Microcredit - Europe's Job Creator

[chris macrae]

How can we influence the consortium below http://www.trust.org/trustlaw/connect/quiz/ 

(more on world class project 2011.1 save jobs across europe with microcredit at www.unacknowledgedgiant.com  )

 

In normal times this intervention should have been led by yunus

 

Trouble is that while Maria Nowak is Europe's best person to lead this the structure that has been set up by the law firms is already doomed to destroy radical change in professions- if you are an entrepreneurial support organisation the parent web site says do not contact us directly - go through one of our locally chosen entrepreneur organisations- then presents a list of unsustainable social entrepreneurs

 

MICROCREDIT EUROPES JOB CREATOR

That goal is reflected in the work of 20 law firms brought together by TrustLaw (www.trust.org/trustlaw), a legal news service run by Thomson Reuters Foundation, for a major study on the regulatory obstacles to microcredit across the EU's 27 member states.

Led by law firms Orrick and Latham & Watkins, the consortium is working on a country-by-country report to be published by TrustLaw later this year.

Paris-based Adie plans to take the report to the European Commission in November to advocate for sweeping changes to regulations across Europe.

MONOPOLY ON LENDING

The European Commission estimates there are some 18 million micro-enterprises in member states, employing 37.5 million people or about 30 percent of the overall workforce. Micro-enterprises contribute 1.1 trillion euros ($1.6 trillion) to the European economy.

A micro-enterprise is defined as a company employing fewer than 10 people, while microcredit is a loan of less than 25,000 euros ($36,000).

Advocates of regulatory change point to the European Commission's new 10-year plan to boost economic growth and create jobs, known as Europe 2020, as an opportunity to integrate microcredit into EU priorities.

Among the reforms MFI are calling for, Adie's Nowak said it was vital to break monopolies on lending. In Germany, for example, only banks or specific financial institutions can grant loans, meaning MFIs can only act as agents.

"The challenge is not to enter into competition with banks," she said. "It's rather to be a sort of entry point for people who do not have access to banks into the banking sector."

She called for a softening of usury rules capping interest rates on small loans, arguing that existing rates were "too low to make the system sustainable".

Austria, Denmark, Finland, Germany, Hungary, Italy, Poland, Portugal, Romania, Spain and Sweden all have usury rules.

Nowak said other countries should follow France's example by allowing MFIs to borrow from banks for the purposes of on-lending to micro-enterprises. Throughout much of Europe, MFIs can only lend out of their own equity.