Microcredit in Europe gets boost from the Foundation

By Thomson Reuters Foundation

LONDON – TrustLaw, the global centre for free legal assistance run by Thomson Reuters Foundation, has brought together 20 law firms for a major study on the regulatory obstacles to microcredit across the EU's 27 member states.

Microcredit advocates say if restrictive regulations were lifted, those on welfare could pull themselves out of unemployment by receiving small loans to start their own businesses.

Led by law giants Orrick and Latham & Watkins, the consortium has poured hundreds of thousands of dollars of pro bono labour into a country-by-country guide, to be published by TrustLaw later this year.

Adie International, the largest microfinance institution in Western Europe, plans to take the report to the European Commission in November to advocate for sweeping changes to regulations across Europe and to explore adopting a binding legal instrument on the matter.

The European Commission estimates there are some 18 million micro-enterprises in member states, employing 37.5 million people or about 30 percent of the overall workforce. Micro-enterprises contribute 1.1 trillion euros ($1.6 trillion) to the European economy.

A micro-enterprise is defined as a company employing fewer than 10 people, while microcredit is a loan of less than 25,000 euros ($36,000).

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The law firms involved in the study were Orrick; Latham & Watkins; Eisenberger& Herzog; UGGC & Associés Brussels; Djingov, Gouginski, Kyutchukov & Velichkov, Ioannides Demetriou LLC Cyprus, Balcar Polansky Eversheds, Gorrissen Federspiel Copenhagen, Advokatu birojs VARUL, Dittmar & Indrenius, Szecskay Attorneys at Law, Budapest, A&L Goodbody, Kleyr Grasso Associés, Zammit & Associates, Holland Van Gijzen, General Electric in-house legal team, Morais Leitão, Galvão Teles, Soares da Silva & Associados, DLA Piper Dinu SCA, Wolf Theiss.

All the firms are members of the Foundation's TrustLaw Connect service, which matches charities and social enterprises needing free legal help with lawyers worldwide who are willing to offer it.

($1 = 0.689 Euros)