EIB involvement in the microfinance industry
The EIB is committed to taking part in an efficient manner in microfinance operations that demonstrate enhanced social and environmental policies, impact and added value.
The Microfinance Centre of Expertise (MCE) provides a knowledge-sharing platform for all EIB professionals involved in microfinance operations. With respect to following industry trends and best practices, the MCE has participated in several industry-wide initiatives to complement its skills and raise its profile as an advanced stakeholder in the microfinance industry.
Demonstrating EIB’s transparency, funding efficiency and responsible commitment in microfinance
- Participation in the Smart Aid for Microfinance Index
According to 2011 SmartAid external evaluation exercise, the EIB has “good” systems in place to support microfinance.
The SmartAid Index for Microfinance was created by the Consultative Group to Assist the Poor (CGAP), the multi-donor policy and research centre dedicated to advancing financial access for the world’s poor. The SmartAid Index measures the efficiency of institutions involved in designing and delivering microfinance projects
- Participation in the annual CGAP Funder Survey
As a major funder of the microfinance sector, the EIB group yearly participates in the CGAP Funder survey of its microfinance portfolio. It provides useful benchmarks and trends as compared to the 20 largest microfinance funders. Click for the 2011 snapshot.
- Endorsement of the Client Protection Principles for microfinance
The EIB Group endorses the Client Protection Principles for microfinance (CPPs) in order to promote the implementation of socially responsible standards and practices throughout the microfinance industry. These principles are designed to protect MFI clients from potentially harmful financial products and ensure that they are treated fairly. They promote the adherence of MFIs to seven pro-consumer principles (Appropriate product design and delivery; prevention of over-indebtedness; transparent and responsible pricing, etc…)
The seven socially responsible principles are fully integrated into the Bank’s procedures and represent a guideline for any investment decisions. The EIB is actively encouraging the adoption and strict implementation of the principles from all its intermediaries.
Participation in the governance of support organisations
The EIB is founding member of the European Microfinance Platform and participates in its governance since inception.
In 2011, the EIB also became a charter member of Luxflag, the labelling agency for microfinance and environmental funds, and is represented on its Board of Directors.
Supporting microfinance events
The EIB group regularly supports some of the major microfinance conferences, through sponsorship and high profile presentations, that are relevant to its activities and objectives of strengthening the sector.
- European Microfinance Week and the European Microfinance Awards
The EIB Group supports of the European Microfinance Week, a yearly conference which brings together in Luxembourg a large number of microfinance stakeholders. The event is organised by the European Microfinance Platform (e-MFP), a network promoting the collaboration, coordination and innovation amongst European microfinance practitioners and stakeholders working in developing countries.
Since 2008, EIB has also hosted in the European Microfinance Award, a bi-annual award organised by the Government of Luxembourg in collaboration with e-MFP, and has been part of the selection jury.
The ACP department has been supporting the annual event since 2010. The Forum aims to increase overall transparency in the sector, and the event aims to facilitate contacts between microfinance investors and rated African MFIs.
The European Investment Fund regularly participates to the major microfinance conferences in Europe such as the European Microfinance Network (Amsterdam,2011); and the Microfinance Center Conference (MFC) that was held in 2011 in Prague.
Contributing to sector knowledge research and sharing:
The EIB University Research Sponsorship Programme provides grants to EU university research centres working on research topics and themes of major interest to the Bank. The EIB sponsorships, of up to EUR 100 000 per year for a period of three years are awarded through a competitive process to interested university departments or research centres.
For the academic year 2011/2012, the EIBURS programme will be financing three lines of research, among which one line will be dedicated to microfinance: “The rising of credit risk in microcredit: origins, warning signals, current state and future prospects”. The research will be conducted by Université Paris 1 Panthéon-Sorbonne, as a result of a tendering process.
The EIB Group sponsors feasibility and market studies to support and increase the efficiency of its projects. In view of our prominent role in the microfinance fund industry, we co-sponsored the “The State of microfinance Investment 2011” conducted by MicroRate.
2009, the EIB Group funded a study on incorporating foreign exchange risk in the financial model of the Regional MSME Investment Fund for Sub-Saharan Africa (REGMIFA).
The EIF also commissioned a feasibility study on the microfinance market in the European Union, the findings of which provided background information for a Working Paper entitled “Microfinance in Europe - A market overview”.
EIF’s department Research & Market Analysis published the EIF Working Paper n. 13: "Progress for Microfinance in Europe” . This analysis provides updated and additional information about the European microfinance market and current developments in the microfinance area. Moreover, it gives insights into the intervention logic, rationale for EU support, and mandate development considerations of the EIF in this field. The EIF Working Paper Series has been designed to make available to a wider readership selected topics and studies in relation to EIF´s business. The Working Papers are edited by EIF´s RMA. They are typically authored or co-authored by EIF staff and are usually published only electronically.
Microfinance is also addressed in some general publications relating to SMEs in Europe, such as in the European Small Business Finance Outlook. An article about “Microfinance in Europe” can be found in the APS Bank book (page 49-86)
In 2007, we financed and prepared on behalf of Sanabel, the microfinance network of Arab countries, a Review of the economic and social impact of microfinance in the Mediterranean region. It was presented at the FEMIP Conference on Microfinance in May 2008.