Employment, Social Affairs & Inclusion

Social economy and inclusive entrepreneurship - Microfinance

Micro-enterprises are enterprises employing fewer than 10 people and which have an annual turnover or annual balance sheet total or maximum EUR 2 million. They represent over 90% of European enterprises and are thus decisive for boosting jobs, growth and investment in Europe.

Lack of access to finance is one of the main obstacles micro-enterprises face. Microfinance, which includes guarantees, microcredit, equity and quasi-equity extended to persons and micro-enterprises that experience difficulties accessing credit, can help overcome it. Microcredit is a loan of up to EUR 25 000.

If you are a micro-entrepreneur and would like to apply for a micro loan find more information about EU microfinance support.

Challenges and policy response

Access to finance

In particular for vulnerable groups with a difficult access to the conventional credit market and for start-ups as well as existing micro-enterprises, a significant unmet demand for microfinance exists. Therefore, the Commission is helping entrepreneurs access financing by supporting microcredit providers through the Employment and Social Innovation (EaSI) programme

The Commission also supports microfinance via the European Social Fund.

Creating a sustainable microfinance ecosystem

Microcredit providers play an important role in channeling the EU support to entrepreneurs. However, bottlenecks at the level of microcredit providers may make it difficult for entrepreneurs to effectively access funding and benefit from the EU funding. In order to overcome these, the Commission established the EaSI Technical Assistance through which it:

  • provides to microcredit providers an institutional assessment or a microfinance institutional rating
  • offers targeted capacity building through tailored trainings
  • organises workshops, seminars and exchange visits between microcredit providers
  • operates a dedicated helpdesk

Developing common standards: European Code of Good Conduct for Microcredit Provision

The European microcredit market is a young and growing sector which is quite heterogeneous due to the disparity of the legal and institutional frameworks in the Member States and the diversity of the microcredit providers. As a consequence, lending practices in microcredit vary considerably.

The Commission has developed the European Code of Good Conduct for Microcredit Provision with the objective of setting out good practice guidelines that will better enable the sector to face the challenges of accessing long-term finance. To be able to benefit from an EaSI Microfinance Guarantee or EaSI Technical Assistance, non-bank microcredit providers have to sign up to the Code and banks have to endorse it.

EaSI MicPro acts as a source of information about microcredit providers in your country.

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