Posted on June 3, 2009 - by Gavin

Micro-credit : Creating real jobs and business in Lyon France…

Digital Journal

Micro-credit has been around a long while of course, and became a household name with the advent of the Grameen Bank, a major player in this field.

Micro-credit exists in many countries and as such doesn’t have a universally defined description due to the differing needs and cultures of the countries in which it is active.

France’s main micro-credit organism is the Adie Association for the Right to Economic Initiative. It was created in 1989 as a small outfit by its present-day President, Maria Nowak, and has since generated the creation of many thousands of small businesses.

One of the criticisms levelled at micro-credit has been that it is no more than a privatisation of public safety-net initiatives and programmes but Adie has overcome this via its statute as an association, which, in France, means it isn’t a private business in the normal sense of the word. This statute also gives it access to many collaborative actions with the authorities.

Badja Mezghiche is the Head of Regional Support for the Rhône-Alps and Ain regions of France. I met her today in order to talk about the association’s work. Adie is doing a campaign right now in order to heighten public awareness of its function and facilities. The reason there is a photo of a London bus here is because the bus is their on-the-road campaign headquarters. That’s why we had a chat in it. It was the first time this Englishman had been inside one for many years. So I had a trip down memory lane too.

Badja is a bright-eyed and very on-the-ball lady. She has been working for the association for a long time and so spoke easily about its role in French society.

“We aim our activity at unemployed people, those on Social Security and other people who can’t get credit for a good business idea. From the moment they begin to collaborate with us we organise training and other activities to maximise the potential of their idea.”

We talk about how that happens. There are a lot of parameters to take into account and I asked her how they define and organise them.

“It depends on the business idea. But in general, most ideas need a solid base of criteria to be met. We want to know if the person has the necessary skills to carry out the work involved and if there’s a grey area we try to concentrate our efforts on pulling it up to scratch. But in general, work organisation, keeping the books, stock issues, finding clients and getting the product right.”

One business in three doesn’t last more than two years in France, and most of them go bust not because of the product or service offered but because of a lack of organisational efficiency. Another factor has been the renowned cold feet that French Banks have when it comes to lending money and taking risks. That’s one of the reasons that the Adie is able to get finance from…banks. They are the link between a good small business idea and the money it needs. They work with several banks and, because 95% of the businesses they help to open succeed and the loan granted is repaid in full, finding finance is not a problem for them.

There are several different ways to obtain credit via Adie.

“We are able to offer credit of up to 6000€ for the financement of material and other needs and various other initiatives mean that this amount, in the right circumstances, can climb up to a maximum of 10 000€.”

“And how much interest do you extort from them?” I ask playfully.

“HA! 0%. Simple” says Badja. “There is no interest to be paid on this money. Once projects have been ratified and the potential entrepreneur trained in how to get his business off the ground, his proposal goes to a Viability Committee. If it’s accepted, the money is turned over in around three weeks.”

Badja’s Region, Rhone-Alps and the Ain, has successfully helped to launch thousands of businesses. More than 1500 last year alone. We discuss the crisis and if that is affecting the volume of applications they receive.

“Oh yes. We had planned for many less applications last year, but things just exploded. So this year we have planned for 1400, but it already looks like that figure will easily be beaten.”

Which leads us to why the red bus is out there in the streets of Lyon. People turn up to have their photo taken in front of it. That’s normal, the French love London buses.

In fact Adie is out there this week, from June 2-6, and hopes to make the public aware of the possibilities they offer, which, seeing as Adie is not a “business” business, is a little like social work in itself. The campaign is a national effort.

Other initiatives include out-reach problems designed to help younger people in the suburbs of Lyon, some of whom wouldn’t get a loan if only because of their address. Adie’s work is destined to help people in the 18 to 30 age group. There are many online services, and follow-up collaboration is continued well after the company begins doing business.

“Ok, let’s get a photo of you and the team.”

And Badja introduces me to Angele Mignonac, Credit Advice Manager, and Mouloud Laaziri, Head of Creajeune, Adie’s current scheme to help younger applicants.

Badja thinks it would be good to take a photo in front of the bus.

“Oh” she says “And did you know that the company from which you bought your t-shirt started up that company with us? It’s done really well since.”

I had forgotten which t-shirt I was wearing and looked down to see it was my “Lyon-Kid Tribe” one. It was made, very true, by a young, chic and very successful company here in Lyon. Everyone knows their t-shirts here.

Source: http://www.digitaljournal.com/article/273527