The regulation and development of microcredits in European territory: France and Spain

Abstract

Microcredit is a financial tool designed to end the financial and social exclusion of people, as well as a means of eradicating poverty. Muhammad Yunus, founder of microcredit, established Grameen Bank, one of the world's most prestigious microcredit institutions. Microcredit has gone through an increasing evolution in almost every country in the world. In Europe, its development has been positive and it has offered opportunities to many people and families who had lost their jobs. Also, microfinance institutions play a very important role within Europe. Almost 60% of European MFI spend more than 50% of their billing of microcredit. However, every country has its own regulations and their microcredits work differently even though they belong to Europe. While in the case of France, a clear regulation and development of this financial tool can be noticed, in Spain the evolution is different, since this country is stuck in a point of null regulation in the microfinance sector.