ACCION Europe? Sign me up.
This just in from Jesse Hilenski in the Atlanta office:
If I kept a monthly journal (which I don’t), my entry for June 2009 would probably swallow up half of my space for July. My employer, ACCION USA, announced an industry-changing partnership with a highly respected member of the microfinance community, Kiva; my baseball team, the Atlanta Braves, made an ignominious swan dive into the sea of mediocrity; and my idol, the King of Pop Michael Jackson, passed away under the most curious of circumstances, further tarnishing the legacy of one of the most entertaining human beings to ever walk on this planet. All of these things, however, would fill less space than the two-week, lightening-tour of Europe I took with my girlfriend to celebrate her graduation from Emory University. From June 7th to the 20th, she and I went to eight different countries, took close to 1,000 pictures, and burned probably 1 million priceless memories into our brains that will stay with us for the rest of our lives.
Even in the midst of all this European bliss, however, my mind could not stray far from the subject of microfinance and its exciting future. Over the past 20 years, microfinance has proven it can succeed in developed economies like that of the United States. ACCION USA alone has disbursed close to $117 million in loans since 1991, with an over 90% repayment rate. Success like that drove Kiva to expand its unique online lending program into the U.S. market in conjunction with ACCION USA. So if microfinance can work in both the developing and developed worlds, what’s the next step in its evolution?
While I was in Europe, going from place to place, I wondered how the countless small businesses we encountered along the way, selling water and t-shirts and panini on old town squares, were financed. As it turns out, more and more small businesses in Europe are turning to microfinance institutions (MFIs) for their funding than ever before. According to the European Microfinance Network, MFIs across the EU disbursed 42,750 loans in 2007, a 14% increase from 2006. In fact, microfinance appears to be growing fastest in Western Europe, the region Jess and I were traveling through most. In 2007, the two European countries which saw the biggest increases in microloans disbursed were France and Germany, with 24% and 31% increases, respectively.
Despite these astonishing increases in output, it seems as though microfinance in Europe (and the developed world as a whole) is still just barely scratching the surface of its potential. There are around 25 million small businesses in the EU, 91.5% of which are microenterprises with less than 9 employees, according to Evers-Jung, a German Bank Consultancy and Research Company. To compare, there are 22 million microenterprises in the United States, and the Aspen Institute claims that over half of these lack adequate financing and/or training.
Given such a large market to lend to, it appears entirely possible that the growth witnessed in 2007 across the European and American microfinance sectors could be maintained or increased. While the global financial meltdown makes such a prospect harder to believe in 2009, global microfinance has proven over the past four decades to be in it for the long haul. And count me in.
June 20th, 2010 at 11:23 am
I miss MJ very much.. Still can’t beleive he’s gone..