Pioneered in its current form by Grameen Bank in Bangladesh in the 1970s, numerous microfinance operators (MFIs, microfinance banks, savings and credit cooperatives, etc.) came onto the scene in the 80s and 90s, addressing the needs of those excluded from the traditional banking system. The sector has since grown and become more organised and professional.

What is microfinance?

Microfinance, according to a definition that is widely accepted today, refers to all measures that provide financial products and services to those excluded from the traditional banking system, in order to fund income-generating activities. Initially closely related to microcredit (very small loans given to self-employed borrowers, with little or no collateral), microfinance has since evolved to include a full range of financial products and services: savings, insurance, payment, money transfers, etc. Key players agree that microfinance is an important vector for economic and social development and the fight against exclusion, especially in helping very small entrepreneurs, frequently women, to sustain economic activity.

Who are microfinance's players?

Microfinance Institutions (MFIs) come in many shapes and sizes: credit unions, savings and credit cooperatives, NGOs, programmes established by international institutions, banks, businesses, etc.. Their operations rely on proximity to their customers and high interest rates resulting from high monitoring costs. Repayment schedules are short (often weekly).

Today, in addition to these traditional players, other organisations, including mobile network operators, are making good use of technology to develop new service models to make products and services to these excluded and remote populations.

The evolution of the microfinance sector and its players is accompanied by the introduction of prudential regulations and practices adapted to country, geographical area, type of activity, etc.

How is Societe Generale active in microcredit?

Strongly committed to professional integration and banking inclusion, Societe Generale is involved in the microfinance sector in countries where it operates as a universal bank, thus contributing to providing banking services and developing local economic conditions.

Internationally, through its foreign network, the Group supports more than thirty microfinance institutions by funding refinancing lines.  The Group has provided MFIs around the world with a total of more than EUR 95 million, mostly in Africa and the Middle-East

Internationally, through its subsidiaries in Africa, Societe Generale also holds a stake, through active minority interests, in five internationally recognised MFIs (Advans Cameroun, Advans Ghana, Advans Côte d’Ivoire, AccesBanque Madagascar and ACEP Burkina).

In France, Societe Generale has been a partner of the ADIE (Association for the Right to Economic Initiative) since 2006. This organisation helps people excluded from the labour market to create their own jobs by building their own businesses using microcredit.

Microcredit in France

Microcredit can also meet certain needs in “mature” economies. In France, it provides financing to microenterprises and helps people trying to return to work.

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