Fabiha Enam Id: 1001666
Submitted in partial fulfilment of the requirements for the Degree of Masters in Social Science
Major Subject: International Business & Entrepreneurship
University of Glasgow Glasgow, United Kingdom August, 2011
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This thesis came to be largely through the friendly cooperation received from microfinance institutions across Europe. I am grateful to the European Microfinance Network and its members for their open hearts and their eagerness to see the fruits of their collaboration with me. My supervisor, Dr. Duncan Ross, has seen this project develop from its very beginnings to its very end. His enthusiasm about the topic I chose to research and his support of the conclusions I began to draw motivated and comforted me throughout the thesis writing process. In our meetings, he helped me to refine my thinking about the topic, to find the right questions to ask, and to produce the best dissertation I could. I also extend my gratitude to the following people who kindly assisted me on my research journey: Daniel SORROSAL European Microfinance Network Ian BEST Community Development Finance Association Lars HEKTOEN Cultura Bank Martin FERRY Prince‘s Scottish Youth Business Trust Maria DOICIU Eurom Consultancy Eva FARAGÓ Fejer Enterprise Agency Pauline IRWIN O’TOOLE First Step Vedrana FERRI LOKMIKRA Joyce Kimwaga LUNDIN NEEM - Network for Entrepreneurs from Ethnic Minorities David SCHURJIN ACAF (The Association for Communities) Self-Financed
Gill MUSK The International Association for Community Development
I learned an immense amount from them through interviews. My dissertation aims to represent the information I collected in order to paint an accurate picture of the microfinance industry in several countries. Lastly, I would like to show my gratitude to my family and friends for their constant motivation and support throughout the process.
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LIST OF ABBREVIATION ACAF: The Association for Self-Financed Communities BRAC: Bangladesh Rural Advancement Committee CDFA: Community Development Finance Association CDFIs: Community Development Finance Institutions CEE: Central and Eastern Europe CGAP: Consultative Group to Assist Poor EIF: European Investment Fund EMN: European Microfinance Network EU: European Union IACD: The International Association for Community Development JASMINE: Joint Action to support microfinance institutions in Europe JEREMIE: Joint European Resources for Micro to Medium Enterprises MFIs: Microfinance Institutions NBFI: Non Bank Financial Institution NEEM: Network for Entrepreneurs of Ethnic Minorities NGO: Non Government Organisation PSYBT: Prince‘s Scottish Youth Business Trust UK: United Kingdom
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ABSTRACT This study explores the traits of microfinance industry in Europe. It emphasizes on the differences within the industry between Western and Eastern Europe along with the current challenges and issues that it is facing currently. It entered the European market in late 1980s but the industry experienced a remarkable growth from 1997 till now. Still in many countries microfinance is struggling with its own identity. The paper discusses the microfinance as a whole and also within the countries. There are several key issues have been identified through the study such as perception of the business within the regions, government involvement, competitiveness, threats and challenges etc. The industry is analysed through secondary and primary research in the paper. One of the major research findings is - Western Europe microfinance institutions (MFIs) are more engaged in social development whereas financial development is the main agenda for Eastern European MFIs. Sustainability is still the biggest challenge for the industry, next to the good social performance. Social investors are the main sources of funding in Western region while...