Microfinance in Europe and Its Outreach to Target Groups

This survey gathers data from 170 European microfinance providers as part of the European Microfinance Network bi-annual survey “Overview of the Microcredit Sector in the European Union 2008-2009.” The survey examines microfinance providers targeting and mission statements, their lending rates over time, and their level of transparency regarding lending to specific population groups. The survey shows that European MFIs primarily aim at microenterprise promotion and job creation, followed by social inclusion, poverty reduction, financial inclusion, and empowerment of women and minorities. Findings include:

• Microfinance providers' principal target groups are people excluded from mainstream financial services, women, immigrants/ethnic minorities, and unemployed people;
• Actual microlending rates to specific target groups lag behind targets and mission statements;
• Variations exist among countries regarding their targeted lending;
• NGOs and foundations are most engaged in providing services to specific target groups.

The study recommends that European microfinance providers need to make increased efforts to collect information on lending to specific target groups. This needs to go together with increased data collection on social performance indicators to ensure that microfinance providers reach out to excluded target groups in line with their mission.