The Chairman of the Management Board of BGL BNP Paribas, Carlo Thill, and the Chairman of the Board of Directors of microlux, Rémy Jacob, welcomed a large number of attendees. High-profile individuals from Luxembourg and Europe attended the event, which was symbolically important for the country. These included, in particular, Her Royal Highness the Grand Duchess of Luxembourg, Ministers Corinne Cahen and Nicolas Schmit, the Vice-President of the European Investment Bank (EIB) Pim van Ballekom and the Deputy Chief Executive of the European Investment Fund (EIF) Roger Havenith.

To coincide with the official launch, microlux and the EIF signed a microfinance guarantee agreement as part of the European Union Programme for Employment and Social Innovation (EaSI), whereby a certain percentage of unpaid loans will be repaid.

Microfinance makes sense for Luxembourg too!

Now the largest market by volume for microfinance investment funds, Luxembourg is also facing a need for microfinance on its domestic market linked to growing social inequality and the difficulties associated with accessing traditional bank loans.

Her Royal Highness the Grand Duchess stated that “the creation of the first microfinance institution is an important step for the Luxembourg economy. It is also a momentous occasion for those who, like me, have always been convinced that microcredits were one of the most effective instruments for tackling poverty and social exclusion, including here in Luxembourg. Microfinance is a welcome development in Luxembourg, where it gives every individual the chance to launch a business venture, whether they are poor, marginalised or excluded from the banking system.”

François Bourguignon, former Vice President of the World Bank and now a professor at the Paris School of Economics, shed light on the growth of social inequality in Europe and Luxembourg in recent years. “Negative effects on the functioning of the economy and social cohesion lead to the collapse of democratic models, as we are seeing today,” he explained.

Maria Nowak, founder-chair of ADIE and a leading expert in microcredit in France and Europe, spoke about the opportunities that access to microfinance creates for tackling such inequalities. “I believe that the opportunities on offer to the poorest individuals to impact circumstances remain limited. What they can do, however, is take control of their own destiny.”

Microlux: a comprehensive range of services

Microlux supports the creation and development of the business activities of individual clients and social startups that are unable to access traditional bank loans.

On the one hand, microlux will offer coaching and supervision via a team of volunteers trained in coaching, microfinance and launching a business in Luxembourg. On the other hand, the institution will provide three types of loans up to an amount of EUR 25,000.

Microlux opened its doors in June 2016 with the appointment of two managers reporting to a Board of Directors comprising representatives of the four partners listed above. Since its creation, microlux has already funded nine project sponsors in various fields and supported around 40 people. Among the projects supported, microlux funding has generated cash reserves, inventory and investment in very small enterprises such as a smartphone repair shop, a snack company and a delivery service.

Microlux was authorised to engage in its activities by the CSSF and the Ministry of the Economy. The institution is domiciled in the Maison de la Microfinance at 39, rue Glesener in Luxembourg City.