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sector in Europe is in decline while the service industry and modern technology is
steadily growing, micro and small enterprises have gained and are still gaining
importance (Lämmermann, Zamorano and Guichandut, 2007).
Enterprise category Headcount Turnover or Balance sheet total
Medium-sized < 250 ! " 50 million ! " 43 million
Small < 50 ! " 10 million ! " 10 million
Micro < 10 ! " 2 million ! " 2 million
Table 2.1: Enterprise Category (European Commission, 2007)
The !
three major European Microfinance Networks share this view. One of their key
recommendations for policy makers from their shared advisory report (CDFA, MFC,
EMN, 2007) is to recognise that microfinance is broader than the provision of credit.
It includes a range of other financial services, such as savings, insurance and
leasing. However, other non-financial services such as BDS and financial literacy are
needed to fight all aspects of social and financial exclusion. The European Networks
argue that this will significantly enhance the operations of microfinance institutions
(MFIs), which will, in turn, increase their impact, accelerating the inclusion process.
Jayo, et al. (2008) made similar recommendations.
2.5.2 What are BDS?
In 2002 the Micro-Finance Skills Project described BDS as all external non-financial
support to enterprises that:
• Increases operational capacity;
• Provides access to markets;
• Improves management skills;
• Improves financial efficiency;
• Provides access to networks and information.
According to Lämmermann, et al., (2007) support services are especially important
for microenterprises (enterprises with less than ten employees). Micro entrepreneurs
often lack technical and managerial skills, information and market access, factors
Elmar Hoogendoorn 21
Sustainable Microfinance