Microfinance in Germany and Europe: Market Overview and Best Practice Examples

Insights from successful microfinance initiatives in Europe
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This article presents an overview of microfinance initiatives in Europe, and discusses the functioning and structures of successful programs in the region. The importance of microfinance in Europe has been growing in recent years. A young sector with diverse actors, its steady growth serves the socially excluded and unemployed people as well as microenterprises. The sector requires development subsidies and its operational performance is difficult to assess. Other challenges include expanding outreach, improving operational performance and attaining sustainability. Microcredit is the main financial service offered, and the European microcredit market demonstrates high potential. Recommendations to enhance microfinance sector development in Europe call for:

  • Significant changes in the regulations of European Union members states;
  • Proactive measures by microcredit providers in understanding potential and actual demand for microcredit;
  • Strategies that ensure adequate supply of appropriate products and non-financial services to the market;
  • Growth in the role of mainstream banks in the microfinance sector.

About this Publication

By Guichandut, P., Underwood, T., Evers, J., Lahn, S., Mark, K., Tilleßen, P., Nowak, M., Jaczewski, K. & Abel, S.