Microlending Seen Taking Off in Western Europe

September 30, 2010

The ongoing economic recession has created has led to both social and economic crises in Western Europe that could well jump start microfinance, as it becomes an acceptable means for overcoming perils of unemployment and financial exclusion. That's the upshot of a report - Role of Microfinance in Western Europe: A Paradigm Shift - published by the research and advisory firm Celent.

The report explores the role of MFIs in Europe, and analyzes major markets, including France, Italy, Spain, Germany and the United Kingdom. It illustrates how despite being late to the game, interest in microfinance has grown in Western Europe as increasing unemployment has spurred interest in small business enterprises and financial exclusion.

Role of Microfinance in Western Europe: A Paradigm Shift also discusses new players and solutions for peson-to-person (P2P) lending, predicting that the P2P lending in Western Europe will reach will 74 Million Euros ($100.8 Million) by 2012, representing an increase of about 77% over 2009 lending (which was 57 Million Euros).

"P2P online lending addresses a similar market demand (e.g. SMEs, individuals) with smaller loan sizes and could become a complementary solution to the existing European microfinance structure," explained Prathima Rajuan, a Celent analyst and author of the report. "P2P lending players operate with a social motive, lending to needy individuals or borrowers who are otherwise not qualified for personal loans from banks."

53% of adults, worldwide, are unbanked

_{-Financial Access Initiative}