Brussels, 22/09/2004 (Agence Europe) - On the occasion of a conference held on Tuesday in Brussels, the Commission and key industry stake-holders highlighted the importance of promoting a more favourable environment in Europe for access by small enterprises and entrepreneurs to microcredit. Microcredit is defined as loans below 25,000 euros. Participants at the conference welcomed the trend of a growing industry offering microcredit for small business and entrepreneurs. Today several institutions are providing thousands of microloans per year and CONFIDI, the major mutual guarantee system is providing some 100,000 guarantees for microloans. President Romano Prodi and Commissioner Jan Figel took part at the conference.
The conference confirmed the potential of microcredit in fostering entrepreneurship. These microloans are particularly useful to promote self employment and the creation of small businesses in the services sector, where access to credit is often difficult. The dissemination of good practices, moderate and assessed financial support of public authorities and an appropriate legal and fiscal framework are recognised as being necessary to strengthen the dynamism of the sector. In Europe, over 90% of enterprises are small enterprises. Furthermore, there is a growing trend towards the creation of one-person self-employed businesses, particularly by unemployed persons. Such businesses have specific financial needs: those who require external financial resources often request funding of small amounts (below EUR 25,000), which is a real challenge for the financial sector. Many of these businesses, however, face difficulties in accessing credit. The deficiency in credit provision to small enterprises is explained by its high transaction cost and the financial providers' perception of a high risk and low return activity.
In order to overcome these difficulties and build an efficient microcredit industry, the European Commission recognised that the following strategies should be considered: - disseminating good practices among European networks and promoting cooperation among all financial and non-financial players; - improving the legal and regulatory framework for microcredit provision and adapting administrative, tax and social requirements to the needs of small businesses; - achieving better synergies between enterprise policy financial instruments that have proven their worth and those of European regional and social development, as well as granting public funding on the basis of a multi-annual rather than yearly agreements to help microcredit institutions achieve sustainability. The conference saw these as the key ingredients for the emergence of a European microcredit industry and as a way to provide access to credit for millions of SMEs in Europe.