2005 International year of Microcredit

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2005 International year of Microcredit
Official Launch in Bulgaria 18 November 2004
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What is microfinance?

• The delivery of financial services to clients
  with low incomes, to micro and small enterprises
• Includes loans, savings, insurance and other
  financial products and services
• Microcredit is a crucial element of microfinance
  enabling people to invest in their development.

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Global Goals and Objectives

• Contribution to the Millennium Development Goals
• By 2015 halve extreme poverty
• Universal primary education
• Promote gender equality and empower women
• Reduction in unemployment
• Promoting an entrepreneurial spirit
• Encouraging entrepreneurship in women
• Creating inclusive and sustainable financial
  systems
• Promoting innovation and partnership

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The Advantage of Microfinance

• Continued access to funding for low income
  clients
• Requirements that clients can meet
• Fast and easy procedure
• Direct contact with clients
• Products tailored to clients needs
• Accompanying non-financial services

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Microfinance Long-Term Impact

• Economy strengthened through investment in the
  capacity of local communities
• Support for local markets and generation of
  economic opportunities for new jobs, investment
  and infrastructure
• Empowerment of people with limited economic
  opportunities strengthening of their confidence

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Microfinance Organizations in Bulgaria

• Ustoi Programme
• Nachala Cooperative
• Microcredit Guarantee Fund Project
• Jobs Opportunities through Business Support
  Project -JOBS
• Swiss Guarantee Fund
• Microfund EAD
• Union of Popular Funds Cooperative Union
• Federation of Private Mutual Rural Credit
  Associations
• Association of Popular Funds on the Internet
  Cooperative Union
• Partner banks with microcredit programmes
• Other organizations
• Federation of Mutual Rural Credit Associations
• Others

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Microfinance in Bulgaria Goals

• Improved legal framework regulating the work of
  non-banking financial institutions
• Products diversification
• Coverage of non-urban areas
• Expanded outreach
• Specialist support for women entrepreneurs
• Institutional sustainability in the context of EU
  accession

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Microfinance Legal Framework

• Cooperatives Act
• Companies Act
• Not-for-profit Legal Persons Act
• Obligations and Contracts Act
• Banks Act

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Microfinance Clients

• Start-up businesses, start-up entrepreneurs,
  unemployed persons
• Existing micro and small enterprises
• Farmers
• Self-employed persons

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Microcredit Outputs as of 30.09.2004

• Number of loans extended 90,777
• Loans active 24,514
• Volume of active credit portfolio
• BGN 82,830,480
• Volume of credits extended BGN 330,124,452
• Share of risk portfolio of credits more than
• 30 days overdue 2.96
• Number of jobs created 114,354
• Women as loan clients 42

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Year of Microcredit Upcoming Initiatives

• Thematic discussions on microfinance issues and
  trends
• National microfinance conference
• International microfinance conference
• Coordination Committee open to all organizations
  and institutions promoting microfinance

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Together, we can and must build inclusive
financial sectors that help people improve their
lives. Kofi Annan