On 10th November 2015, the Employment committee of the European Parliament adopted with a large consensus a report on the implementation of the European Progress Microfinance facility. Commenting the decision, the report author Sven Schulze, a German member of the European People’s Party, said: “The instrument works as a whole, but unfortunately sufficient funding is not always guaranteed. The European Commission must therefore find a solution quickly in order to make Progress Microfinance even better in the future." The instrument is working effectively but it needs some improvements to reach higher results. As the Employment committee added, the grant of money should be combined with other supporting actions, such as the assistance to create effective business plans and with bookeeping.
The programme is funded by the EU and the European Investment Bank and has the objective to increase the availability of loans - below € 25.000 - to start or develop small business. The mechanism is based on giving a total guarantee of € 200 millions to banks and financial institutions so as to obtain more loans and better conditions for borrowers.
Supporting micro-enterpreneurs represents certainly an effective instrument to overcome the crisis.
Read more:
http://ec.europa.eu/social/main.jsp?catId=836&langId=en
http://ec.europa.eu/social/main.jsp?catId=983&langId=en
The programme is funded by the EU and the European Investment Bank and has the objective to increase the availability of loans - below € 25.000 - to start or develop small business. The mechanism is based on giving a total guarantee of € 200 millions to banks and financial institutions so as to obtain more loans and better conditions for borrowers.
Microfinance
represents an important instrument to fight poverty and unemployment
across the EU. Originated
in south Asia, Latin America and in general in the developing
countries, the technique of microloans is successfully used since 40
years ago. The basic idea is poor people have qualities and skills
that remain unutilized because of the lack of financial resources.
The charity is not an effective way to fight poverty because it
creates dependency and doesn’t stimulate the economic initiatives.
So, the strategy of the microfinance is to offer credit, savings and
other essential financial services to people living in critical
situation of poverty. The
group of people that can benefit from microcredit is very large,
including long-term unemployed, migrants, ethnic minorities and in
general whoever encountering difficulties to access traditional
financial services. As
benefits, the microfinance allows disadvantaged people to start their
own business, sustain an income and, in general, participate to the
economic activities. This resulted in microfinance becoming a proper
tool to reduce inequalities and poverty.
Supporting micro-enterpreneurs represents certainly an effective instrument to overcome the crisis.
Anyway if it seems that the European Union is going on the right road, but it is also true that not all the bank institutes in the Member States put at disposal of their clients this kind of tool. And this not only due to the lack of financial resources. Maybe the European Commission and the Parliament should encourage more its use evaluating the opportunity to adopt a specific political initiative on this matter.
Read more:
http://ec.europa.eu/social/main.jsp?catId=836&langId=en
http://ec.europa.eu/social/main.jsp?catId=983&langId=en
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