Luc Haegemans, Changing the Mindset and Strengthening the Capacity of Financial Institutions


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Luc Haegemans, Changing the Mindset and Strengthening the Capacity of Financial Institutions

  1. 1. An innovative enterprise to promote social cohesion Luc Haegemans
  2. 2. microStart: origins
  3. 3. microStart: common threadWhat if we were to set up a social enterprise?
  4. 4. microStart: Belgian branch
  5. 5. microStart: pilot project• Cooperative company with limited liability and a social purpose (credit)• Non-profit organisation (support and volunteering)• Initial capital: EUR 1,210,000• Board: 5 members (2 BNPPF, 2 Adie, 1 EIF)• 2 branches in Saint-Gilles and Schaerbeek, Belgium, for 2 years• Foreseeable expansion in Belgium in 2013• Goal is to continue the project in the long-term
  6. 6. microStart: member contributions• contributes 78.5% of the capital, refinances micro-loans and mobilises pool of volunteers• contributes 20.5% of the capital and guarantees 75% of the loan portfolio free of charge• contributes 1% of the capital and 20 years of expertise
  7. 7. microStart: aims• Provide financing for individuals excluded from the banking system who wish to set up or develop an independent economic activity• Support clients throughout their projects by providing tools and assistance that is tailored to their requirements• Promote changes to the regulations governing the creation of new businesses in Belgium by using microStart clients as an example
  8. 8. microStart: target group• Long-term unemployed, workers with little or no job security, recipients of social benefits• Self-employed• Workers in the informal sector• Financial Plan less than EUR 15,000• Average loan of EUR 4800 small-scale activities and projects
  9. 9. microStart: operation• 2 branches: one manager & two advisors• 1 back office• Active canvassing of clients, word of mouth, purchasing advisors• Customer service and responsiveness• Decision-making criteria focussed more on the person than the project
  10. 10. Economic Model• microStart borrows in order to re-loan (BNPPF line of credit = EUR 1.3 million)• Interest and commission earned on products must cover the operational costs• Capital covers the initial years of losses• Productivity, efficiency and strict repayment• Non-profit organisation: public service promoting integration and volunteering
  11. 11. Initial resultsOverall statistics on 30 October 2011: 460 entrepreneurs met 70 projects already financed More than 130 partners met Various promotional activities withincommunities (local festivals, markets, etc.) Average micro-loan = EUR 4900 90% of entrepreneurs from minority groups
  12. 12. microStart: clientsJulien, market stall seller Catalina, Latin-American grocery store owner
  13. 13. Regulatory framework in Belgium• Immediate loss of social income• Amount of social security contribution• Lack of public solutions for equity capital contribution• Strict regulations governing the establishment of self-employed businesses and certain professions
  14. 14. Thank you for your time !