Microcredit

The estimate of jobs created with the help of a loan granted by MicroBank, the social bank of ‘la Caixa’, in Arag√≥n in 2014 amounts to 474.

This is one of the data of the report on the impact of microcredits in the labor market, prepared for the fifth consecutive year by the ESADE business school, which highlights MicroBank’s commitment to financing entrepreneurs and micro-enterprises in this period of time, with an annual growth of 35 percent.

In just the first six months of 2015, an estimated 253 job creation in the Community with the support of microcredits.

The study, carried out by the Institute of Social Innovation of ESADE, points out different aspects of interest when analyzing the social importance of this type of instruments.

In the first place, it is verified that if before the crisis the microcredit was essentially aimed at facing situations of social exclusion, progressively its role is gaining weight to promote entrepreneurship and the generation of wealth and employment.

The study, conducted on the basis of a survey of more than 800 clients, reveals that the typical profile of the beneficiary of the microcredit is one man (59 percent of the total), Spanish (83 percent), between 36 and 50 years old (46 percent), with secondary education (42 percent) and who worked as self-employed before starting their own business (44 percent).

24 percent of the total was unemployed before starting their business project. Young entrepreneurs (under 35 years old) continue to be one of the most active groups in the request for micro-credits and they represent 27 percent of the total.

The main reason to face an entrepreneurial project is the economic need, in 30 percent of cases, compared to 28 percent who claim to have seen a clear business opportunity.

One of the most relevant factors in the granting of microcredits is their impact on the generation of new employment opportunities, both through new businesses and by expanding the number of employees in existing companies.

In this sense, the average creation of 1.55 jobs has been estimated for each project financed with this instrument, including the entrepreneur himself. The average number of jobs created by new businesses (including that of the entrepreneur) is 2.1.

Within the group of entrepreneurs that expand a business, the average number of new jobs generated with the help of microcredit is 1.1. In addition, 32 percent of respondents said they plan to expand staff in at least one person in the next 12 months.

Economic remuneration

Economic remuneration

Regarding the economic remuneration, the majority of entrepreneurs surveyed declared annual net income of less than 25,000 euros, with the majority (31 percent of cases) being between 10,000 and 25,000 euros, while another 24 percent was below 10,000 euros and 15 percent get an income of between 25,000 and 50,000 euros per year.

With regard to the business model, 51 percent of microcredits have been used to launch new initiatives and 49 percent to expand existing companies.

It should also be noted that 78 percent of the projects are run by self-employed workers. As regards the sector of activity, the majority is circumscribed in the chapter on professional services and retail trade. On the contrary, only 2 percent are specialized in new technologies.

The data show that microcredit has been a vital instrument for the creation of new business initiatives.

Thus, 58 percent of respondents do not believe that they could have started or expanded their business without them. In 37 percent of the cases, the microcredit covered one hundred percent of the initial investment, and in another 11 percent, it represented more than 75 percent.

46 percent of the entrepreneurs state that their current economic situation is better than they would have without having been beneficiaries of a microcredit.

In addition, three quarters feel more confident in their abilities as entrepreneurs or entrepreneurs, more independent, with more control over their lives and with more confidence in the future.

It is therefore clear that microcredit is also positive in aspects such as family life and integration in the community itself.

ENTREPRENEURSHIP

ENTREPRENEURSHIP

The report places special emphasis on entrepreneurship carried out by women. In this sense, the profile presents features similar to those of men, although the percentage of women who access entrepreneurship due to their difficulties to reach the end of the month is much higher and they are more frequently focused on the services and on trade.

As a general rule, projects promoted by men are somewhat larger than those directed by women and, as a result, they have more capacity for growth and job creation.

Another aspect that presents differences with respect to entrepreneurship carried out by men is that which refers to the employer’s previous work situation.

Thus, while men worked mostly as self-employed (in 51 percent of cases), in women the proportion drops to 33 percent.

The number of women who come from a situation of unemployment is much higher than that of men: 35 percent compared to 23 percent, which shows that for many women starting their own business is one of the few outings professionals at your fingertips.

MICROBANK

MicroBank, the social bank of ‘la Caixa’ specialized in microfinance, is the only bank in Spain dedicated exclusively to the financing of projects through microcredits. The entity was a pioneer in its business model and continues to be the one that allocates the most resources to finance initiatives through microcredits.

During 2014, MicroBank has granted a total of 82,586 loans http://www.llamero.net/learning-the-basics-of-stock-exchange-investing-through-penny-stocks.html for an amount of 434.4 million euros and has helped to create or consolidate, since its creation in 2007, more than 134,000 jobs.

MicroBank has made 306 microloans to entrepreneurs in Aragon during the past year, for an amount of 3.5 million euros, while in the first half of 2015 the number of loans for this group amounts to 163, with an investment of 1, 5 million euros.

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