the following priorities (indicative weighting of
the priorities in respect to the ESF resources, % of total funding):
56
Cf. BMAS (2008): Strategic Report on Social Protection and Social Inclusion 2008-2010,
http://ec.europa.eu/employment_social/spsi/docs/social_inclusion/2008/nap/germany_de.pdf.
57
Cf. BMAS (2007): National Operational Program for the ESF in the funding period 2007-2013.
http://www.bmas.de/coremedia/generator/2954/property=pdf/operationelles__programm__des__bundes__f
uer__den__europaeischen__sozialfonds.pdf.
43

Increasing the adaptability of workers, firms, enterprises and entrepreneurs and
the promotion of the entrepreneurial spirit (36%)

Improving human capital (10%)

Improving access to employment and sustainability (43%)

Increasing technical support measures (4%)

Mobilisation of transnational activities (7%)
Financial exclusion or access to finance are not explicitly mentioned in the priorities or
objectives of the National Operational Program. No reference is made to over-indebtedness
or debt advice, financial literacy or capability, partnerships with banks or social economy.
However, business start-ups or self-employed are important target groups in the
Operational Program, especially for the promotion of an entrepreneurial spirit and the
access to employment. Thereby, the security and support of micro-lending is once briefly,
i.e. without giving any details, mentioned as a measure to promote entrepreneurial
activities. Further, the program suggests micro credits to activate and support regional and
local capabilities for social inclusion and the reduction of unemployment. Self-employment is
widely seen as a tool for inclusion, i.e. access to employment, whereas business start-up
financing is not particularly emphasized, but it is relatively strong in Germany. The German
Microfinance Fund is mentioned in the National Operational Program as a best practice
example of a project applied for and implemented by a wide range of organisations under
the ESF in Germany.
In the current ESF funding period 2007 - 2013, there exists no ESF programme on the
national level, which explicitly includes access to finance or microfinance components. The
national authorities currently endeavour and plan to implement initiatives concerning such
topics within the ongoing funding period. However, programmes focusing on selfemployment as a way out of unemployment are already established. For instance, since
October 2008 within the “Gründercoaching Deutschland” a business start-up or selfemployment is especially promoted with advisory services during the start-up process, which
is so far seen as an efficient and successful tool to move people from unemployment to
employment.
In the former ESF funding period 2000 – 2006, there was no ESF programme on the national
level, which only concentrated on access to finance for small and micro entrepreneurs. In
fact, for instance the programme EQUAL has included microfinance activities or
components, such as the setting up of the DMI has been promoted and financed under
EQUAL. There are several projects, which were funded in the period of 2000 - 2006 or are
currently funded in the ongoing funding period by national ESF, but especially Federal State
ESF funds. The following table provides an incomplete sample of possible good practice
examples among these projects. In a selection process, we identify one good practice
“Bürgschaftsgemeinschaft Hamburg – BG Start!” due to common good practice criteria,
which is described in further detail in the following section.
44
No. Title
1. Mikrokreditprogramm in
Sachsen
Description
Microloan program (up to 25,000 Euros) for
the promotion of business start-ups and selfemployment
2. BG-Start! Hamburg
BG Start! offers a guarantee combined with
post-loan business support
3. Investitionsbank Berlin
Financing and promotional offers for business
(IBB)
start-ups and new enterprises, including
simplified procedure for microloans of SME
Funds
4. ChaBaLEU-Projekt
Development and piloting of innovative
microfinance services and products that help
micro and small enterprises (MSE) access the
financial market
5. Crisis Intervention Tools Dissemination and further development of
and Management of
crisis intervention methods and tools
Change in Microspecifically for the target group of microEnterprises
enterprises
6. Deutsches Mikrofinanz
Service Provider for microlenders including
Institut
consulting and training, accreditation, etc.
7. Gründercoaching
Coaching of business start-ups and new
Deutschland
enterprises by qualified consultants
8. Mittelstandsförderinstitut Central service point for small, medium and
Hamburg
new enterprises from Hamburg to apply for
and use public funds
9. FIRMENHILFE
Free of charge telephone consulting service for
small businesses and free-lancers with regard
to organisation and questions about financing.
10. Pro-Ideenfonds
Seed capital for technologic innovations
11. Gründungswerkstatt
Web portal which accompanies start-ups free
Hamburg
of charge with information, tools and
consultancy
12. Starter-Center Hamburg Central service point for business start-ups and
(HWK Hamburg)
new enterprises
13. Unternehmer ohne
Support of migrants by starting a business and
Grenzen e.V.
securing existence as well as education and
qualification
14. Mikrokreditfonds
The
Federal
State
“MecklenburgMecklenburgVorpommern” provides microloans for
Vorpommern
business start-ups and new enterprises up to
20,000 Euros.
15. Verband Deutscher
Special interest group for business start-ups
Gründungsinitiativen
initiatives and for the promotion of micro and
(VDG)
small enterprises
Funding
ESF Federal
State Funds
ESF Federal
State Funds
ERDF
ESF, Article 6
ESF, Article 6
Equal
ESF National
Funds
ESF Federal
State Funds
ESF Federal
State Funds
ERDF
ESF Federal
State Funds
ESF Federal
State Funds
ESF Federal
State Funds
ESF Federal
State Funds
Equal
45
Bürgschaftsgemeinschaft Hamburg GmbH– BG Start!
Implementing organization
Implementing period/funding/budget
Guarantee institution founded by
actors of business development
services for SMEs in Hamburg
Since 2004/funding volume of the current
funding period is € 1,321,041
Objectives
Reduce financial exclusion by increasing the sustainability of start-up and young
businesses and improving access to finance for entrepreneurs who do not have security
acceptable to a mainstream bank
Context
Lending to start-ups and young businesses experienced a lacking sustainability of the
promoted entrepreneurs in Hamburg in the past, whereas business start-ups are highly
seen as important for a positive development of the economy. To prevent market
failure, i.e. in this case lacking access to finance for such target groups, the programme
BG Start! offers a guarantee for the loan to the commercial bank in combination with
accompanying business support for the entrepreneur. It was founded by an initiative,
which was orientated at national and international best practise examples, of different
institutions active in business development services for start-ups and existing SMEs in
Hamburg.
Target population
Start-up and small-scale entrepreneurs who are still in the first year of their business
(incl. purchasers of existing businesses).
Methods and activities
BG Start! offers a guarantee combined with post-loan business support. The guarantee is
offered to the commercial bank, which provides the entrepreneur with a loan. The
business support is offered to the entrepreneur during the first year, and includes:





An introductory workshop,
An initial meeting, called a status-check, held face to face with the coach, which
determines individual coaching needs and goals,
To-do lists, agreed at each intervention,
Where the guarantee is for less than €100,000, two-monthly reports by the
entrepreneur to the coach, followed by telephone discussions. Where the guarantee is
for over €100,000 (to a maximum of €1 million) reports and discussions are held monthly,
Advice from an experienced coach
46

Business controlling software.
The client contributes to the cost of the business support, paying €250 where the
guarantee is below €100,000, and €500 for larger loans. As well as helping to fund the
programme, this may also make clients more interested in using the service. The balance
of the cost is provided through co-financing from the European Social Fund (ESF). There is
a facility under which the borrowers can commence the support programme if they
borrow to enlarge their business significantly within three years, and so need a further
guarantee.
Results
183 start-up enterprises received a guarantee in 2004, which as well received the
corresponding bank loan, and 306 small, medium and micro entrepreneurs have been
assisted over the two years to the end of June 2006. In 2007, 185 start-up enterprises
received a guarantee via BG Start! In the current funding period the program targets to
support in total 400 start-ups, to provide advice to 700 persons and to reduce the rate of
failed start-ups under the program by 10 percent.
The objectives to reduce financial exclusion of start-up and small scale entrepreneurs by
increasing the sustainability of their business activities is highly achieved by the
implementing methodology and technique. Further, BG Start! demonstrates that making
business support the condition of a loan guarantee, i.e. the business support is obligatory
for the provision of the guarantee, is not only relevant for the target group, but as well an
efficient and effective way of reducing default rates. The coaching service has a
determining impact on the sustainability of the supported start-ups and small-scale
entrepreneurs, whereas requiring entrepreneurs to pay part of the cost of the coaching
service may increase their perception of its value. One constraint is identified during the
runtime of the program, i.e. high quality coaching to start-up and existing entrepreneurs
is constrained by a limited supply of good quality coaches.
The presented report on the “access to finance for all” implies a microfinance sector in
Germany that is changing steadily, slowly gaining in sustainability, specialising and rising in
terms of institutions providing microcredit to the respective target groups, but as well lacks
institutional capacity building and strong political commitment. Furthermore, the legal
framework is generally unfavourable for the majority of microlending institutions in
Germany and acts as a hindrance for the scale-up of the total sector and especially for the
access to finance for all.
The potential demand for microloans in Germany is still largely unknown. There is still
lacking access to external finance of potential microfinance target groups, which indicates on
the one hand a significantly larger microfinance market, as actually served by the institutions
acting in microfinance, and on the other hand that the access to finance for respective target
groups are highly limited. However there is an extensive scope for further research, to
measure and control the actual access limitations and the potential demand for
47
microfinance. The German microfinance sector can be characterised as an economically
young sector. Significant changes in terms of products and providing institutions are
continuously observable. Several microfinance programmes have entered the market, where
others have exited the market or changed their products and operations during the past
years. The established providers disbursed in total 4,625 microloans in 2007, but the number
of microloans disbursed decreased in 2007 compared to earlier surveys conducted from
2004 to 2006.58 However, it is important to note that Germany is still lacking a business
model, such as Adie in France, which offers microfinance and access to finance for all on a
large scale.
Access to finance for small and micro entrepreneurs is not a priority theme on the national
political agenda both in the old and new ESF funding period. In comparison, the German
Federal States have both today and in the past more programmes and initiatives supporting
microfinance and access to finance. However, there currently exist efforts in the national
government to initiate more activities concerning the promotion of microfinance and access
to finance for small and micro entrepreneurs, as self-employment and micro enterprises are
more and more seen as an efficient way out of unemployment. No reference is made to
financial exclusion or microfinance in the National Strategy Report on Social Protection and
Social Inclusion, although reducing unemployment is one of the main concerns of the report.
The same is generally true for the National Operational Program for the European Social
Funds (ESF) of the funding period 2007-2013, but the security and support of micro-lending
is explicitly mentioned as a measure to promote entrepreneurial activities. Self-employment
is widely seen in the program as a tool for inclusion, i.e. access to employment, whereas
business start-up financing is not particularly emphasized. Our selected good practice “BG
Start!” shows that policymakers may find that structural funds are helpful of a guaranteed
loan and want to consider the use of business support services as a condition of any
guarantee to increase the likelihood of guarantees being made available as well as to reduce
default rates. Such support may help to achieve national government objectives such as
social inclusion. However, it is highly needed to raise awareness of the access to finance for
all and microfinance including its vulnerable target groups (i.e. unemployed, migrants)
among society, policy makers and especially the national government. Microfinance
providers still experience a missing political support and commitment. Therefore, a national
microfinance strategy, which for instance has been implemented in the Netherlands59, is
needed in Germany to scale-up the microfinance market and to extend the access to finance
to all.
Institutional capacity building of MFIs is a key issue for the future of microfinance in
Germany and as well the EU.60 So far, the German microfinance market still misses
transparency. On the demand side, it is essential to improve transparency of the market by
clearer definitions, e.g. of microcredit, to clarify the exact market segment microfinance
would like to target. On the supply side, a culture of transparency and reporting is often
missing in non-bank MFIs in Germany.
58
In the Netherlands, after a comprehensive market study in 2005, a National Council of Microfinance was
established to make policy recommendations stressing the importance to promote and support local initiatives,
and develop both financial service delivery capacity, training and coaching models.
60
Cf. Jung et al. (2009).
59
48
This is connected to lack of awareness about the importance of this issue and a missing
transfer of social visions for microfinance into viable business approaches. Underdeveloped
systems for performance measurement and analysis of the MFIs are a clear bottleneck for
the rise and sustainability of microfinance. Therefore, it is highly acknowledged that clear
development objectives and targets need to be agreed upon by microfinance providers and
adjusted social and financial performance indicators need to be developed to measure them.
The benchmarks on the degree of (self-) sustainability have to be widely implemented and
individually adjusted in the MFIs according to the target group they are serving and to the
complexity of services they provide. Strong political support and commitment would help to
push the market in that direction.
Overall, it must be said that things are indeed moving in Germany, but not sufficiently.
Microlending is not the core business model for the majority of the institutions acting in
microfinance, but nevertheless there are signs of a dynamic development emerging.
Microfinance will only become significant if more players accept responsibility and really
look at the demands of micro-entrepreneurs and -enterprises, develop and implement lean
processes. The German microfinance sector still lacks funding possibilities. However, a rise in
the national political commitment and direct support by the government could help to bring
a breakthrough enabling the access to finance for all and scaling-up microfinance in the
forthcoming years.
49
Lithuania
Lithuania joined the European Union in 2004 and has since undergone profound structural
changes and experienced fast economic growth. The GDP growth rate was impressive in
recent years, reaching 8.9% in 2007 only to decline strongly as the crisis hit, to 3% in 2008.
The estimate for 2009 is a contraction of 10.5%, along the line of the other Baltic States, the
most affected EU region.
The crisis has hit Lithuania and the Baltic countries harder than most European countries.
The state budget has seen heavy cuts to allow for a stimulus plan; The unemployment rate
has skyrocketed, more than doubling from 5.8% in 2008 to 13.1% in Q2, 2009; The overall
salaries are likely to fall by the same proportion in 2009.
Lithuania is mostly now a service economy, with only 4.3 of the GDP coming from
agriculture, 32.8 form industry and 62.8 from the services sector. It has become easier to set
up and manage a business: a couple of indicators set to follow up on Lisbon Strategy
Implementation talk by themselves: the “burden for business” index has decreased by 10%
since 2007, and the “number of economic entities per 1,000 residents” has increased from
59 to 6061
The banking sector has been totally privatised and is more than 90% under foreign control,
mostly by Scandinavian banks. The reaction of the banking sector during the present crisis
has been to repatriate available funds to headquarters, creating an added liquidity crunch in
Lithuanian economy that has contributed to the aggravation of the economic crisis.
1.2 Legal and regulatory background
All financial institutions in Lithuania come under the supervision of the central bank, the
Bank of Lithuania. The individual Credit Unions and the Central Credit Union come under the
same set of rules but with different conditions, in particular regarding minimum capital,
which is lower, and capital adequacy ratio, which is higher.
There is some leeway for credit-only companies, as long as there is no deposit-taking and
that the amount of each individual loan in less than 500 €. In such case, limited liability
companies can provide loans under no specific central bank regulation. Such loans are
distributed by the post offices.
SMEs are defined according to the EU rule: Medium have less than 250 employees and € 50
million turnover, Small less than 50 and € 10 million, Micro less than 10 and € 2 million. It
61
Source NAP 2008-2010
50
goes without saying that the enterprise scale in Lithuania is much smaller (the average
monthly income is around € 250). However, for the sake of standards, we have kept the
single definition throughout the study.
There is information available on documents mainly in Lithuanian, specifically in the Law on
Small and Medium-Size Business Development and the Regulations for the Allocation of
Financial Support by the Ministry of Economy of the Republic of Lithuania.
The Lithuanian Central Credit Union has undertaken research on agricultural finance.
The Lithuanian situation in terms of access to finance was peculiar in the last years. In the
transition years and up to 2007, the banking sector experienced a high natural growth, as
the market was still unfulfilled. Lithuania, as the other Baltic countries, was the scene of the
expansion of foreign-owned (mostly Scandinavian) banks. This seemingly unstoppable
market growth seemed to cover most needs, including those of SMEs. There was apparently
no sector of the market lacking access, although the Lithuanian government set up a
guarantee fund, INVEGA, to further facilitate lending to start-ups and to micro-enterprises.
Also, the Ministry of Economy set up Business Information Centres to assist start-ups and
growing business with their capacity building needs.
As the crisis started to bite, and as the unemployment grew, the Ministry of Social Security
and Labour set out to provide deliver targeted grants and loans for targeted sectors of the
population, such as the disabled or the unemployed. The aim was to facilitate the creation of
a small enterprise and self-employment. The loans, limited to just over € 1,000, had a very
high default rate. The monies came from State budget.
Generally, the support to SMEs has changed over time. Until 2003, the system of state
support was very complex. This changed, with procedure simplifications and market led
expansion of access to finance, until 2008. Then, with the crisis, state support almost
disappeared for lack of funds and as did private-sector access to finance. The move towards
SME creation seems to have been an opportunistic choice in times of economic bonanza
rather that a long term trend. This fits with the general opinion that Lithuanians are no born
entrepreneurs.
51
The actors of the microfinance scene in Lithuania are limited to

The Banks

INVEGA

The Credit Unions
We could also marginally include the Post Office that act as an agent for very small
consumer loans, actually disbursed by a private limited company. This is done outside Bank
of Lithuania regulation as the loans are of less than € 500. This offer, on the model of the
SMS loan-over-the-phone model, is potentially dangerous in terms of creating overindebtedness –as demonstrated in Poland or Sweden-. The model however is still limited in
outreach in Lithuania and not aimed at microenterprise development.
The Banks
The banking sector in Lithuania is very limited in its diversity. Most banks are foreign-owned,
there is no state-owned bank, there is no specific SME- or economic development-oriented
bank. The ten banks present in the country are all foreign-owned, mostly by Scandinavian
institutions.
If we take the EU definition of a micro credit, that is a loan of less than 25,000 €, then banks
are providers of microcredit. However, it is impossible to evaluate the total amount of such
micro credits, as there is no specific flag attach to identify the borrower as a micro
enterprise.
Banks have not set micro enterprise as a specific target and have not developed a special
micro credit product. They do however lend to companies that under EU definition are
SMEs, as they employ less than 50 employees. Lending to SMEs allows banks to benefit from
a state guarantee scheme, implemented by the national agency INVEGA.
INVEGA
The Lithuanian government soon identified the need to support the SMEs’ access to finance.
It set up INVEGA in 2001 with the purpose of “promoting the development of SMEs in
Lithuania by facilitating their access to sources of financing”.
INVEGA is a 100 % state-owned limited company that has three main actions:

Guaranteeing of up to 80% of loans disbursed by banks to SMEs and start-ups

Subsidising the interest rate to up to 50% of the interest of the guaranteed loans

Administrating a SME fund, that is money lent to banks at subsidized rate under the
condition that 85% of the amount is on-lent to SMEs.
INVEGA is managing EIF and ERDF funds under JEREMIE initiative.
INVEGA is also being selected as the depositor of the holding fund set up by the Ministry of
Social Security and Labour with ESF funds. This € 15,000,000 facility is intended to develop
entrepreneurship by providing training and micro-credits –rather than grants as previously
52
done. INVEGA is selecting the training and credit delivering partner, which should be the
Credit Unions and more specifically their apex organization, the Lithuanian Central Credit
Union.
The Credit Unions
There are 68 Credit Unions in Lithuania, which including headquarters and 110 selling points,
represent the second largest finance retail network in the country. They have more than
100,000 members that have savings of around € 190 million, and about the same amount of
loans. The combined assets amount to € 280 million, making Credit Unions the 9 th financial
institution in the country by assets. They represent 1% of the market share of loans for the
whole country, but 25% in the provinces and 55% of agricultural loans. They offer mostly the
same services as banks, that is loans, savings, mortgage, means of payment including credit
cards, internet clearing and domiciliation, but no insurance or leasing.
In 2002, they created and apex institution, the Lithuanian Central Credit Union (LCCU), and a
professional association. The LCCU has a role of representation -together with the
Association-, provides consultation and support on IT, accounting or internet to the Unions,
takes on a centralized role for marketing, training and internal control and provides financial
services, such as refinancing the whole network of Unions, keeping liquidity and stability
funds and acting as the unique clearing system for payments.
The Credit Unions have grown fast over the years and importantly are weathering the crisis
much better than the banks. Their year-to-year asset growth has come down from 30% to
7%, but in the context of deep financial crisis in the country, this can be considered an
excellent result and a proof of the viability of the system in Lithuania.
The LCCU plays an important role as a service provider to the Unions, but is also a guarantee
of professionalism towards the outside stakeholders. The LCCU collects funds from
international donors, and has previously received ESF funds in 2007-2008 (€ 100,000 for
training and in 2009-2011 (€ 200,000 for training as well).
3. Use of ESF funds in promoting access to finance
Up until recently, there was no specific mention of access to finance as a specific strand of
ESF support in Lithuania. As detailed below, ESF had participated to the capacity building of
financial institutions, namely the Credit Unions through the LCCU, but the focus on explicit
support to microcredit is new. The upcoming € 15 million fund for encouraging
entrepreneurship through training and microcredit is a challenge for the various players.
53
In the 2008-10 Lithuanian National Action Plan for Social Inclusion and Social Protection
(NAPs) we find the main priorities for Social Inclusion:
1. eradication of the child poverty and strengthening family assistance;
2. increasing of the participation in the labour market;
3. improvement of the access to services.
There is no specific mention of microfinance, microcredits or access to finance. There is
quote of enterprise creation to retain jobs in the rural areas, mainly in the tourism sector,
through ERDF funds, but until 2009 there was no explicit mention of microfinance or
microcredits
The ESF Operational Programme in Lithuania focuses on four priorities, all centred on
improving human resources quality and adaptation:
1. High-quality employment and social inclusion. This aims at helping workers and companies
adapt to changing market conditions, upgrading their skills and access to the labour market,
thus boosting social inclusion. The main target is people in areas of high unemployment and
those who have been out of work for over a year.
2. Lifelong learning, developing an institutional framework for lifelong learning and improving
the quality and accessibility of these services
3. Increasing the competence of researchers and scientists involved in research and
development, promoting their mobility at both domestic and international levels and
between the public and private sector
4. Administrative capacity-building and improving efficiency in public administration: Improve
human resources and performance management and administrative capacities in civil
service; better implement EU initiatives and improve the structure of public administration
by increasing the quality of economic activity regulation and improving the provision of
public services to business and citizens.
The Ministry of Finance is responsible for the managing and payment activities of this
programme, while the National Audit Service is in charge of audit. The National Fund
Department of the Ministry of Finance carries out certifying authority functions, while the
State Treasury Department of the Ministry of Finance receives and distributes the funds
from the European Commission to the project partners.
The “access to finance” strand is to be found in Priority nº1: It is a component of
employment creation, through self-employment and a component of social inclusion, of
which financial inclusion is a key element.
54
Although no past or present ESF projects is namely related to access to finance, we present
those which have un “upstream” impact, touching upon financial institutions’ capacity
building and social inclusion:
The LCCU benefitted in 2007-2009 from ESF funds for a € 100,000 training project. This
investment is renewed for 2009-2011, now for € 200,000. The training was provided by
experienced consultants to the individual Credit Unions staff in both administrative and
operational positions.
The implementation of Equal programme in 2004–2008 resulted in the realisation of
various projects by 28 development partnerships in cooperation with other partners. They
developed and applied innovative methods for resolving the problem of the exclusion of
socially vulnerable persons. The objective of the 20 projects was to encourage the
integration of various social risk groups into the labour market, for example, unqualified
young people, pre-pension age persons, disabled persons, etc. Seven projects were aimed
at strengthening equal opportunities for women and men, encouraging the adjustment of
domestic and labour commitments and supporting the reintegration of women and men
who gave up work into the labour market. One project was devoted to persons who sought
asylum. Financial support of over EUR16 m was earmarked for the implementation of the
projects.
Although it is still in preparation phase, we selected as good practice the incoming ESF € 15
million fund for encouraging entrepreneurship through training and microcredit, as it
represents a good example of stakeholder collaboration and skills optimization. The flows
and actors are as follows: The managing authority is the Ministry of Finance. They receive
the funds and allocate their use to the implementing body, the Ministry of Social Security
and Labour. The latter is in charge of designing the programme, naming the actors and
determining the products. They have found the adequate depositor for the holding fund,
INVEGA. This institution has experience in managing holding European structural funds for
the improvement of the local financial sector delivery. They possess the banking expertise to
follow-up on credit products. Their expertise compensates for the lack of familiarity with
“financial engineering” or reimbursable products at the Ministry of Social Security and
Labour, more used to managing grants. Together with INVEGA, they have selected the
distributor partner, the LCCU, and are setting the conditions on the loan and technical
assistance products. The LCCU is the best partner for attaining maximum outreach, through
the network of their 68 associated Credit Unions. The LCCU acts as one-stop-shop, handling
the last retail phase for loans and training. The LCCU is also a reliable and professional
partner, and has handled structural funds before as well.
The main advantages are that each actor is fully keeping its role: The Ministry of Social
Security and Labour has an agenda of social improvement and will make sure the funds are
used for job creation and financial inclusion. It will also work at measuring the social impact
55
of the fund. INVEGA, a state-owned financial institution, is in the right place as an
intermediary between a ministry and private financial institutions. It has close links to both
counterparts and the experience and tools of a fund manager. The LCCU is the strategic and
financial apex institution for the Credit Unions. Working with the apex allows for a simplified
interface while attaining maximum disbursement outreach. The LCCU is also used to
financial dealings with external funders, in this case INVEGA.
The drawbacks are to be found mainly around lack of understanding and knowledge. The
Ministry of Social Security and Labour lacks knowledge on micro-credit. The team is founding
it uneasy to set the products conditions, such as amounts, terms and interest rates. It is also,
more importantly, a question of policy change, from granting to lending, from one shot
subsidies to revolving funds. The Ministry would appreciate support from consultants and
would learn from examples of similar transitions at equivalent ministries in other EU
countries. For INVEGA, the challenge is to fully understand the specificities of microcredit
and credit unions, as opposed to SME lending and banks. The LCCU needs in turn to take the
full extent of disbursing as credit ESF money for a maximum amount, € 15 million, 6 times as
high as their total amount of loans from the banks today.
The overall picture is positive, as the players are all highly qualified in their area, very
complementary and have fluent communication, facilitated by the small size of the country.
Lastly, the present credit crunch makes the credit product even more attractive. If
knowledge gaps are filled in and if good procedures are set up and followed, this ESF project
is bound for important and positive impact.
4. Conclusion: lessons learned and policy recommendations
Lithuania is undergoing a severe financial, economic and potentially social crisis. European
budget support and structural funds have an all-important role to play. The incoming ESF €
15 million fund for encouraging entrepreneurship through training and microcredit
represents an important step towards setting tools and standards for improved access to
finance. To maximize the efficiency of the process and thus the social impact, there would
need to be training for the different stakeholders to update on the relatively new approach
of microloans instead of grants (in particular at the Ministry of Social Security and Labour)
More generally, there needs to be more work on specifically differentiating and categorizing
SMEs, as the single EU definition has less significance in Lithuania, where a 25,000€ loan is in
actual fact a pretty large loan (it amounts to 2.5 times the GDP per capita).
There should be capitalisation on the Credit Union work on small lending and maybe the
consideration of allowing for microfinance institutions, within the present bank set of
regulations, but with facilitating exceptions (when there is no deposit, for instance).
Finally the ESF can draw great knowledge from this support unusually given under the shape
of “financial engineering” instruments –as opposed to grants-. Hopefully the observation will
be that microcredit does have a strong social effect while allowing for self-sustainability of
the funds, and therefore less funds consumption, in the long run.
56
Spain
1. Access to finance- Country background and context
Despite the great progress that Spanish economy has experienced in the last decades, Spain
is one of the European countries most affected by the present financial crisis. Even though
GDP deceleration began in 2007 it’s only in the last quarter of 2008 that Spanish economy
officially entered “economic recession”. The bursting of the housing market bubble and the
tumbling down of the construction sector, together with the global financial crisis are the
main causes of the worrying new economic perspectives.
In these past months, unemployment rate has increased above other European countries
(the rate was 11.3% in 2008 increasing to 13.9% by the end of the year). Following the
economic perspectives of the European Commission in 2009, unemployment rate in Spain
could reach 20% by 2010.
This situation worsens the environment of disadvantaged people (immigrants, women and
young people). I.e. the unemployment rate for immigrants reaches 28,39% in the first
quarter of 2009 while for the total population it is of 17,36%
Micro enterprise environment
Well before the current financial crisis unleashed, self-employment and micro enterprise
activities were considered a key tool for the development of disadvantaged collectives and
their inclusion in the financial system. In general terms, micro enterprises (less than 9
workers) make up the spine of the Spanish economy (94.1% of the productive sector).
Within these, self-employment make up 51.3%. Therefore, in the next years and foreseeing
wage-earning deceleration, self-employment will become a real and rare opportunity to
generate income for the most underprivileged people.
There is no specific legal regulation in Spain for microfinance or specific access to finance
aside official financial institutions (commercial banks, saving banks and credit cooperatives).
There is a current debate between microfinance players on whether the microfinance sector
should be regulated or not and if this would improve its results.
Credit institutions’ regulation and other financial legislation in Spain can be found on the
Spanish Central Bank website (www.bde.es) and it is divided in three different spheres or
levels: National, Regional and Communitarian.
57
There is are not a lot of available research on financial needs of particular target groups and
none regarding financial literacy.
It must be stressed that the Foro Nantik Lum is the institution which has more publications
on the issue and that some private entities have done some research but only for internal
use.
Recommended reading would include:
 Informe GERTU, Pais Vasco: estudio sobre necesidades de financiación de colectivos
desfavorecidos en la zona de bidasoa –txingudi
 Microcredit in Spain, Silvia Rico and Maricruz Lacalle Calderón. Published by the Foro
Nantik Lum and the EMN (2007)
 Microcrédito Social, una evaluacion de impacto, Silvia rico. Published by Obra Social
Caixa Catalunya. (2009)
 Coleccion cuadernos monograficos del Foro Nantik Lum de Microfinanzas
(www.nantiklum.org)
 Microcrédito en países desarrollados: problemas, retos y propuestas. Begoña
Gutiérrez Nieto y Mª Jesús Pérez Fernández.
 El dinero sí importa. Manual de educación financiera. Banco Mundial de la mujer,
Publisher by Fundacion Laboral WWB en España (2007)
This research has shown that the particular target groups under study do have special
financial needs, in particular need of credit as they do not have the initial capital required by
the traditional financial mechanisms. Such needs are not covered in Spain. Disadvantaged
entrepreneurs are clearly under-financed and the help they receive (National or Regional)
comes in the form of very specific and short-term programmes.
At the moment, and since spring 2009, the major concern and priority of Spanish
Government is “employment”. A lot of urgent measures have been taken to maintain and
foster employment. But self-employment is not considered as a priority.
To find mentions to entrepreneurship we have to go back and check the National Reform
plan. The National Reform plan is the fundamental reference of the Spanish government
policy that sums up all the medium-term strategies to reach full convergence with European
Union objectives.
One of the main objectives of this plan is entrepreneurial support. In January, 2006, the
Council of Ministers approved the plan for entrepreneurial support (PFE), designed to give
better coherence to the existing instruments as well as to promote new ones. Its end date is
58
2011, and it includes a battery of educational, financial measures, of managerial tutelage
and administrative simplification.
Concerning financial support, two tools are considered:
 The financial line of the Institute of Official Credit (ICO) for entrepreneurs (ICOenterprising) has brought 75 million Euros to the economy in 2008, and plans to
inject 100 million Euros for 2009. The ICO Enterprising programme finances under
preferential conditions self-employed and small start-up businesses. The approval of
the credit is done by the banks.
 A microcredit line to enterprising women promoted by the Spanish Women’s
Institute, in collaboration with the Department of Industry, Tourism and Trade
(MITYC), eight SMSOs (Social Microcredit Support Organisations) and the Spanish
Federation of Savings Banks (CECA)
62
In Spain, microfinance (understood as a whole range of financial tools offered to
vulnerable people who operate outside the formal financial systems) comes down to a single
product: microcredit for business creation.
Over the last years, several financial institutions, along with the government and various
NGOs, have penetrated into the field of microcredit with the aim of directly addressing the
issue of poverty and social and financial exclusion, suffered by a sizeable portion of the
Spanish population.
As said before, in Spain the only legal lenders are the official financial institutions
(commercial banks, saving banks and credit cooperatives). Microcredit programmes are
based on the existence of the SMSOs, that serve as a liaison point between the lenders and
the microentrepreneur. The main microcredit programmes are the following:
 Financial institutions´ proprietary programmes: saving banks launched their own
programmes at the beginning of this decade as part of their social function to
prevent financial exclusion and promote economic development and social
progress.
 Financial institutions´ programmes affiliated with the Public Administration on a
national scale: at the moment there is only one programme left at national level
that might be considered as microfinance, which is the programme for
entrepreneurial and business women, implemented since 2001 by the Spanish
Women Institute, an organisation that answers both to the Ministry of Equality
and the Ministry of Industry, Tourism and Trade. It is co-financed by the European
Social Fund. In 2008 this programme granted approximately 130 microcredits all
over Spain, with loan amounts of around 15.000 € to a maximum of 25.000 €,
with the participation of 12 saving banks. In September 2009 there is still no exact
data on credit approval levels. 74 projects have been presented so far; only 5
62
Source: Microcredit in Spain, Silvia Rico Garrido and Mari Cruz Lacalle Calderón. Published in 2007
59
saving banks are collaborating with a lot of difficulties and not many resources
available. The program is due to be renewed in May 2010.
The microcredit line of the Institute of Official Credit (ICO) had some years ago a microcredit
program aimed for disadvantaged collectives, such as immigrants, handicapped, women,
with loans of up to 25.000€. Nowadays, however, it is only directed to SMEs, with a
maximum of 200.000€ per project.
We must highlight the unique role played by savings banks in promoting the financial and
social inclusion of the poor through microcredits. Today, more than ten saving banks offer
microcredits, but the situation is changing and at the moment of writing this report many of
them have reduced drastically their resources assigned to microcredit programmes. The
prospect for 2010 is uncertain but does not seem very optimistic.
This situation shows the need for public authorities to get on board and implement what is
mentioned in the NAP (National Action Plan on Social Inclusion), where facilitating access to
finance is considered as a tool to fight social, labour and financial exclusion. The reality
shows that most of the work at the beginnings of the century was commendably done by
private saving banks, but nowadays with the looming recession the majority has retreated
and there are not many banks that offer microfinance products any longer. Proof of this is
the recent manifest signed by several Spanish SMSOs (“Manifest to support the creation of a
stable microcredit system in Spain”) calling on Public Authorities to support
entrepreneurship programmes and a stable microcredit system.
3.1 ESF Policy priorities
For this study we reviewed the National Action Plan (NAP)63 and the National ESF operative
programme64. 4 of the 17 regional operative programmes were selected in Andalusia,
Extremadura, Galicia65, considered as disadvantaged regions in Europe (“convergence
regions”) and in Asturias66, that belongs to the “phasing-out regions”. Additionally the
operative programme of the ERDF funds has been included in the analysis as it appears to be
63
Priority objectives of the National Strategy Report on Social Protection and Social Inclusion 2008-2010:
http://ec.europa.eu/employment_social/spsi/docs/social_inclusion/2008/nap/spain_en.pdf
64
Priority objectives of the National Operational Program for the European Social Fund (ESF) in the funding
period 2007-2013: http://ec.europa.eu/employment_social/esf/members/es_en.htm
65
Priority objectives of the Regional Operational Program for the ESF in the funding period 2007-2013 for
Andalusia: http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Andalucia.pdf
Extremadura:http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Extremadura.pdf
Priority objectives of the Regional Operational Program for the ESF in the funding period 2007-2013 for Galicia:
http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Galicia.pdf
66
Asturias: http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Asturias.pdf
60
complementary to ESF funds for business financing67. The findings were only focused on
entrepreneurship and financing.
In the NAP, microfinance is considered as a tool that needs to be encouraged, furthermore
there is a clear recommendation of fostering NGO – bank partnership. This is quite positive
considering that it is the current way of managing microfinance in Spain. Unfortunately
those recommendations appear only so specifically in the NAP. Once we get through the
National and Regional ESF Operational programmes we can see that they have not been
implemented, as no more mention is made of microfinance (see further in details for each
operational programme objectives analysis).
What appears as a clear priority objective in all the studied plans and operative programmes
is the importance of stimulating entrepreneurship to activate the economy. Emphasis is
given to the implementation of adequate training and advice programmes. For issues
concerning financing the operative programmes of the studies regions refer to ERDF funds.
At the moment ERDF funds are available in 11 out of 17 regions in Spain. The funding
support consists in credit interest subsidy and direct incentives to finance projects
generating employment.
Unfortunately ERDF funds are limited and are designated only for specific regions, areas,
beneficiaries and duration, and though it is a financial support for start-ups it has no direct
role as a microfinance provider which still depends on savings banks’ goodwill.
Concerning over-indebtedness prevention or counselling, or of microfinance as a tool against
financial illiteracy, no mention is made at all in any of the documents.
In the period 2000-2006, 250 projects have been financed in Spain under the Equal fund.
Among the 250 project, 35 (approx. 14%) had a direct link with support of business activities
responding to the following ESF priorities: Integrating disadvantaged people into
employment, Improving equal access to employment and supporting self employment and
new businesses. Those 35 projects only cover 11 regions from the total of the 17 in the
country.
None of them specifically mention microfinance. But in some of these projects, financial
support for start-ups has been considered and implemented. Further in this report we use
two of those project as best practice examples.
For the period 2007-2013, the use of ESF funds in the regions for financing start up businesses is not
clear yet and no results are available still about activities in the regions and their impact. Only
Asturias offers first results: In the year 2007 incentives were granted to more than 2.300 persons,
with a percentage of women's participation of about 47 % (59.99 % forecasted for 2010). But no
detail is given concerning the amount financed.
Nationwide only one microcredit-for-women project is co-financed by ESF funds. It is promoted by
the General Directorate for Small and Medium Enterprise (DGPYME), the Spanish Women’s Institute
67
Priority objectives of the National Operational Program of the European regional development fund (ERDF):
http://www.mtin.es/es/empleo/economia-soc/Ayudas/FondosUEuropea/ERDF.htm
61
and the Spanish Federation of Savings banks (CECA) with the aim to facilitate the start up businesses.
This program provides funding with profitable conditions and no collateral, on top of technical
advice. The project counts with the collaboration of eight women's SMOs entrusted to give
technical assistance in the elaboration of the project as well as in the follow-up for two
years. The DGPYME, through its collaborator ENISA, fulfils the technical evaluation of the
projects before they are presented to the corresponding financial institutions.
The problem of this program is its limitation to women and secondly, at the moment only
four saving banks have accepted to provide the corresponding micro-credit. A great
percentage of the presented projects are turned down by the saving banks, a consequence
of the financial insecurity and mistrust in the Spanish market.
Women Entrepreneurs for the Industry (MEI) “Equal: La Oportunidad de Emprender en el
Norte de Córdoba”
Implementing period/budget/funding
Dirección General de Fomento del 2000-2004 /1.131.000,00€/ 848.250,00€
Empleo. Servicio Andaluz de Empleo.
Consejería de Empleo. Junta de
Andalucía
Objectives
The aim is to encourage the women of Córdoba to create companies offering qualified services,
especially industrial enterprises, and to generate their own jobs in niche markets with real
demand
Context
Unemployment is a structural problem in Andalusia. Most affected persons are women and
young between 16 and 35 years.
Target population
unemployed / unemployed young without training; women, especially those belonging to
disadvantaged groups (victims of violence, single-parent families, etc.) and unemployed /
unemployed of long duration willing to become self-employed
2 Integral Centres of Services for business creation (CISE) were created with the purpose of
offering orientation, training and advice to promoters of new managerial initiatives. The CISE
62
employed a technical multidisciplinary team that intervened in all the phases tied to the process
of business creation.
From the CISE a strategy of intervention in three phases was articulated: sensitization; training
and advice, and follow-up and promotion of companies. During the phase of sensitization a plan
of communication was started for the entrepreneurs' selection.
After the initial sensitization, a combined action of training and managerial advice was
implemented. Finally, supports where offered for the creation and consolidation of companies:
monthly scholarships for the beginning of the managerial activity; technical advice and followup of the new companies for one year; service of support for the search of alternative funding;
and activities of promotion of the created companies.
The scholarship of beginning of activity, consistent in providing a periodic grant to the
entrepreneurs on form of a salary (500 €/month), in order to cover a specific identified need for
start-ups.
It is a grant that is adapted to the characteristics and needs of the selected participants. On one
hand, the lack of enterprise culture of these persons (added to their great lack of economic
means), was driving them not to request the grants for the dread of that the company would
not succeed and they would have to reimburse it. On the other hand, the habitual grants were
received very late, and had not the effect of relieving the intense deficit of funding that was
appearing in the initial moments of the activity (especially severe when the entrepreneurs start
from a very depressed socioeconomic situation).
Results
1.428 persons total beneficiaries (67 % women), 72 created companies and 143 employments
generated (63 % women)
·
883 persons orientated (74 % women) across 69 actions of orientation
·
396 persons advised (72 % women), 440 hours of advice
·
127 unemployed persons trained (74 % women), in 21 formative realized actions, 816
hours
·
96 grants given (70 % to women), 73.4760 € in grants
·
143 grants to facilitate the participation (83 % scholarships for the transport,
·
2 days of diffusion and sensitization that brought together 102 institutional
representatives · 213 informative days in which 275 persons took part
·
creation of 2 Integral Centres for business creation services (CISE)
The real impact of this equal has been considering “the scholarship system” as a good practice
and its direct application in the present incentives made by the Council of employment of
Andalusia. The amount considered for the self-employed ticket is around 6000 €- 9000 €.
The weakness of the application of the equal best practice by the Andalusian government is that
the payment of the grant is done at once, and it oblige its reimbursement in case the project do
not survive the first year of activity. This as a direct consequence for persons who are already in
a disadvantaged situation.
63
Women’s World Bank Spain: Financial Literacy68
Implementing period/budget/funding
Women´s World Banking Spain
(Banco Mundial de la Mujer)
They started in 2008 with 3 work lines (handbook,
workshops and counselling), with the financial support
of Education and Social Policy. They reached to 1.007
families. Those good results brought them the
possibility of having the project financed again by the
Spanish Ministry.
In 2009, with the support of Family and Childhood Unit,
Spanish Ministry of Health and Social Policy, they
introduced a new element, the web site,
www.educacionfinanciera.es knowing that internet is
one of the most powerful tools to disseminate
information and help more and more families.
In 2009 May, thanks again to Family and Childhood
Unit, Spanish Ministry of Health and Social Policy, they
opened a new advice service in Sevilla.
Objectives
- Increase the financial education level of the population.
- Prevent over indebtedness in families.
- Solve financial problems when existing.
Context
In 1986, a seminar organised by the Franco-Spanish Union was held in the city of Albi, France.
At this event, the president of the Spanish affiliate of Women’s World Banking, Inger Berggren,
first learnt about WWB, leading to its establishment in Spain. Known as “Fundación Laboral
WWB en España” (Banco Mundial de la Mujer), the Spanish affiliate of WWB was registered in
November 1988 and began its activities in 1989.
Banco Mundial de la Mujer operates on a national and international level. It is part of the
Women´s World Banking network that brings together 41 affiliate organisations in 35 countries
of Asia, Africa, Latin America, Europe and North America. This affiliation to a larger
organisation as well as participation in European Union programmes such as Leonardo, NOW,
ECIC and Equal enable the foundation to provide Spanish women with a larger network of
information, clients and professional contacts.
68
www.bancomujer.org
www.educacionfinanciera.es
64
Target population
Target population is families. They believe budget and financial health is a matter of the
whole family, not only the individuals.
METHOD
Bearing in mind that prevention is the basis for a health financial situation, project
methodology is:

Production of a handbook, leaflets and dissemination of them.

Workshops on financial education: 3 hour session courses are carried out all over Spain.

Personal and confidential counselling: Personal and confidential advice to try to find a
solution for financial budget problems. Advice is offered free of charge in offices of
Madrid and Sevilla.

Web site www.educacionfinanciera.es. Through the site more population is reached,
providing with the information and tolls to increase its financial knowledge. Apart from
the contents of the site (Knowledge, simulators, news, …) the sites provides to all people
who are not able to come at the office the possibility of getting mail advice.
ACTIVITIES
Four working lines:
- Production and dissemination of a handbook, leaflets.
- Workshops on financial education.
- Personal and confidential counselling regarding any financial problem (debts,
mortgages, family budget, renegotiation of loans, problems with banks...)
- Web site www.educacionfinanciera.es (includes training, information, advices,
simulators, on line counselling, ...). All services are free cost.
65
Results
Results:
-
470 people have attended 28 training courses:
-
117 people have received personal financial advice.
-
2.000 handbooks edited (1.400 disseminated).
-
Over 4.200 visits to the web site and 100 people got mail advice.
-
2 advice centres: Madrid and Sevilla.
Taking into account that the results mention individuals, and that they are part of their
families, the final impact of the project is even bigger.
The lesson learned from the results of the project is that financial education is very well
received by families as they consider it as a basic need. They also appreciate very much
the advice, to find someone to help them to solve their budget problems.
These good results encourage them to keep working with existing and new action lines
for the coming years.
4. Lessons learned and policy recommendations69
The current report on the situation of “access to finance” in Spain shows that there are no
steady microfinance programs to solve the difficulties that micro enterprises encounter to
obtain finance.
The Spanish microfinance sector was led by the Savings banks at the beginning of the
decade, providing microcredits without guarantee (requiring only a business plan), but this is
not available anymore and there are currently very few financial institutions which scarcely
provide microcredits. Here are some of the reasons why this system has not reached its
whole potential:
 It is necessary that a local SMSO has the personal contact with the credit applicant
and serve as a liaison point between the lenders and the microentrepreneur
 SMSOs sometimes did not receive enough funding to provide global services to the
entrepreneur, and they focused only on the microcredit application itself, not on
implementing other non-financial services key to success such as:
o business personal coaching to choose the right idea and to detect
entrepreneurial spirit
o training on business creation (marketing, human resources, financial control,
etc..)
o specific business plan advice
o immigration information (work permits, etc..)
69 Estudio sobre necesidades de financiación de colectivos desfavorecidos en la zona de bidasoa –txingudi.
Programa europeo GERTU
66
o household information
o advice to balance working life and family welfare
 SMOs have not done enough networking and therefore resources have been clearly
wasted: petitioners applying to several institutions at the same time, experiences
have not been shared, same tools (handbooks, etc) made anew over and over again
 There has been a lack of institutional capacity building and strong political
commitment
 Self-employment is widely seen in the program as a tool for inclusion, and
microfinance appears in the NAPs and other general policies, but at the end of the
day scarcely anything has been implemented regarding microfinance. From the work
done for this baseline study we have found that no-one really takes responsibilities
or is transparent with this issue, not even providing information about the
forthcoming policies or actions.
For successful microfinance support in the future we recommend to:
-
Clarify economic versus social profitability: all programmes that aim to facilitate access
to finance should weigh up economic profitability (that will allow self sustainability) and
the social impact (considering employability and wealth of the people before and after
the project):
-
Consider that situations are varied and change: it is recommended to assign a control
organ that will revise reality and adapt proposals. In Spain not all the regions offer the
same conditions for creating business.
-
Find ways around the problem of lack of initial capital, that makes it impossible to
receive credit: Microenterprises choose in most of the cases the simpler type of legal
formula, which is cheaper and simpler (i.e. “autonomos” in Spain) which do not require
initial capital (as opposed to the constitution of more formal companies as the limited
one for instance). This is precisely one of the main reasons why they are excluded from
being financed by the traditional banks (as the whole risk will be assumed by them with
no capital as guarantee).
-
Recognise that proximity is a key to determine feasibility: it is of vital importance that
the evaluator team is near the entrepreneur (in his/her vital environment and in the local
area).
-
Build in more community implication: although it is complicated in the short term,
community support (entrepreneurs, socially aware individuals...) can be a resource for
micro-entrepreneurs on the long term (via donations, voluntary jobs, etc...)
complementing the support that financial organizations and public administration give.
-
See financing as part of an integrated business creation itinerary: microfinance should
not be considered separately from the whole process of business creation as it happens
in Spain. It must stay as one of the steps needed to set up or consolidate a business and
integrated in the itinerary.
-
Reinforce networking: it is very important that organisations collaborate between them
and that public funds are used to articulate these networks.
67
-
Segment the need of 4 main players in access to finance programmes: The SMSOs, local
social organisation that knows the reality of life of the entrepreneur; The public
authorities that contributes with guarantee deposits; the financial institutions that
provide flexible credits and not only based on risk parameters and the entrepreneurs,
the persons that will induce risk and so that will need to assume it in some way.
-
Share responsibilities as a possible solution to lack of guarantee, each stakeholder
providing a share of a collateral
The best solution is to improve existing financing tools not creating new ones, bringing
creative and shared collateral solutions, making public subsidy payments faster and easier
and having the financial institutions provide more flexible conditions. The funders such as
ESF could ensure that these conditions are fulfilled by the stakeholders by making
disbursement conditional to their implementation.
68
Conclusions and Recommendations
The present baseline study shows that microfinance can be used as an efficient tool for
social inclusion and economic growth in Europe. EU structural funds and especially ESF can
play a significant role in developing a more inclusive environment for access to finance and
entrepreneurship in Europe. However, to reach its full potential, a number of issues need to
be tackled:
-
It is necessary to systematically integrate microfinance as a basic social and
financial service into the NAPs and into the structural funds’ Operational
Programmes.
-
Microfinance, self-employment and microentreprenurship should be officially
recognised as tools for social inclusion and economic growth and become a policy
priority for building a more inclusive entrepreneurial society.
-
To facilitate cooperation at governmental level, an inter-ministerial committee or
task force could be assigned and meet regularly to design and implement a
strategy for inclusive entrepreneurship including microfinance.
-
There is a need for a strong self-employment status, an enabling policy and legal
environment for microenterprises, self-employment and transition from
unemployment to self-employment.
-
There is an extensive scope for further research, to measure and control the
actual access limitations and the potential demand for microfinance. Such
systematic, large-scale studies can be used as a basis for national microfinance
policies.
-
Training schemes on microfinance delivery systems are a necessary step to build
up microfinance capacity for stakeholders at ministerial level, regional
governments, within banks as well as in social organisations.
-
Microfinance programmes should be implemented in partnership with local
public and private stakeholders such as regional and local authorities, financial
institutions, social and business support organisations and the entrepreneurs
themselves.
-
Microfinance programmes targeting disadvantaged entrepreneurs should avoid
complex bureaucratic procedures and be coupled with sufficient advice and
coaching programmes for applicants.
69
BIBLIOGRAPHY
BELGIUM
Interviews
- Ministry of Labour and Social Affairs Flanders
- Hefboom
- Departement Economie, Wetenschap en Innovatie (EWI), Economic, science and
innovation department of the Flemish community
CZECH REPUBLIC
Interviews
-
Ministry of Labour and Social Affairs, ESF Management Department
-
M. of Labour and Social Affairs, Labour Market Section
-
M. of Labour and Social Affairs, Emloyment Services Department
-
Czech and Moravian Guarantee and Development Bank
-
Greater London Enterprise Czech Republic (project promoter)
Documents
Siewertsen, H., Evers, J., Forster, S. and Inge, The Micro-finance and Self-employment
Environment for the Socially Excluded: Country Report Czech Republic; European
Microfinance Network, 2005
Centre for Entrepreneurship Development, FINANCIAL TOOLS GUIDE, A Comparative Study
of Financial Supports for Entrepreneurs in the Czech Republic, Ireland and Spain, 2009
Internet links
www.cmzrb.cz; www.businessinfo.cz; www.czechinvest.cz; www.cnb.cz; www.amsp.cz;
www.hkpz.cz; www.arr-nisa.cz; www.finance.idnes.cz; www.euractiv.cz; www.idnes.cz;
http://www.equalcr.cz/clanek.php?lg=2&id=777
GERMANY
Interviews
- Ministry of Social and Labour Affairs
Documents
Bundesagentur für Arbeit (2009): Statistik der Bundesagentur für Arbeit,
Arbeitsmarktpolitische Instrumente, March 2009.
Bundesministerium für Arbeit und Soziales (BMAS) (2007): Operationelles Programm des
Bundes für den Europäischen Sozialfonds Förderperiode 2007 – 2013, Berlin, November
2007.
70
Bundesministerium für Arbeit und Soziales (BMAS) (2008): Nationaler Strategiebericht
Sozialschutz und soziale Eingliederung 2008 – 2010, Berlin, July 2008.
European Commission (Ed.) (2005): SME Access to Finance: Flash Eurobarometer No. 174.
European Commission (Ed.) (2007): Entrepreneurship Survey of the EU (25 Member States),
United States, Iceland and Norway: Analytical Report: Flash Eurobarometer 192
FIDES Unternehmensförderungs GmbH (2009): Analysis of demand for microcredit in
Brandenburg – Gap Analysis, study presented at the conference: Implementing the EU
Microcredit Initiative - What can we learn from developing and transforming countries?,
Berlin, 26 – 27 January 2009.
Institut für Mittelstandsforschung Bonn (IfM) (2009), Statistik, Bonn.
Jung, Martin; Lahn, Stefanie und Unterberg, Michael (2009): EIF Market Study Microlending
– Capacity Building Needs and Policy Recommendations, March 2009, Hamburg.
Kohn, Karsten and Spengler, Hannes (2008): KfW-Gründungsmonitor 2008: Gründungen in
Deutschland: weniger aber besser – Chancenmotiv rückt in den Vordergrund, Frankfurt am
Main.
Kreditanstalt für Wiederaufbau (2009): Förderstatistik, Frankfurt am Main.
Kritikos, Alexander and Kneiding, Christoph (2008): The Legal Framework for Microlending in
Germany and its Implications for the Lending Design, GfA Disc. Paper No. 14 (2008).
Kritikos, Alexander; Kneiding, Christoph and Germelmann, Claas Christian (2006): Is there a
Market for Micro-Lending in Industrialized Countries? – Evidence from Germany, GfA Disc.
Paper No. 2 (2006).
Kruczek (2009): Status Quo Report District Spree-Neisse – Survey on the Demand of MicroCredit, study presented at the conference: Implementing the EU Microcredit Initiative - What
can we learn from developing and transforming countries?, Berlin, 26 – 27 January 2009.
Lahn, Stefanie and Bendig, Mirko (2009): Microfinance Market Studies in the Framework of
JEREMIE, Cross Country Study on Western Europe – Country Report Germany, March 2009,
Hamburg.
Reize, Frank and Lo, Vivien (2008): KfW Mittelstandspanel 2008: Mittelstand - auch kleine
Unternehmen - erfolgreich im Ausland!, Frankfurt am Main.
Reize, Frank (2007): KfW Mittelstandspanel 2007: Mittelstand im Konjunkturhoch – Defizite
bei Innovationen, Frankfurt am Main.
Siewertsen, Hedwig; Evers, Jan; Forster, Sarah; Heetvelt, Inge; Ramsden, Peter and Whitni,
Thomas (2005): Policy Measures to promote the use of micro-credit for social inclusion ,
Study conducted on behalf of the European Commission DG Employment, Social Affairs and
Equal Opportunities, unit E/2.
Statistisches Bundesamt Deutschland (2009), www.destatis.de.
Sternberg, Rolf; Brixy, Udo and Hundt, Christian (2007): Global Entrepreneurship Monitor –
Unternehmensgründungen im weltweiten Vergleich: Länderbericht Deutschland 2006, Köln.
LITHUANIA
71
Interviews
-
Ministry of Social Security and Labour
-
INVEGA
-
Ministry of Economy
-
Lithuanian Central Credit Union
SPAIN
Interviews
-
Administrative Unit of the European Social Fund (UAFSE)
-
BIC GALICIA. Centro Europeo de Empresas e Innovación de Galicia S.A
-
Área de Proyectos/ CEEI Asturias - Parque Tecnológico de Asturias
-
Equal AVANZA coordinator in Asturias, Valnalon
-
WWB MADRID, responsible of the financial literacy program:
-
Ministerio de Economía y Hacienda - Madrid, España; Dirección General de Fondos
Comunitarios, Subdirección General de Administración del FEDER,
-
Instituto de la mujer.
-
Ministerio de Igualdad, gestión del programa de micro crédito para mujeres edición
2009
Documents and websites
o Spanish Central Bank website :www.bde.es
o Nantik Lum www.nantiklum.org
o Administrative Unit of the European Social Fund (UAFSE) www.mtas.es/uafse
o Microcrédito Social, una evaluacion de impacto, Silvia rico. Published by Obra Social
Caixa Catalunya. (2009)
o Microcredit in Spain, Silvia Rico Garrido and Mari Cruz Lacalle Calderón. Published in
2007
o Labour and Immigration Ministry: www.mtas.es / www.seg-soc.es
o SME Institute (IPYME): www.ipyme.org
o World Women´s Banking Madrid: www.bancomujer.org
o National Strategy Report on Social Protection and Social Inclusion 2008-2010.:
http://ec.europa.eu/employment_social/spsi/docs/social_inclusion/2008/nap/spain_
en.pdf
o National Operational Program for the European Social Fund (ESF) in the funding
period 2007-2013: http://ec.europa.eu/employment_social/esf/members/es_en.htm
o Regional Operational Program for the ESF in the funding period 2007-2013 for
Andalusia:
72
http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Andalucia.pd
f
Asturias:
http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Asturias.pdf
Extremadura:
http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Extremadura
.pdf
Galicia:
http://www.mtas.es/uafse/es/programando/programasOperativos/pdf/Galicia.pdf
o National Operational Program of the European regional development fund (ERDF):
http://www.mtin.es/es/empleo/economia-soc/Ayudas/FondosUEuropea/ERDF.htm
o http://www.juntadeandalucia.es/empleo/equal/
o Spanish Economic Affairs Ministrywww.dgfc.sgpg.meh.es
73
Credits:
Belgium:
Olivier Jérusalmy - Réseau Financement Alternatif
Chaussée d'Alsemberg, 303-309 - 1190 Brussels - Belgium
Czech Republic:
Stefanie Lämmermann, European Microfinance Network secretariat
103, rue de Vaugirard – 75006 Paris - France
Germany:
Mirko Bendig, Stefanie Lahn - EVERS & JUNG GmbH
Deichstr. 29 - 20459 Hamburg - Germany
Lithuania:
Manuel Moyart, European Microfinance Network secretariat
103, rue de Vaugirard – 75006 Paris - France
Spain:
Sophie Lens and Ana Gorostegui – Transformando - Cooperativa de iniciativa social
Calle Silva - 2 3º-3 28013 Madrid – Spain
74
ANNEX - Interview – Questionnaire Guideline
Demand side
1. Is there any sector of the entrepreneurial population with more difficult access to
finance? If yes, which one(s)?
2. Why do you think this is the case? Do these populations have any specific needs
which differ from the mainstream?
Legal Framework
3. Is there a specific national legislation in place for the different microfinance
providers? What are the main restrictions/ facilitating points?
(Who can lend? Who can borrow? Who can take deposits? Who can provide
insurance? Right to a basic bank account? Usury rate?)
4. Does the legal system of the country permit a variety of institutions to engage in
microfinance (credits, savings, insurance, financial advice)?
Public Policy
5. Is promotion of self-employment/ micro-entrepreneurship a policy priority? Is there
any policy targeting specific groups?
6. Are there any incentives or disincentives to move from employment to selfemployment?
7. Is a microenterprise considered as an efficient way out of unemployment? Are there
any incentives and which?
8. Does the government play a direct role to promote access to finance? Is there a
specific policy for access to finance?
9. What tools does the government provide (guarantee funds, subsidies)?
10. Is there any public incentive for cooperation between financial institutions?
Finance providers and access to finance
11. Is financial inclusion of any importance to financial institutions? How?
12. Are there any working relationships (not charity) between the formal financial system
and microfinance providers/ programmes?
75
13. If there are institutions specialized in providing access to finance, do they come under
a specific umbrella/lobbying organization?
Funding possibilities/ European structural funds (especially ESF)
14. Is funding for microfinance institutions available throughout the country?
15. How is communication on ESF funding availability made?
16. Is the charity regulation favourable for donors to invest in loan portfolio/operational
costs of microfinance?
17. Is the support of entrepreneurship and self-employment a priority in the national
ESF-strategy and what resources does it get?
18. Is microfinance specified in an ESF measure and has it been used? Is debt advice
specified in an ESF measure and has it been used? Financial capability?
19. Which impact have ESF funded projects/programmes had on access to finance for
specific target groups?
20. Do you think that ESF funds respond adequately to the demand?
21. What are weak points in the structural funds (esp. ESF) regarding access to finance?
What should be improved?
76

Document 806057

Transcription

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