Devfinance: Re: When in Rome?: An invitation to IDLO's dialogue on law and microfinance

[Peter van Dijk-3]

Thank you for the info Karl and hope you will share info i t future; you never know, many MF experts in Latin America, Asia and Africa can in the future work as consultants in Western Europe (and in the USA even maybe).

One additional remark that is based on my work with the European savings banks in the mid-nineteen nineties. In nearly all western European countries governments had over time micro-enterprise support programs with loan components. When they found that governments were not good at the job and it resulted in abuse, misappropriation, unsustainable businesses and high costs (per job created) many requested commercial banks to continue the programs. When banks observed that problems and challenges with the subsidised political programs 'infected' their core business, they ended the programs when subsidies ended.

Wonder where the EU Microfinance trucks will drive on to .....

Success and kind regards, Peter


--- On Tue, 11/3/09, Karl Dayson <K.T.Dayson@...> wrote:

> From: Karl Dayson <K.T.Dayson@...>
> Subject: Devfinance: Re: When in Rome?:  An invitation to IDLO's dialogue on law and microfinance
> To: "Development Finance" <devfinance@...>
> Date: Tuesday, November 3, 2009, 7:30 AM
> Dear Peter and Jamie,
>
> You're both nearly right.
>
> 1, DG Enterprise and Industry is also interested in
> European microfinance (as are DG Regions) and they'll be
> publishing work on the relationship between microfinance and
> banks shortly. The EU project will be run through JASMINE
> (Joint Action to Support Microfinance Institutions in
> Europe)  and involves EIB and EIF.
> 2, Generally the EC would like to see more sustainable
> microfinance institutions but understands there's a balance
> to be struck. In addition a number of member states have
> caps on interest rates that rule out true financial
> viability. Thus the questions are around finding ways to
> maximise efficiency even though it may not be possible to
> make it totally self-sustaining
> 3, There isn't a single European way for microfinance but
> crudely put those in Eastern Europe tend to be focused on
> sustainability ( partly post-Cold War capitalist institution
> building) and those in the west on social inclusion. In
> addition, at least one nation has tried, with some success,
> to engage the mainstream banks in the delivery of services.
>
> 4, The UK is different again (a depressing reoccurrence) as
> it looked to the USA. So it uses the language and arguments
> of CDFIs and rarely uses microfinance. The UK govt has to
> date believed in sustainability  first and is relaxed
> about much larger average loan sizes (the sector also has a
> venture capital CDFI)
> 5, I'm not sure the banks opposed microfinance but the EU
> has strict rules on unfair competition and organisations in
> receipt of EU and state support have a minimum rate they
> must charge.
> 6, There is a recognition that there are many lessons to be
> learnt from the developing world (there's something rather
> pleasing about a social policy initiative coming to the
> developed world) though not everything is transferable
> 7, EMN is the main vehicle for microfinance in Europe. IMHO
> its an incredibly well-run operation and has worked
> tirelessly to ensure the sector's voice is heard in
> Brussels. I've also been impressed with the engagement of
> the  Commission and their willingness to listen and
> reflect. 
>
> So I'd agree that in Europe there's a strong social policy
> impulse to much of the microfinance activity, though with a
> recognition that efficiency and efficacy matter.
>
> I hope this is useful
>
> All the best
> Karl
>
> P.S. With colleagues from Foro Natik Lum in Madrid we've a
> book on European microcredit due out early next year.
>
> Dr Karl Dayson
> Director of Sociology
> Community Finance Solutions
> University of Salford
> M5 4WT
> tel: [phone]
>
>
>
> -----Original Message-----
> From: Development Finance on behalf of Jami Hubbard
> Sent: Mon 11/2/2009 16:15
> To: Development Finance
> Subject: Devfinance: Re: When in Rome?:  An invitation
> to IDLO's dialogue on law and microfinance
>  
> Hi Peter, I will look for the exact language, but I think
> the EU internal goals are to combat unemployment and
> increase social inclusion of marginalized groups (youth,
> migrants, women) ... will revert tomorrow.
> Best,
> Jami
>
> -----Original Message-----
> From: Development Finance [mailto:devfinance@...]
> On Behalf Of Peter van Dijk
> Sent: Monday, November 02, 2009 5:06 PM
> To: Development Finance
> Subject: Devfinance: Re: When in Rome?: An invitation to
> IDLO's dialogue on law and microfinance
>
> Dear all,
>
> It is wonderful and surprising at the same time that the EU
> has an interest in Microfinance as it is undertaken outside
> of the European Union.
>
> The EU makes a clear distinction in Microfinance:-
>
> 1. MF as a tool to fight social inclusion within the EU
> with subsidised loans to specifically targeted people
> (women, youth, unemployed, etc.). These activities are a
> part of the Social Development DG of the European Commission
> and
>
> 2. MF as a tool to build inclusive financial sectors
> outside of Western Europe.
>
> The two different sectors have two separate fora, The
> European MF Platform (www.e-mfp.eu) is an association of
> donor agencies that define MF as a tool for building
> inclusive financial sectors in 'developing countries'
> (including the central European 'transition economies'). The
> European MF Network (www.european-microfinance.org) promotes
> microlending to marginalised citizens in Europe.
>
> If I am not mistaken this clear distinction is also the
> result of opposition from commercial banks in the EU and
> maybe their regulators who want to avoid inappropriate use
> of financial terms that are legally protected and want to
> avoid unfair competition (by social microcredit
> organisations that offer 'zero interest rates' on loans such
> as ADIE promotes its activities in France).
>
> I hope that IDLO and the participants understand the
> implications of the above distinction and I look very much
> forward to a report on the discussions and the
> recommendations / next steps.
>
> Kind regards, Peter
>
>
> --- On Mon, 11/2/09, Miller, Calvin (AGSF) <Calvin.Miller@...>
> wrote:
>
> > From: Miller, Calvin (AGSF) <Calvin.Miller@...>
> > Subject: Devfinance: When in Rome?:  An
> invitation to IDLO's dialogue on law and microfinance
> > To: "Development Finance" <devfinance@...>
> > Date: Monday, November 2, 2009, 8:05 AM
> > ?
> > Message
> > 
> > 
> > 
> > Posted on behalf of Jami Hubbard,
> > IDLO.
> > 
> > Calvin
> >
> > Miller,
> > FAO
> >
> >   
> >     
> > Hello DevFinance
> >     Members,
> >
> > Please find attached in invitation to an upcoming law
> &
> >
> >     microfinance event in Rome.
> >
> > The topic of this dialogue on Thursday
> >     afternoon, Nov. 12th will be
> microfinance: 
> > legal and regulatory
> >     lessons learned in developing
> countries to be shared
> > with the EU
> >     microfinance sector.  The
> EU has created a 100
> > m  euro fund to
> >     support MF as a tool of social
> inclusion and to combat
> > unemployment (which
> >     is rising rapidly in the Euro
> zone).  Last night
> > on the EU news
> >     channel, they interviewed a
> banker from the EIF and
> > announced that there was
> >     an ongoing discussion of
> increasing the fund to $150 m
> > to meet an estimated
> >     demand of roughly that in the
> EU.  Because many
> > developing countries
> >     have more mature microfinance
> sectors than most of
> > Europe, we believe that
> >     there are experiences worth
> sharing (though
> > cooperatives have been here for
> >     hundreds of years, and some
> good examples continue to
> > thrive, microfinance
> >     is a  new concept for
> most of the EU which it has
> > expressed a
> >     particular desire to
> support).
> >
> > IDLO has been involved in the
> >     microfinance sector for a
> fairly short time:
> > noting the dearth of
> >     informed legal professionals
> working in the industry in
> > 2005, we launched
> >     seminars, video conferences
> and research activities
> > designed to enlarge the
> >     community of legal
> professionals who understand the
> > objectives of
> >     microfinance institutions; and
> who can advise the
> > industry on the impact of
> >     existing domestic commercial
> law and regulations on the
> > provision of
> >     financial services to the
> poor.
> >
> > Lawyers are also natural advocates,
> >     both for the MF sector at
> large, as well as for the
> > rights of the
> >     consumer.
> >
> > We invite you to attend this dialogue followed by
> social
> >     networking (and snacks) to
> meet legal professionals
> > from Argentina, Ecuador,
> >     Colombia, Venezuela, Kosovo,
> Tanzania, Uganda, Kenya,
> > Sri Lanka, India,
> >     Cameroun, the DRC, Rwanda,
> Nigeria, Nepal and the US
> > (me) and
> >     more.
> >
> > Bring your legal problems (related to microfinance),
> and we
> >
> >     will try to connect you with
> someone who can help.
> >
> > Event details and
> >     venue are attached to this
> message, and feel free to
> > contact me with any
> >     questions you may have, or if
> you would like to
> > participate as a
> >     speaker.
> >
> > Kind regards,
> >
> > Jami Hubbard
> > Manager Microfinance
> >     & Legal Counsel
> > International Development Law
> >     Organization
> >
> > Viale Vaticano, 107
> > Rome, Italy
> >     00165
> > www.idlo.int/microfinance
> >
> > --------------------------------?
> >     Responsible Regulation:
> Lessons
> > and Innovations in
> >     Microfinance from the
> Developing World
> >
> >     Rome
> >     Thursday 12 November, 2.30 -
> 6.00 pm
> >
> >     Residence Ripetta , Via di
> Ripetta 231
> >
> >     A cocktail reception will
> follow
> >
> >     The Conference will be in
> English. Simultaneous
> > translation
> >     English/French will be
> available
> >     La conférence aura lieu en
> anglais, avec traduction
> > simultanée en
> >     français
> >     Welcome Address: Thomas
> >     McInerney, IDLO Director of
> > Research and Policy
> >     
> >     Jami Hubbard, IDLO Manager of
> > Microfinance Program
> >     
> >     Guest Speakers:
> >     Deborah Burand, Professor,
> Faculty of
> > Law, University of
> >     Michigan
> >     Simone Di Castri, Policy
> Analyst, CGAP
> >     
> >     April Rinne, Director, Water
> Credit,
> > water.org
> >     
> >     Claudio Gonzales Vega,
> Director
> > Rural Finance Program,
> >     Ohio State University (tbc)
> >     Eduardo Jimenez, Microfinance
> Consultant,
> > Bangko Sentral, the
> >     Philippines
> > 
> >
>
>
>      
>
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