unemployed people have a capacity of initiative
and energy that enables them to create their own
jobs, but they lack resources and support. Our
aim is to give everyone the right to economic
initiative, by opening access to capital and providing
the technical support needed. Solidarity Credit
can transform excluded people into creators of
wealth. Trust rebuilds the social link"----
Maria Nowak, President of ADIE.
which was set up in 1990, provides a valuable experience
for microcredit practitioners in developed countries
around the world. It shows how to build up microcredit
programs and microfinance institutions on a more sustainable
basis, even in the context of a restrictive regulatory
regime that most European countries have to cope with.
It now has 7500 active clients, with Euros 13 million
as outstanding loans. ADIE has created around
15,000 new micro-enterprises and 20,000 new jobs. The
cost of creating a microbusiness on the average is just
1800 Euros, which is only one tenth of the cost of providing
benefits to the unemployed. The loan recovery rate is
currently 94% and the program activity is growing at
an astounding rate of 30% every year. Thus ADIE has
directly demonstrated that investments for financing
micro-enterprises is economically more cost effective
than the cost of conventional social security practised
in West European countries.
started its credit operations with its own mirage funds.
Today a growing part of the loan fund comes from other
banks. A counter guarantee by the government and the
European Investment Fund helps to cover the loan risks.
Personal guarantees from friends or family, cover upto
50% of the loans, which carry market interest rates,
currently 7.07% per annum. Borrowers have to pay a solidarity
fee equivalent to 2-3 percent of the loan amount. ADIE
collaborated with local social aid and enterprise support
networks. It benefits from the support of many voluntary
workers, who provide sponsorship, advice or training.
Business advice and training are financed by local communities,
the State and the European Social Fund.
the end of 2000, ADIE's network covered 20 regions and
80 departments within France, with a rapidly expanding
program. It is receiving more than 10,000 applications
every year and for whole of France the potential demand
is estimated at 20 to 30 thousand projects annually.
The potential for future growth of ADIE on a more
sustainable basis is quite large, as microcredit can
cater to the need for self employment generated by new
information and communication based technologies. However,
financial viability, which is the aim of most microcredit
programs, cannot be reached in France within the current
institutional framework, because the technical support
costs are particularly high. Furthermore, in the
partnership with banks, only the banks receive the interests.
The aim of the Association is, therefore, in the short
term to ensure the social and economic return, which
means a job creation cost lower than one fourth of the
annual cost of unemployment.
by the experience of Grameen Bank in Bangladesh,
microcredit has developed not only in Asia, Latin
America, Africa, but also in industrialized countries
such as the United States, Canada and Eastern Europe.
It is based on the fact that poor people pay back
as well as, or even better than the others and that
the transaction costs can be limited, as long as
the credit is based on appropriate methods.
Under its three years plan for the period 2002-2004,
ADIE in its ongoing program will concentrate
on the poorest target population in the deprived areas
of France. It expects to provide 8000 solidarity loans
in the final year of the plan period and support further
expansion of micro lending in Europe.
from Solidarity Credit Promoting Self Employment,
a publication of ADIE.