From Exclusion to Inclusion through Microfinance: Critical Issues

This report presents recommendations from a project that aimed to overcome social and financial exclusion in the European Union (EU) by sharing the experiences of three networks: the Microfinance center (MFC), the European Microfinance Network (MFN) and the Community Development Finance Association (cdfa).

The project specifically aimed to:

• Raise awareness about the benefits of microfinance amongst policymakers,
• Increase awareness about the tools that microfinance practitioners use to respond to the needs of excluded people,
• Identify the constraints and opportunities of reaching out to excluded people.

The project makes several recommendations:

• For policy makers:
  • Recognize that microfinance is a key tool in increasing employment and helping people move out of poverty and exclusion;
  • Support the use of microfinance for a variety of services, not just credit;
  • Work to encourage cooperation between EU member countries, NGOs and private corporations to harness efforts to overcome exclusion.
• For practitioners:
  • Develop a wide range of services and products relevant to the needs of low-income people;
  • Develop organizational capacity to understand and use indicators in established and emerging assessment frameworks;
  • Create a culture of innovation that can respond to the changing needs of the market.
• For networks:
  • Promote the creation of a favorable microfinance environment at EU and member state levels;
  • Develop partnerships among EU states, NGOs and private corporations;
  • Promote the understanding of microfinance among stakeholders.