European Microfinance – Relevance, Efficiency And Impact

Abstract

<jats:p>Microfinance aims at providing basic financial services such as loans, savings and insurance to socially and financially excluded persons and microentrepreneurs. Among these services, microcredit is the most recognizable instrument of microfinance. Microcredit supplies financial means to start up businesses and to finance microenterprises. Microfinance originated in poor countries. In recent years, however, it has also gained some recognition in European countries. This article presents the relevance, efficiency and impact of microfinance policy and its policy instruments with respect to support for microenterprises in the European Union.</jats:p>

A data envelopment analysis of the global microfinance industry

“…But MFIs' economic importance goes beyond their aim to reduce income inequality by providing access to different financial products to the poor (Gutiérrez-Nieto et al, 2007;Hermes, 2014); they support microbusiness entities with financial services that facilitate their normal operation and allow their expansion to other market segments, other regions and other countries. In addition to the success record of MFIs in helping the poor start small-scale productive activities that improve their potential income, there also are multiplying effects in terms of employment creation, increased consumption, and associated investments (Fila, 2015). Considering that in many cases an important hurdle for the permanence, growth and consolidation of small and medium sized enterprises is the limited access they have to financial services, the MFI alternative opens new and brighter horizons (Ardic, Imboden, & Latortue, 2013).…”