The Commission publishes its action plan to “reignite the entrepreneurial spirit in Europe” which includes a focus on a second chance for honest entrepreneurs (working with the Member States to reduce the duration and cost of bankruptcy procedures and to make it easier for entrepreneurs to start again) and on creating better opportunities for specific groups that are... [more...]

CfRC calls for individual bank data on SME lending to be made available to Local Economic Partnerships The Centre for Responsible Credit has today welcomed the Department for Business, Innovation and Skills publication of individual bank performance in supporting small to medium enterprises through lending backed by the Enterprise Finance Guarantee but has called for... [more...]

A book has been making a storm and reports on an interesting development in the microfinance sector which may be of some interest and an intriguing read. Recently a series of scandals and critical academic papers have shed serious doubt over the sector and as we have reported on the ECRC website in 2011, the World Bank’s CGAP and the industry has elaborated some principles... [more...]

Is this tailored policy discrimination really necessary? We blindly tried to turn the poor into self-made entrepreneurs, let’s be careful in now focusing on turning women into their risk-taking male equivalent counterparts just for the sake of self-enterprise. See latest EU initiative Female mentors to help woman entrepreneurs to get started A new European network of... [more...]

The microfinance industry is stepping up its efforts around responsible finance, including consumer protection measures and efforts to prevent over-indebtedness, according to CGAP, the global industry body dedicated to advancing financial access for the world's poor. The rapid growth of microfinance into new markets is being accompanied by a renewed emphasis on providing... [more...]

Perhaps the Commission should have thought about elaborating standards before having invested in fostering microcredit at all cost. But better now than never. Why doesn’t the Commission also conduct research on evaluating microcredit ventures in the EU. Improvements in regulation, policy and institutional characteristics can only benefit from critical analysis. Below the... [more...]

09/11/2010 - 10/11/2010 Organised by the Commission in collaboration with the European Investment Bank (EIB) Group, the conference was the occasion to discuss achievements and challenges for microfinance in the European Union. It was held back-to-back with a thematic review seminar on Promoting entrepreneurship and self employment across Europe in the framework of the... [more...]

At the Pittsburgh Summit in 2010, the G-20 said it would create the Financial Inclusion Experts Group (FIEG) to expand access to financial services, including credit, to the poor. Nothing has happened so far and ACCION a leading microfinance specialist suggests its definition of financial inclusion to bring the debate forward. While there may be a growing consensus on the... [more...]

As the Grameen Trust enters China, this article tries to explain why microloans are still relatively underdeveloped – the reasons include: inadequate or overly restrictive government regulations (e.g. requirement that a formal bank must be the controlling shareholder in any village bank and that fact neither organization can operate outside its registered county), complex... [more...]

ECRC’s South African partner You and Your Money, took part in our international conference in London. General Director, Johann Magerman, is grateful to have attended the conference and says the experience proved to be a rich and rewarding one, as one was able to connect with people from diverse cultures and backgrounds. Johann will be one of several international partners... [more...]

By Babel Strasbourg on Thursday, October 30 2008 (14 September 2008) By Vincent Lebrou , Translated by Rob Compton Small loans, or so-called microcredits, are increasingly being used in the fight against poverty and exclusion. Whether considering the situation in countries of the former Eastern bloc or Western European countries, it is clear that microcredit is... [more...]

The Public Service Commission, an independent and impartial body created by the South African Constitution to enhance excellence in governance within the Public Service presents a report on the investigation into the impact of micro-lending and garnishee orders on public servants and its implications for the Public Service. ------------- Article from the Times South... [more...]

The Ugly Side of microlending as seen in Mexico, reported in Business Week HOW BIG MEXICAN BANKS PROFIT AS MANY POOR BORROWERS GET TRAPPED IN A MAZE OF DEBT (Business Week 13 Dec07, by Keith Epstein and Geri Smith) In a gleaming office tower in Mexico City secured with retinal scanners, bulletproof glass, and armed guards, dozens of workers in white lab coats dart... [more...]

REGULATOR WARNS ERRANT MICROLENDERS (Regis Nyamakanga, Business Day - Johannesburg,South Africa, 31 January 2008) THE National Credit Regulator threatened yesterday to deregister and prosecute nearly 20 microlenders for allegedly flouting the National Credit Act, which was promulgated last year to help regulate SA’s R850bn consumer credit industry. Investigations and... [more...]

Microfinance needs a discussion. The German Kreditanstalt für Wiederaufbau and the Frankfrut Based Finance Institute sponsored by major banks will hold a conference in Frankfurt Germany on February 22, 2008 which will discuss "responsible finance" In this they want to address Microfinance which is headed by the following question. "With the growing diversity of the... [more...]

The increase of poverty is the biggest challenge for neo-liberal politics. The gap between rising productivity and declining equality inside capitalist societies threatens social cohesion and creates political turmoil. Indebtedness which historically was seen as the most visible threat of money society to individuals as a means to escape poverty is surprising. It creates... [more...]

On the 8th of October, the Commission announced four groups of barriers to start afresh after business failure and identifies the importance of insolvency law, recommending a clear distinction between the legal treatment for non-fraudulent and fraudulent bankrupts, and an early discharge. An online platform has been launched to help on the subject. Below is the press... [more...]

BRUSSELS 2007! Workshop 5: "Credit for the “Poor”: Microlending or Bank Loans?" - OUTLINE Karol Sachs (FEBEA), Gregory Squires (George Washington University, USA), Pierre Silvy, ADIE [more...]

W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS? Quality versus Access in Western European Microfinance A discussion paper by Oliver J. Haas This paper provides a brief overview of microfinance in Western Europe. Until now, microfinance referred only to microcredit, but the sector is growing fast and is diversifying its services. This paper intends to raise... [more...]

W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS? Benoit Granger (MicFin, Chair), Leo Verhoef (Eindhoven University) and Bernd Balkenhol (ILO) ask critical questions to Pierre Silvy (ADIE), Karol Sachs (FEBEA), Antoine Saint-Denis (EU DG Empl.), Pete Garcia (Chicanos Por La Causa, USA), and Gregory Squires (George Washington University, USA) Held on Friday... [more...]

W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS? Gregory Squires and Leo Verhoeff Thoughts and questions from Prof. Greg Squires: It is important that "micro-lending" not be marginalized or ghettoized from conventional or mainstream banking services. Large, mainstream lenders and lending should not be let off the hook just because there are CDFI's, other small... [more...]

W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS? Comments and issues to be raised by Prof. Leo Verhoef: The word “poor" suggests, that we are dealing with a target group of permanently, financially disabled people. In my belief everybody asking for finance is financially disabled, although temporarily. This view should also be taken in respect to people, without... [more...]

W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS? Example of the type of questions to be directed at the panellists (suggested by Chairman of the session Benoit Granger) - Are loans officers in traditional banks able to deal with micro business ? (do the banks invest in that field?) - If BDS are necessary (business development services) to secure the loans,... [more...]

France was the first country which gave exemptions to its rate ceilings for social lending especially microlending. A country which may have the toughest legislation on productive credit and the limits it has to observe to remain below a ceiling which poor people can afford already exempted social lending from the general bank supervision in its bank law which is in so far... [more...]

IN PRAISE OF USURY (Aug 2nd 2007- From The Economist print edition) IGNORE CREDIT SNOBS. IT IS NO SIN TO PROFIT FROM LENDING TO THE POOR IN DANTE'S “Divine Comedy”, usurers are consigned to a flaming desert of sand within the seventh circle of hell. Attitudes have since softened a bit. Microcreditors, who offer small loans to self-employed poor people, enjoy hallowed... [more...]

David Puglielli Special Project THE WORLD BANK AND MICROFINANCE: AN ELEPHANT TRYING TO BUILD A BIRD NEST Summary Though structural changes directly effect only the formal private sector, the indirect ramifications spill over into the informal sector. Increasing the incentives for both domestic and foreign investment makes more financing opportunities available for... [more...]

The EMN hold its conference in Berlin with the participation of activists from the Microfinance institutions as well as from banks. We had not the chance to attend the large variety of interesting meetings. Many of the presentations are available on the Internet. One event was a podium discussion where five questions concerning the future of microlending were answered by... [more...]

Among the many articles praising the achievements of micro-finance to date, the following piece “A Second Look at Microfinance” provides some food for thought to help look at the sector from a more balanced perspective. Although microfinance is praised as one of the best methods for lifting the world's poor out of poverty, a new briefing paper from the Center for Global... [more...]

In response to a recent report by the French Central Bank on alleged outcomes for SME's as a result of lowering usury ceilings, we encourage experts to give ECRC (and the French Parliament) their opinion on this research, including experiences from outside of France. USURY CEILINGS IN FRANCE In France usury ceilings limit the interest banks can charge to consumers and... [more...]

It is exam day for five women in a village near Sangareddi, about two hours drive from the southern Indian city of Hyderabad. On a warm autumn day, they sit in a circle on the ground as a local manager from SKS, a Hyderabad-based micro-finance company, drills them on loan fees, interest rates and repayment schedules. The manager uses pebble-like seeds as counting tools... [more...]

Eight years ago, 30-year-old Siddama and her husband made Rs25 a day as agricultural workers in a village in the southern Indian state of Andhra Pradesh. The couple's 12-year-old son was pushed into bonded agricultural labour because of heavy loans taken out by the family after a drought-hit crop failed. But through a loan of Rs1,000 from SKS, a Hyderabad-based... [more...]

Microfinance can provide tangible commercial opportunities for banks in the region notably if they partner with a microfinance institution, said Debbie Arnold, VP of Emerging Markets at Visa International, the world's leading provider of electronic payments. Speaking at the two-day "2006 Dubai Microfinance Conference" that started yesterday and was inaugurated by Her... [more...]

Below is an FT article on microlending "EXPLOSIVE GROWTH" IN TINY LOANS TO POOR (By Krishna Guha in Washington, published: November 2 2006) More than 113m people took part in microfinance programmes last year according to a new report that documents explosive growth in the business of making tiny loans to poor people. The study, by umbrella organisation Microcredit... [more...]

In its third meeting, the Bremen/Oxford research project on UNFAIR SURETYSHIPS IN THE ENLARGED EUROPEAN UNION will gather at Hotel Munte (in Bremen on November 3-4 2006) researchers from all over Europe, especially the East and Scandinavia, to discuss the legal and economic aspects of suretyships which use family ties as a means for debt enforcement. While such use has... [more...]

PIONEERING BANKER GAVE CREDIT TO THE POOR Muhammad Yunus, the recipient of the Nobel Peace Prize, became famous for creating microcredit, a system of small-scale lending that reaches borrowers considered too small or risky by conventional lenders. The Grameen Bank, which Mr Yunus founded in Bangladesh in 1976, lends tiny amounts - typically $200 or less, to borrowers,... [more...]

Dr. Claudia Kreuz, investigates market failure at the small end of financial transactions in Germany. Recent legislation for entrepreneurship and the need to expand the institutional supply of small scale financial services, means microlending and other such innovative solutions may be appropriate FOREWORD: Microfinance and - even more so – microcredit is generally... [more...]

MICROSHARKS (from The Economist, Aug 17th 2006) RAPID EXPANSION OF INDIAN MICROCREDIT LEADS TO A TURF WAR WITH THE GOVERNMENT MONEYLENDERS bad; microcredit good. That has been the common view about financial services in much of the Indian countryside. Traditional moneylenders charge extortionate interest rates to those in desperate need. Microcredit-providers, which are... [more...]

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QUESTIONS TO BE ANSWERED WITHIN THIS WORKSHOP SESSION: 1. Can business micro credit lending be a commercial activity or is financial support always necessary? 2. How to improve the situation for micro credit lending in Europe? 3. Which are good examples within or outside the EU? 4. Is there a specific role for main stream banks in micro credit lending? 5. If so, how... [more...]

(Albrecht Mulfinger is Head of Unit “Crafts, Small enterprises, Cooperatives and Mutuals” at the Directorate-General Enterprise and Industry of the European Commission) BACKGROUND: There are some 23 million enterprises in Europe, of which 92% are micro businesses with less than 10 employees. Almost half of those businesses consist solely of a self-employed and... [more...]

The Joint Managing Director of the ICICI Bank, India, Lalita D Gupte, on Wednesday said the agriculture sector and rural areas which lack the banking facilities, have great potential for the personal loans, agricultural loans and micro financing. First you bring down your costs to the minimum and then lower it further for the rural areas to make the lending ... [more...]

Currently, South African banks exclude most low-income households from access to formal housing loan finance with which to resolve housing problems. The research reported here examined the banks' resilience to change the status quo so as to become more flexible and all-inclusive. Using naturalistic enquiry, the research gathered evidence from five banks and a leading... [more...]

Acknowledgements After working at several consultancy agencies for a number of years I decided to engage on a new job. Giving advice to other people or doing it yourself seems to be a great difference. The start as a director of the Volkskredietbank was the possibility to practice the theoretical experience. In the ongoing process of optimalisation of the bank, I... [more...]

Ingrid B. Smith was a connoisseur of low-paying jobs - baby-sitting, ice cream vending, fast-food slinging -before taking a better position: CEO. The cleaning company that she and husband, Larry A. Smith, started is still in business after four years, and the East Baltimore residents say needed loans are a big part of the reason. Tiny loans: $1,500 to buy equipment;... [more...]

Sitting in his office in Makati City, Japanese executive Ryukichi Kawaguchi shakes his head. It is a wonder, he said, how Thailand has overtaken the Philippines in terms of economic progress, noting that in the '70s, the Philippines was touted by many as Asia's shining star. Mr. Kawaguchi is president of the Japanese Chamber of Commerce and Industry of the Philippines.... [more...]

MICRO NO MORE From The Economist Nov 3rd 2005) FINANCIAL SERVICES FOR THE POOR AND THE RICH ARE BECOMING INCREASINGLY ALIKE THE group of 30 women in the dusty square of a poor village outside Hyderabad, their children on their laps, passing tiny deposits and loan payments to a young man in their midst, seem to be engaging in a form of finance quite unlike that practised... [more...]

European Microfinance Network where alternative credit institutions gather to discuss the supply of microcredit to people who need small entities of credit in order to escape unemployment and poverty is gathering Barcelona. The network is animated especially by the French organisation ADIE whose president is one of the main speakers. The network has been partly created... [more...]

More than its social aspect of providing credit to the poor, practitioners and policy makers here and around the world have progressively seen microfinance as a critical "sector for growth and development", that is, that microfinance can be a viable "traditional" business. Indeed, there is a growing realization that "commercialization" of microfinance allows its... [more...]

Large banks have traditionally shied away from low-income borrowers because of the risk or difficulty involved in lending. As a result, formal financial services in poverty-stricken provinces have almost been unheard of, particularly in rural areas where there is low population density and little physical infrastructure. Microfinance, particularly those provided by rural... [more...]

[...]This how-to manual guides managers of microfinance institutions (MFIs) through the complexities of offering basic insurance products, either on their own or in partnership with an insurance company. Insurance is one solution to help low-income households and microfinance institutions to manage risks, but it is not the only solution and it is not always the best... [more...]