Overview of the microcredit sector: Europe countries vs developing countries: a cross-country study

Abstract

Microcredit is a very useful financial instrument to facilitate the implementation of small businesses and fight against financial exclusion in developed countries as well as to fight against poverty in developing countries. In fact, the access to microcredits is helping to smooth out inequalities between different regions in the world, improving the economic situation and the empowerment of beneficiaries. This paper seeks to understand the impact of microcredits in developing countries and in developed countries, contextualizing the market, indicating their limitations and defining future lines of development. For this the microcredit market is analyzed in 8 countries of the European Union and 8 developing countries. The research results provide an updated overview on the market of microcredits and demonstrate that the impact of microcredits is different in developing countries where they have a greater importance than in the countries of the European Union.