Microfinance Gets Boost from EU

November 11, 2010

Faced with an expected 3.5 million job losses this year, alone, the European Parliament has given its final okay to 100 million Euros ($137 million) in initial funding for micro-loans to Europeans who have lost their jobs and want a shot at starting their own small businesses.

The EU leadership is hopeful that the European Progress Microfinance Facility, which it preliminarily approved in February, will jump start local economies by leveraging 500 million Euros ($685 million) in credit from international financial institutions.

"This facility will offer a lifeline to people suffering from the [economic] crisis and help create new jobs," said Lazio Ander, EU Commissioner for employment, social affairs and inclusion, in a statement following the vote.

"The facility will help people set up their own small businesses, offering the opportunity for a fresh start and the chance for micro-entrepreneurs who have trouble accessing credit to realize their ambitions," he said.

Individual loans for amounts under 25,000 Euros (or $34,000) will be made available to enterprises employing fewer than 10 workers. In all, the EU hopes to generate 45,000 loans to micro-entrepreneurs overt the next eight years.

The European Union estimates that 99% of all start-up businesses throughout Europe are micro-enterprises; about one-third of these are launched by previously unemployed workers, and that better than 90% of European businesses employ fewer than 10 workers. The self employed make up about 15% of the European workforce, according to the EU.

P2P payments in the U.S. total about $2.9 trillion annually; almost all involve cash and checks

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