WRITTEN QUESTION E-1547/00 by Mark Watts (PSE) to the Commission. Microfinance and poverty reduction.
Date: 2000-05-18
Institutions: European Parliament, Provisional data
Subjects: EU financing, microfinance, poverty

C 103 E/14

Official Journal of the European Communities

EN

3.4.2001

(2001/C 103 E/013)

WRITTEN QUESTION E-1547/00

by Mark Watts (PSE) to the Commission

(18 May 2000)

Subject: Microfinance and poverty reduction

Will the Commission please state what funds have been committed by the EU for the expansion of
microcredit as part of the fight against poverty?

(2001/C 103 E/014)

WRITTEN QUESTION E-1609/00

by Elspeth Attwooll (ELDR) to the Commission

(29 May 2000)

Subject: Microcredit

Following Commissioner Nielson(cid:146)s commitment to focus on policy in the field of microcredit, can the
Commission please explain what action has been taken in this area since the new Commission started its
work?

How is the Commission ensuring that the proceedings of applications for microcredit funding is swift and
efficient?

Joint answer
to Written Questions E-1547/00 and E-1609/00
given by Mr Nielson on behalf of the Commission

(12 July 2000)

The Community plays an active role in financing activities in this field. A survey carried out last year
estimated that € 214 million were committed for projects in microfinance, including activities carried out
by non-governmental organisations (NGOs) during 1995-1999. This is, however, an estimate. The figure
may be significantly higher because microcredit is an integrated part of many different activities, especially
in rural development projects and women targeted activities. As to the actual spending on an annual basis,
the Commission is unfortunately at this stage not able to report a concise figure.

The Commission approach is going through a process of revision. Based on evaluations of interventions in
the field of micro-credit, the Commission has started a process of rethinking its previous approaches. This
followed the ongoing debate in the donor community on the so called (cid:145)microfinance revolution(cid:146). It
published in 1998 a communication to the Council and the Parliament on microfinance and poverty
reduction (1) and methodological guidelines.

This new approach underlines the importance to address in a more integrated, sustainable way the
different financial needs of the majority, and not only the credit dimension previously emphasised in
micro-credit schemes. In the past this dimension often led to inefficient interventions, market distortions
and the spreading of the culture of indebtedness, without significant, sustainable impact in terms of
poverty reduction. In this new perspective, particular attention should be devoted to the institutional
strengthening and capacity building of microfinance institutions and NGOs presently dealing with
microfinance, to support their process of professionalisation and institutionalisation.

Finally, the overall reform package adopted by the Commission on 16 May for the management of
external aid is expected to have a positive influence on the efficiency and speed with which financing
decisions, including those concerning micro credit, can be processed.

(1) COM(98) 527 final.