The Commission has updated the European Code of Good Conduct for Microcredit to reflect the changing market realities and capture the wide diversity of providers within the microfinance sector in Europe. The new version entered into force on 1 January 2021.
The Code update is the result of a consultation in 2019 with key stakeholders, including practitioners, the European microfinance networks (EMN, MFC), banks, EU institutions and experts. The objective of this update was to fine-tune the existing clauses in the Code, where appropriate. Firstly, some parts of the Code were amended to better reflect evolving market realities, including best practices and more realistic expectations of providers. Secondly, amendments were required to ensure that the Code took into account the diversity of European microfinance institutions in terms of size, legal structures and national regulatory frameworks.
The European Code of Good Conduct for Microcredit Provision was established following the adoption of the Communication on microcredit, by the European Commission, in November 2007. It defines a unified set of standards for the microfinance sector in Europe. The Code serves as a self-regulation tool and a quality label for microfinance institutions committed to ethical finance. It targets microfinance institutions that provide business loans of up to €25,000 to micro-entrepreneurs or self-employed persons.
The Code was developed based on recognised best practices in the sector in close consultation with stakeholders. Signing up to or endorsing the Code is a pre-condition for accessing EU funding for microfinance under the EU Programme for Employment and Social Innovation (EaSI).