The 21st Annual Conference of the European Microfinance Network (EMN) took place at Bucharest after two days of public speeches and debates on the mission, scope, and tools of microfinance in a world defined by rapid technological advances, the threat of climate change, war, and political turmoil.
The 21st Annual Conference of the European Microfinance Network (EMN) ended today in Bucharest after two days of public speeches and debates on the mission, scope, and tools of microfinance in a world defined by rapid technological advances, the threat of climate change, war, and political turmoil.
About 300 participants from more than 20 countries took part in the proceedings of the Conference on 20 and 21 June. (The previous day, 19 June, was mostly reserved for restricted access events like EMN’s General Assembly.) Among those present were representatives of the European Commission, UNESCO, the European Investment Fund, the European Investment Bank, the Council of Europe Development Bank, and the National Bank of Romania, as well as microfinance practitioners, NGOs, entrepreneurs, bank executives, and representatives of the academia.
Throughout the event, the guests debated issues like the role of social entrepreneurship, microfinance as a support tool for young entrepreneurs, how non-financial services can strengthen financial health and resilience of micro enterprises, microfinance and sustainable agriculture, empowering women entrepreneurs, the current status of Romanian microfinance, and the role of the microfinance in the fight against climate change.
„Microfinance is a means to tackle social injustice”, says Jorgos Papadakis, European Microfinance Network Managing Director. “Our duty as a leading voice of the microfinance sector in Europe is to convince the new European Commission, as well as the leadership of EU’s financing instruments, that investing in microfinance makes sense and can change the lives of people, especially young people. People are rightfully angry and they are increasingly choosing to vote for extremists. Through microfinance we can improve people’s financial standing and change their mindset for a more inclusive society.”
“Maria Nowak, the pioneer of microfinance in Europe, once said: Microcredit has become the goal of my life – to help men and women regain confidence in themselves and the future. My vision and the vision of EMN are to stick to this vision and purpose. And Romania provides us with an excellent opportunity to do just that”, says Jorgos Papadakis.
According to Raluca Andreica, a member of the Board of Directors of the Microfinance Association of Romania, “the Romanian microfinance sector is a top performer in the region, demonstrating strong stability even through the pandemic years. But there is still some work to do, especially from a regulatory standpoint, given that in Romania microfinance organizations are subject to the same rules as most other NFIs. This entails unnecessarily strict collateral requirements, which makes access to microloans more difficult, for example, for small farmers who badly need it. We would be happy to expand our excellent collaboration with the National Bank of Romania to develop a specific regulation framework for microfinance.”
The Microfinance Association of Romania was a co-organizer of EMN’s 2024 Annual Conference. AMF has 169 member organizations. In Romania, the gross microcredit portfolio was 644.69 million euros at the end of 2023, with over 116,800 active clients. In the five-year period between 2019 and 2023, the microcredit portfolio recorded grew by about 80%.
Several broad themes emerged from the guest speakers’ presentations and panel discussions.
One such issue was the untapped entrepreneurial potential in the European Union, especially in the context of microfinancing as a tool for social inclusivity and driver of economic growth. As an example, one of the keynote addresses given at the event quoted the OECD-EU “Missing Entrepreneurs” 2023 report released at the end of last year. According to the report, if everyone were as active in business as men aged 30 to 49, there would be 7.5 million more entrepreneurs in the EU and 34 million more in all OECD countries. These “missing entrepreneurs” might be found among categories that have been long – and unfairly – overlooked, like people living in rural areas, women, migrants/refugees, the unemployed, and the disabled. Empowering these categories, providing them not only with access to funding, but also with non-financial services like business mentoring or financial literacy training, could be a major driver of economic growth in the next decade and beyond.
The need for more inclusion – particularly in terms of access to finance and growth opportunities – was also a recurring topic. One of the ideas put forth during the “Youth in Microfinance” panel discussion was the creation of an EU-wide entrepreneur exchange program modeled after the Erasmus program, one of the most successful transnational cooperation initiatives implemented in the European Union. An Erasmus-type exchange program that would expose entrepreneurs to in-depth training, knowledge resources, mentorship, and various business experiences, could conceivably also include underserved beneficiaries like prospective entrepreneurs who live in rural areas, thus contributing at stemming the brain drain.
A third salient issue was the need for financial literacy among beneficiaries. One proposal put forth at the event would tie loan eligibility to the obligation of the borrower to take a financial literacy course. This would be complemented by other non-financial support measures like providing business mentorship services. The concept of effectuation – making use of existing assets, know-how, and abilities, on top of what is provided by MFIs – would round off such a support framework for small entrepreneurs.
About the European Microfinance Network
The European Microfinance Network (EMN) is a member-based not-for-profit organisation based in Brussels, which promotes microfinance as a tool to fight social and financial exclusion in Europe through self-employment and the creation of microenterprises.
The organisation’s mission is to facilitate capacity building and advocate on behalf of the microfinance sector. EMN’s core membership is made up of microfinance practitioners, organisations with a social purpose that deliver financial services to the underserved or facilitate access to such services.
EMN has 86 members from 22 countries and operates through four working groups and committees, and is itself, or has been, a member in 11 institutional partnerships.