Three and a half years after it was set up, microStart has just granted its 1,000th microloan. The loan recipient, Mehmet Eler (aged 20), opened his snackbar on 13 June in Maldegem. He is quite a typical microStart client. He found it difficult to get a job and then looked in vain for financing to set up his own business.
Mehmet received a loan of €15,000 from microStart plus free advice and support. This micro-entrepreneur is typical of the kind of people microStart was intended to help.
Very often their ambition is to set up a shop or a small company that requires little investment but in Belgium they often encounter difficulties over and above the struggle to obtain credit. To set up a business you must for example be able to demonstrate some basic business management knowhow. However the single biggest obstacle is the immediate loss of social welfare payments just at the very moment when they are facing a whole range of expenses and have to start paying a higher level of social security contributions.
microStart: a civic initiative that is good for the economy
The primary aim of microStart is job creation, but its effects certainly help to combat poverty as well.
Underlines microStart CEO Patrick Sapy: “Our one thousand microloans have helped to create five hundred new jobs. We’re talking here about people for whom not only setting up a business had seemed out of reach, but who were finding it very difficult to get into the job market at all. And these are sustainable jobs as well. Fully 80% of our clients are still working two years later.”
microStart has been so successful that the formula, which originated in Brussels, has been extended to Wallonia and Flanders. In 2013, microStart opened two additional agencies, one each in Liège and Ghent. Then Antwerp and Charleroi followed in 2014. In addition, our Board of Directors has been strengthened with the appointment of Minister of State Philippe Maystadt as Chairman.
“There’s a potential for 20,000 microloan applications in Belgium”
The increasing demand for microloans can be seen throughout the country. Patrick Sapy believes that there is huge potential for development in this area.
“We’re already celebrating our 1,000th microloan, but I don’t think we’ve even reached 10% of the market yet. There are 400,000 unemployed people in Belgium, 5% of whom, according to our estimates, would like to set up their own company, which adds up to a potential 20,000 companies. At the present rate, microStart is granting 600 loans a year. Our target is to double that figure and be making 1,200 loans per year in five years’ time.
BNP Paribas Fortis, the driving force behind microStart
BNP Paribas Fortis is one of the original partners behind the micro-lending project. microStart is an illustration of the Bank’s determination to create a range of initiatives to support new entrepreneurs. The Bank’s financial knowhow is an essential component of each and every microStart business project.
BNP Paribas Fortis is also currently running a novel campaign called 'Boost your Business' – Boostez votre Business, in French – Boost uw Business, in Dutch. Entrepreneurs have the chance to win €10,000 worth of advertising and even the opportunity to have their company logo displayed on the RSC Anderlecht soccer team shirts. Mehmet Eler is also taking part in this contest.
About microStart
microStart was set up by European pioneer of microcredit Adie (Association pour le Droit à l’Initiative Économique (Adie), a French non-profit organisation, and BNP Paribas Fortis, Belgium's No. 1 bank.
microStart aims to make micro-loans available to people who are excluded from the normal job market and find themselves without access to traditional lending, but would nevertheless like to set up their own business.
microStart can rely on guarantees issued by Progress MicroFinance, the European Progress Microfinance Facility, which aims to increase the availability of microcredit – loans below EUR 25 000 – for setting up or developing a small business. The European Investment Fund has an observer’s seat in microStart’s board of directors.
microStart has been active in Brussels since March 2011. In the meantime, microStart helped to create nearly 500 new jobs in Belgium. Encouraged by the results achieved by its two Brussels branches, microStart is steadily expanding in Flanders and Wallonia. Two branches were opened in mid-2013 in Ghent and Liège and two additional ones will follow suit in Antwerp and Charleroi in September next.
www.microstart.be