Contextualizing Microcredit in Europe: a Focus group Exploration in Bosnia-Herzegovina, Hungary and Italy.

The development and promotion of microfinance services has been viewed as a key policy and program intervention for poverty reduction and bottom-up economic and social local development. This paper aims to analyze critically the role of microcredit in Europe as a tool to facilitate the credit access to vulnerable people and help them establish or expand a business. The research focuses on the direct experience of people who have used microcredit in three European countries (Bosnia-Herzegovina, Hungary, and Italy) and is part of a project (“Measuring Microfinance Impact in the EU. Policy recommendations for Financial and Social Inclusion”) funded by the EIBURS. Using focus groups, the research analyses the mechanisms through which the involvement in microcredit operations results in positive (and negative) effects on people’s lives. These effects are potentially numerous and complex, and can reflect on all the economic, social and cultural rights. During the group discussion, microcredit emerges as a positive instrument representing a great opportunity to allow people to find a form of employment, in the respect of the human rights. The credit seems to be even more important for women as a way to become independent economically, to start playing a new role in the society. However, the initial support and the following assistance during the loan term emerge as fundamental elements for the success of microloans, not only for the most vulnerable borrowers. These results suggest that effective microcredit policies should support the provision of non-financial services along with microcredit.