1. JOB CREATION & POVERTY
ALLEVIATION IN THE V4 COUNTRIES
BY MICROCREDITING
Dr. Antal Szabó
UN ret. Regional Adviser and Scientific Director
of ERENET

2. YOUTH UNEMPLOYMENT IN EU
The youth unemployment rate reached new
historic high of 23.5 % in February 2013, more
than twice as high as the adult rate, with some
5.7 million young people affected. Young
people that have only completed lower
secondary education (early leavers from
education and training) bear the highest risk of
unemployment. In 2012, the EU average youth
unemployment rate was 22.8 %, but reached
30.3 % for low-skilled youth.

3. Basic Data
COUNTRY POPULATION
[ millio ]
AREA
[x 1000 km²]
GDP per
capita
[ US$ ]
CZECH REPUBLIC 10.5 78.8 26,389
HUNGARY 9.97 93 21,403
POLAND 38.5 312.7 21,313
SLOVAKIA 5.4 49 24,035
TOTAL: 64.37 millió & 531620 km2
GDP at current price in 2011 by the UNECE

4. YOUTH UNEMPLOYMENT RATE
for population aged 15-24 – UNECE, 2013
POPULATION
in
million
10.5 9.97 38.5 5.4
UNEMPLOY-
MENT RATE
in %
6.7 10.9 9.7 13.6
YOUTH
UNEMPLOY-
MENT RATE
in %
in 2011
18.0
in 2012
19.5
in 2011
26.1
in 2012
28.1
in 2011
25.8
in 2012
26.5
in 2011
33.2
in 2012
34.0

5. YOUTH UNEMPLOYMENT RATE
annual average for those below 25 years

6. POVERTY IN EUROPE
AT-RISK OF POVERTY RATE in % by the
Report of the EUROSTAT 2010
Around 84 million people in the EU (17% of the
population live below the poverty line)
• EU27 17
• CZ 16
• SL 17
• SK 28
• PL 32
• HU 37
• RO 50
• BG 51

7. At-risk-of Poverty or Social Exclusion
Rate by age group in 2012 - EUROSTAT
TOTAL CHILDREN
(1-17)
ADULTS
(18-64)
ELDERLY
(65 & over)
24.8 28.1 25.4 19.3
15.4 18.8 15.5 10.8
32.4 40.9 32.9 20.6
26.7 29.3 26.7 23.4
20.5 26.6 19.9 16.3

8. PRIORITY OF THE GREEK
EU PRESIDENCY
• Promotion of employment and the creation of jobs,
notably amongst the young population.
• The Greek Presidency will speed up the implementation
of actions such as the “Initiative for the Youth” and the
“Youth Guarantee”.
• The Greek Presidency also seeks to finalise the
negations on the proposed directive of the posting of
workers, as well as the establishment of a quality
framework for internships across the EU,
• The ppromotion of the programme for employment
and social innovation and the PROGRESS
microfinance facility

9. V4 Youth Roundtable – April 2013,
Warsaw
• During the Poland’s Presidency of the V4 - between
July 2012 and June 2013 a report was prepared by
Ewa Krzaklewska is to provide the reader with a
comparative analytical review of the situation of
young people in these countries for the
prospective development of youth policy in the
region of the Central Europe.
• Youth faces with new challenges caused by
economic and financial crises, they continue to
search for varying solutions to appearing issues.
Therefore, the exchange of ideas within youth
policy field appears critical.

10. Youth in V4
• The economic crises cause widening of poverty or
stagnation in improvement of young people’s
economic situation. Among the ethnic communities,
most activities are directed towards Roma young
people.
• Unemployment in the V4 countries is relatively high.
Difficulty to find jobs in the locality and low salaries
remain young people’s concern. Many of them
migrated to EU after the accession.
• The good practices are needed aiming at supporting
young people’s entrepreneurship.

11. KEY CONCEPT OF MICROFINANCE
MICROCREDIT
 small loan (> € 500-2,000) without collateral
 to unemployed & very poor people, usually women
 for self-employment project aiming at generating income
 allow them to care themselves c their families
MICROFINANCE
 consisting of microcredit programs with social orientation
 includes micro-saving, micro-insurance, remittance transfer
 provide traning, advice, councelling, coaching
SO MICROCREDIT IS A PRODUCT OF MICROFINANCE

12. Give a man a fish, he eats for a
day.
Teach a man to fish, he eats
for a lifetime.
Provide credit and training, he
opens a seafood stand, feeds
the surraundigs, and becomes
a healthy entrepreneur in the
community.
• Dignity
• Motivation

13. MICROFINANCE AS A KEY POLICY TOOL
FOR JOB CREATION & POVERTY
ALLEVIATION
• There is no single policy model for the promotion of
entrepreneurship among youth.
• The lack of adequate start-up finance is one of the most
significant barriers to young people seeking to create their
own businesses.
• MICROCREDIT is a “bottom-up” local economic
development process assisted by special MFIs.
• There is a paradigm change in crediting activities:
unemployed people and poor become creditable. Credit can
create economic power that would generate into social
power, lifting the poor out of poverty.

14. Celebrating the
Founder of Microcredit
2006
Nobel
Peace
Prize
Winner
1998-99 Rotary
International Award
for World
Understanding
Dr. Mohammad Yunus
CELEBRATING THE FOUNDER OF MICROCREDIT

15. Microcredit as a Platform
for job creation & poverty eradication
“There is no conflict in having microcredit,
education, health, empowerment, [and]
training together; they support each other.
If you laid out the foundation of the
financial system, it makes other
interventions so much more powerful. If
you come with education, health, and
training, everything will make much more
sense, and you get much more mileage out
of your effort, provided you have the
microcredit framework already built into
the system.”
Dr. Muhammad Yunus, Founder of Grameen
Bank and Nobel Peace Prize Winner 2006

16. "A European initiative for the development of
microcredit in support of growth and
employment„ by the EC as of 13 November 2007
four priority areas for action:
i. improving the legal and institutional
environment in the Member States,
ii. changing the climate in favour of employment
and entrepreneurship,
iii. promoting best practices and
iv. providing additional financial capital for
microfinance

17. AMOUNT BY THE EU
• In 2010, the European Commission by its
Decision No. 283/2010EU launched the
European Progress Microfinance Facility
(EPMF) for setting up and/or developing
microenterprises and small businesses by the
availability of microcredit – loans below €
25,000.
• Progress Microfinance does not directly
finance entrepreneurs, but enables selected
Microcredit providers in the EU to increase
lending

18. • "Progress Microfinance is clearly an effective facility both for
microfinance providers and entrepreneurs. By providing
access to microfinance to create jobs, particularly for
disadvantaged people, the Facility has proved to be an
important social investment tool that should continue in the
future."
European Commissioner of Employment, Social Affairs
and Inclusion László Andor
• Through this Facility twenty microfinance providers
throughout the European Union have received guarantees or
funding (debt or equity) to facilitate their lending to would-be
micro-entrepreneurs worth €170 million over the coming two
to three years.
• Progress Microfinance provides loans of up to €25,000 and
aims to generate a total loan volume of €500 million for
46,000 micro-borrowers across Europe until 2019.
Progress Microfinance proves
as tool for micro-entrepreneur start-ups

19. Established in 1998, the Microfinance Centre
is a regional microfinance resource centre and
network. It brings together 103 organizations -
including 78 microfinance institutions - in 27
countries of central Europe, Eastern Asia and
the Caucasus Region. MFC serves over
800,000 low-income clients. The MFC
headqurters is located in Warsaw. It has also a
regional office in Bishkek (Kyrgyztan).
http://www.mfc.org.pl/

20. • The European Microfinance Network (EMN)
aisbl gathers organizations primarily involved
in the European Union (EU) and EFTA
countries that address issues related to
professional and personal microcredit, as
well as business development and training to
entrepreneurs. Other financial services (i.e.
insurance, savings) are still underdeveloped.
http://www.european-microfinance.org/

21. MICROFINANCE INSTITUTIONS IN V4
COUNTRY MICROFINANCE INSTITUTIONS
CZECH REPUBLIC
NFMF - Nadacni Fond Microfinance
Electronic Loan Exchange Network - myelen.com
HUNGARY
MVA
Hungarian Microcredit Network
MiFiN Microfinance Financial Service ZRT
START Garancia ZRT
POLAND
Polish Agency for Enterprise Development
Fundusz Micro
FM PBP Bank SA
Iniciatywa Mikro (“IM”)
SLOVAKIA
NADSME National Agency for Development of
Small and Medium Enterprises
INTEGRA Foundation
VOKA NGO

22. MICROFINANCE INSTITUTIONS IN V4
• 11 LEADING MICROFINANCE INTERMEDIERIS WITH
HUNDREDS OF REGIONAL FILIALS
• CLASSICAL GROUP LENDING FACILITY IN POLAND
• GOVERNMENT BANKS IN HUNGARY & POLAND
• NGOs IN HUNGARY, POLAND & SLOVAKIA
• NATIONAL SME DEVELOPMENT AGENCY IN
SLOVAKIA
• NO INDIGENOUS MFIs IN THE CZECH REPUBLIC
• INDIGENOUS BANKS DO NOT RECOGNISE THE
SIGNIFINACE OF MICROCREDITING
• THERE IS NO SINERGY AMONG THE MFIs IN THE V4
COUNTRIES

23. MICROFINANCE IN POLAND
• Microcredits are granted by very diverse organisms. The main ones are
commercial banks such as BPH, the cooperatives grouped into a
National Association (SKOK) which are essentially granting consumer
loans to their members, the MFIs among which one of the most
important is Fundusz MIKRO Bank, and the Loan Funds, grouped
together into an Association at the national level. FM Bank is the
most recent microcredit provider in Poland and the first financial
institution to specialize in servicing micro and small companies.
• It is important to underline that Fundusz MIKRO is changing its status
to become a microfinance bank. The amount of a loan within the
microcredit framework cannot exceed € 30,000 (PLN 120,000).
• Since the beginning of microfinance activities up to the end of 2008,
the number of loans granted exceeded 171,000. The average credit
amount is a little more than PLN 16,000 (€ 3,900).
• The opportunity for microcredit provision in Poland lies within the
significant number of micro-entrepreneurs (95,9% of the total number
of enterprise). The main challenge for the MFIs is the access to
funding for on-lending to microentrepreneurs.

24. MICROFINANCE IN THE WORD
• Microcredit/microfinance is reaching a state of maturity
• In terms of scale, in 2011, 204.080 microloans were
granted (45% higher than in 2009), for a total value of € 1.05
million (5% higher than in 2009). The average loan amount
was € 5.135 (in 2009, it was € 9.641).
• Increases are attributed to the development of national
microcredit programs, such in Germany, Hungary, the
Netherlands and Poland
• There are >4000 NGO Microfinance Institutions (MFI)
worldwide
• There are effective regional models
• Infrastructure has made a difference; villages are connected
• Large charities such as the Gates Foundation and many others
now getting involved
• The is a healthy ongoing debate between commercialization and
philanthropy

25. CONCLUSIONS
• There is no single policy model for the promotion of
entrepreneurship among youth, and programs
developed in different cultural and national settings
show a wide variety of approaches.
• Every country has to find an appropriate policy mix
of initiatives that fits to their cultures.
• Microfinance in CEE has been portrayed as a key
policy tool for job creation and poverty reduction.
• Microcredit is not a panacea for job creation and
poverty alleviation.
• In addition to provision of loan, there is a need
clever advocacy and consulting support how to
create a business plan and how to start-up.

26. RECOMMENDATION
So far the V-4 countries did not organized any
workshop where the country practices and
their main characteristics were presented and
discussed. This is why it is suggested:
• to launch such kind of project based on the
existing Visegrad Found,
• organize workshops, share experiences in job
creation programms and
• elaborate joint standpoints and
recommendations for good conduct.