The study Assessing the European market potential of business microcredit and the associated funding needs of non-bank MFIs depict a huge potential demand for small business loans across the EU-28 members states and the dynamism of a sector that needs adequate support to ensure a wider outreach to the underserved to deliver on its mandate to improve social and financial inclusion. The study was prepared by the European Microfinance Network (EMN) and the Microfinance Centre (MFC).
What stands out from the study is an estimated non-bank MFI market size of around 260.000 business loans per year in 2020 representing a total market value of nearly 1,15 bn EUR. Based on this projection the total annual funding needs of the non-bank MFI sector from 2020 forward can be estimated as follows:
• Debt funding: 1,15 bn EUR in senior loans is needed for on-lending.
• Funding external risk-sharing: an annual need of around 100m EUR in portfolio guarantees.
• Provision of non-financial services: an annual need of around 100m EUR in grants/subsidies to provide at zero cost to the client.
The full set of results and the detailed methodology behind these figures can be consulted in the study.
The study was prepared in cooperation with European Microfinance Network (EMN) and was commissioned to evers & jung with the aim of supporting the European Commission in the process of designing the microfinance support for the next multiannual framework and provides the top-down assessment of total market potential for business microcredit in EU-28. The results of the study are complemented by an approximation of total volume of potential demand, an estimation of the market outreach by non-bank MFIs in different target groups and an estimate of the sector’s funding needs by 2020.