Microlux, a microcredit platform that launched in Luxembourg a few months ago, is here to complete the offering available to entrepreneurs looking for financing in the Grand Duchy.
We met up with Samuel Paulus and Jérémy Del Rosario, the managers of Microlux, to find out more about this new service.
Samuel Paulus and Jérémy Del Rosario (2nd and 3rd from the right), managers of Microlux, in the company of Her Royal Highness Grand Duchess and their first clients.
What can you tell us about microcredit?
Microcredit is a financing solution aimed at anyone who is developing a creative project or a business activity, but who does not have access to traditional bank credit.
The growth of microcredit services originated in the 1970s when Professor Muhammad Yunus, Nobel Peace Prize winner in 2006, established the Grameen Bank in Bangladesh. The Grameen Bank mostly lent money to poor women hoping to develop small economic activities.
In Western Europe, microcredit was first introduced in France and then gradually spread throughout the rest of Europe. Microlux, the first microfinancing institution in the Grand Duchy of Luxembourg, was recently established in 2016.
What advantages does microcredit present compared to other financing possibilities available to small businesses?
Microcredit is a financing solution that complements other existing forms of financing, rather than competing with them. What distinguishes Microlux even more is that we offer free support and follow-up before and after the business is created. We call this accompanied microcredit; Microlux is not just about money!
Of course, this is all possible thanks to our extensive network of experts with diverse profiles who voluntarily offer their energy and their competencies to our project initiators.
What are the eligibility criteria and what is the selection procedure?
Anyone who has an entrepreneurial project or the ambition to develop their business, be it as an independent or as a society, and who is not eligible for traditional financing from banks can apply for microcredit. Notably, this includes job seekers and low-wage workers. In a way, we are a contingency for those with no other options.
The grant of the loan is determined based on three principal criteria, human and economic in nature:
- the project’s initiator: their experience, determination and competencies
- the project: potential clients, the predicted turnover, available supply
- repayment capacity: based on their current situation and on the forecasts of their activity
The application is presented to a credit committee, comprised of volunteers, that decides whether the loan is granted. The human aspect plays a fundamental role in this decision.
Our loans range up to a maximum of 25 000 euros and for a period up to 48 months.
What is Microlux’s objective?
For 2017, we hope to support at least 30 people through microcredit.
Beyond this quantifiable goal, we aim to give a maximum number of people access to their own economic initiative and to allow those who are often excluded from the job market to create their own jobs; after all, we should remember that creating a business to enter the job market is just as legitimate as getting employed.