Finance for local development: New solutions for public-private action
This handbook, one of the outcomes of a project “Getting the Framework Right: Public Support Strategies and Measures for Local and Micro-finance” shows good practice internationally in public support for local and micro-finance; and how to develop and implement policy instruments to give effective support to local and micro-finance in one’s own territory.
Local and micro-finance organisations provide capital and
other support for entrepreneurs making it easier for them
to start or run their business. Moreover, local and microfinance
organisations support enterprises that are not the
target of mainstream financial institutions. This means
that they form part of a strategy to develop risk capital
markets for micro-, social and marginalised enterprises in
particular. Local and micro-finance organisations therefore
deliberately aim to fill a market gap for enterprises that
cannot access bank finance.
Most micro-finance organisations provide support for
people to set up in self-employment. Some, like the Full
Circle Fund in the UK, help establish networks of the selfemployed
by organising them into lending circles or other
groups, which provide mutual support and advice. Social
finance organisations, such as Crédal in Belgium,
Mag2Finance in Italy and Coop57 in Spain, on the other
hand, are explicitly targeted at supporting social and
cooperative businesses. Many of these businesses meet
critical social and economic needs, such as environmental
services, that are not currently met by the market.
Both micro- and social enterprises are critical for
employment. In addition, most of these organisations are
strongly rooted in their local areas, supporting enterprises
that provide not only local employment but a wide range of
local services, such as neighbourhood and social services.
This handbook accompanies:
• 10 memos setting out (a) the current state of local and micro-finance in ten Member States of the European Union, and (b) the framework of public
support for local and micro-finance in those Member States;
• 15 casestudies of good (and some bad) practice in public support for local
and micro-finance, showing what public officials within the European Union,
as well as elsewhere, have already done in practice in implementing
effective policy instruments to support local and micro-finance;
• a database of 600 officials, practitioners, experts and others from across ten Member States of the European Union, which you can use to find useful
contacts whom you might consult or work with in developing local and
micro-finance in your territory.
All the memos, casestudies and the database are available on the website
www.localdeveurope.org for you to consult.