Insights into the European Code of Good Conduct for Microfinance

At the request of the European Commission (DG EMPL), the Microfinance Centre (MFC), in collaboration with EMN, conducted a survey to gather feedback from microfinance institutions (MFIs) on the European Code of Good Conduct (ECoGC). A total of 24 responses were collected and presented to DG EMPL in March, providing insights into the current situation and areas for potential amendments.

Why Is This Important?

Endorsing or signing up for the Code is a prerequisite for microcredit providers seeking EU funding under the EaSI financial instruments and the InvestEU Social Investment and Skills window.

Key Recommendations from MFIs:

📌 Code Content – revisiting the Code to reflect market realities, reducing excessive clauses, and improving alignment with existing regulations and support programs.

📌 Certification Process – simplifying the process, possibility of conducting certification in stages, clearer timeframe, introducing levels of available certification based on institution’s type and resources, separate processes for banks, NBFI, social finance providers)

📌 Renewal Process – standardizing the format to focus on changes and follow-ups on previous recommendations

📌 Certifying Institution – increased number of certifying institutions (e.g. introducing regional certifying institutions) – although the recommendations regarding the adequate number of certifying institutions were not unanimous, less rigid interpretation of Code’s clauses, more flexibility)

📌 Other Recommendations – creating a centralized database with mandatory annual data provision from certified institutions and allowing non-EU organizations to apply under specific conditions.

We sincerely thank all the organizations that provided feedback: Adie, AFI, Agro & Social Fund, Artigiancredito, Asociatia C.A.R.Retezatul, Aurora, Bizkaia, BT Mic, Cresaçor, Confeserfidi, FED Invest, FINBEE, FLEXIDEA, FONDI BESA, Lithuanian Central Credit Union (LCCU), Microlux, Mikrofunden, Nantik Lum, OMRO, SIS Credit, Slovene Enterprise Fund, Qredits, TISE, USTOI.

MFC’s Role & Next Steps

MFC has been actively engaged in the Code’s development from the very beginning, advocating at the EU level to ensure that MFI perspectives and evolving market conditions are considered.

Looking ahead, the European Commission aims to expand adherence to the Code, ensuring that at least one MFI per country complies and promoting greater transparency by requiring MFIs to disclose annual reports, financial statements, impact evaluations, and other key data.

Stay tuned for updates as we continue working to enhance the European microfinance ecosystem.