Developed and emerging countries: different needs, different strategies
In emerging countries, microcredit can take the form of loans ranging from €50 to €5,000 in value. Targeted customers are most often existing micro-enterprises (in sectors like commerce, services, agriculture, etc.) or investment projects. The most socially advanced microfinance institutions also provide non-financial services.
BNP Paribas is present in 10 emerging countries: Brazil, Colombia, China, India, Indonesia, Vietnam, Ivory Coast, Morocco, Senegal and Tunisia.
In developed countries, loan amounts vary between €2,000 and €20,000. Their goal is to promote financial and social integration for the beneficiaries: persons facing poverty or unemployment, or youths lacking resources or experience for their entrepreneurial project (often startups).
BNP Paribas favors projects with a strong social component, and customers facing exclusion. BNP Paribas is currently present in 7 developed countries: France, Italy, Belgium, Luxembourg, Poland, the United Kingdom and the United States.
Microfinance: a reality at BNP Paribas
Microfinance offers a perfectly suited response to the lack of credit access that poor and isolated populations face throughout the world. Though involving small amounts, microloans have a strong social impact: they sustainably improve micro-borrowers’ quality of life by enabling them to start or expand an income-generating activity in emerging or developed countries.
BNP Paribas realized the power of microloans at an early stage. As far back as 1989, the first microfinance partnership was concluded with Crédit Rural de Guinée. BNP Paribas’s commitment gradually expanded, not only through actions taken in emerging and developed countries, but also through efforts to gradually structure its microfinance activity.
This resulted in the creation of a dedicated activity in 2006. The following year, BNP Paribas allocated a budget of €100M to microfinance. Since 2012, this activity has become an integral part of the Group’s CSR strategy, and it continues to grow rapidly at BNP Paribas. In 2015, microfinance institutions (MFIs) received funding from the Group in 17 countries – with sums outstanding (all types of support combined) reaching €213M as of December 31, 2015. Ambitious goals have been set for 2018, such as reaching 350,000 indirect microloan beneficiaries (compared with 255,000 at the end of 2015).
A commitment strengthened by volunteers
While BNP Paribas has pursued a strong commitment to microfinance, its actions are multiplied by the efforts of over one hundred volunteers. These volunteers work alongside partners (particularly ADIE, France Active and Initiative France in France, and with a dozen other NGOs worldwide) to offer high added value to supported projects.
Volunteers lend their skills and expertise to serve existing MFIs customers or MFIs that lack access to credit.
In France, they provide support for micro-enterprises through early project phases by leading training, delivering legal support, participating in credit committees, etc.
Worldwide, in 13 countries in Asia and Africa, they help in risk management, commercial strategy, measuring social performance, financial analysis and governance, as well as translation, communication, technology and more.
These volunteers’ efforts make all the difference! By giving their time to provide financial and non-financial support to MFIs and microloan beneficiaries, they help make our programs more effective. But they also build strong human ties between BNP Paribas and populations excluded from “traditional” financing.
How BNP Paribas supported microfinance in 2015
Our €213M in outstanding microloans went to:
loans granted to MFIs in developed countries (€76M)
loans granted to MFIs in emerging countries (€90M)
capital investments (€8M)
employee savings plans that refinance MIFs (€18M)
customer savings plans (microfinance fund share) (€17M)
other sources (€2M)