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Financing granted by MicroBank, the social bank owned in full by CaixaBank, has decisively helped to create 21,321 jobs in 2015, according to a report carried out by the ESADE Business School Social Innovation Institute on the bank's initiative. "Since it was founded in 2007, MicroBank's support by means of small loans has played an important role in generating 155,000 jobs, with significant repercussions on family well-being and economic growth." highlighted Antonio Vila, President of MicroBank.
One of the main conclusions from the Report on the Impact of Microcredits, based on a survey among MicroBank loan beneficiaries for the sixth year running, reveals that this type of financing has made it possible to create jobs, either in processes to set up new businesses or expanding existing firms. In fact, 93% of entrepreneurs being financed continue working in their own company and 29% have taken on another worker since the microcreadit was granted.
Microcredits, boosting economic activity
Microcredits are one of the main instruments for facilitating access to credit, as reflected in the fact that 50% of those surveyed state that they could not have opened or expanded their business without a microcredit. Another 27% believe that they could have done it but with great difficulty.
In addition, the revenue generated by a microbusiness is the main source of income for one person in 30% of cases, whilst it pays two people in 27% of business initiatives. These figures demonstrate the crucial importance of business success not only for the entrepreneur but also for the people immediately around them.
In 30% of cases, the contribution of the entrepreneur's revenue to the family budget is over 75% whilst in another 29% it represents between 50% and 75%. Only in 14% of initiatives does this contribution represent less than 25% of the family budget.
Reasons for opening the business are worth a separate chapter. Entrepreneurship through need (in other words, people who wish to open their own business because they do not have a better option on the job market) represents 20% of MicroBank loan beneficiaries intending to set up a microbusiness in 2015. This refers to entrepreneurs that either did not have a job or feared they might lose it. Entrepreneurs who stated that they went down this road because they had seen a clear business opportunity represent 24% whilst there is also a significant percentage of businessmen who become entrepreneurs to maintain their family business or through vocation.
I always wanted to be my own boss
Optimism for the future
The people who asked for a credit are optimistic about their future. 70% believe that their business will grow quite a lot or moderately in the next few months, whilst 26% state that it will remain stable. Only 1% forecast that sales would drop and they would have to close. Based on their company's current development, 57% state that it is running well and 12% consider it to be running very well.
In addition, a majority of those who expanded an existing business say that their business is doing better than the previous year and only 6% mention that business is not as good.
As a company, we would like to employ more people
The analysis of the entrepreneur profile helps to complete the vision of the type of customer who signs up for a microcredit for financing. Men represent 50% of the total, compared to 31% women. The other 19% corresponds to loans granted to legal persons.
The majority group is made up of entrepreneurs between 36 and 49 years old, making up 42% of the sample, followed by the 26 to 35-year-old age range, representing 20% of the total. The beneficiary of a MicroBank loan has an average age of 40 years old.
The majority of people receiving a microcredit have secondary studies (42%), followed by further education (32%) that has increased compared to data from previous reports. The proportion of entrepreneurs with no qualifications remains very low and does not exceed 1%.
Regarding geographic origin, as in previous reports, 75% of the total are Spanish. Far behind them, 17% are from South and Central America and 6% from other European countries. Asians and Africans barely make up 1%.
65% of the total were already self-employed before the microcredit was granted and 19% were on a salary. The proportion of entrepreneurs who were previously unemployed stands at 15%, a lower percentage than recorded in previous reports, possibly related to economic recovery.
Granting microcredits, as well as the network of over 5,000 CaixaBank branches, involves entities that provide knowledge for the people receiving the loans, as well as advice and monitoring on the projects. To date, MicroBank has signed agreements with 566 social entities all over Spain that keep an eye on feasibility for the financed projects. Collaborating social entities might be any type of organisation with experience in economic or social assistance actions intended to strengthen setting up microbusinesses, promote self-employment and provide incentives for entrepreneurial business.
