EUROPE / THE MEDITERRANEAN. Mohammed Yunus’s theories on microfinance are rooted in the European Investment Banks’ practices. In one of its pamphlets devoted to the subject , the EIB believes that it had a historical role in the implementation of finance solutions for microbusinesses, SMEs and for low income groups.
Out of €61bn in loans for 450 projects in 2011, the financial institution granted €548m to
"funding roughly 60 projects that are either intermediate or related to microfinance",
particularly in the Mediterranean and in Europe. Since 2003, the institution has supported microfinance to the tune of €881m.
Although the share of EIB funding for microfinance remains limited (0.9% of its commitments), its positive effects have been found across the world.
With loans, equity investments, guarantees, but also technical assistance funds, the European bank "supports microfinance operations with its own funds and by using other sources of funding…through managing programmes on behalf of EU Member States and the European Commission."
In the Mediterranean, the European bank is the "third largest microfinance supporter" with €22.2m of direct funding to microfinance institutions since 2003: in Egypt (€2m to the Dakhalya Businessmen's Association for Community Development), in Lebanon (€1.5m to Al Majmoua), Syria (€2m to the First Microfinance Institution) and in Tunisia in particular (€4m to ENDA Inter-Arabe).
The Provence-Alpes-Côte d'Azur region in France benefits from these microcredits
In the PACA (Provence-Alpes-Côte d'Azur) region on French soil, the European Investment Fund announced on 24 January 2013, €1m in funding for the “Institut de Microfinance (IMF), Créa-Sol”. The EIB’s last loan of €1m to the IMF has already led to the creation of 164 jobs out of 134 companies financed.
For the project to be credible, feasible and profitable, Créa-Sol must put faith in entrepreneurs whom for the most part, have modest means.
Thanks to a loan of €3,000, Jean-Luc Dulaurier - victim of an accident in a cleaning company – has been able to swot up on his idea of creating emergency first aid kits from recycled and recyclable cardboard. Meanwhile, thanks to the award of a microcredit, Marc Low has been able to "secure cash flow" for his HR company "in case of hard times and in a fragile economic environment." And Mamadou Konaté has had “his dreams” come true by receiving a credit that an ordinary bank did not afford him, and creating his own line of sportswear.
These new EIB initiatives could quell the complaints of some NGOs that accuse it of not playing a significant enough role as a development bank and instead of only supporting large multinationals.