How The EU And US Residents Use Microloans

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Why do residents of the developed countries use microloans? How does it work in different states? Learn some interesting facts about microlending in the article.

Global MFI Market

The online lending market is represented by two main areas: payday loans and installment loans. Of course, their number increases every day with the new home, business or tribal loans available on or other platforms. Considering that the market is still developing, we can see completely different statistics in the EU by microloans to GDP ratio:

  • Germany – 6%;
  • France – 11%;
  • Hungary and Poland –  more than 100%.

The microloan market in Poland is one of the most developed in the world, along with the US and UK markets. More than 60 microcredit companies are represented in Poland, including large financial corporations.

About 350,000 microloans are issued in the United States every day. The maximum interest rates in the US can reach 3% per day. In 2004, there were more microfinance company branches in California than McDonald’s and Burger King restaurants. The average size of a microfinance loan in the US is $9,732, which is ten times more than the average size of a microfinance loan in developing countries.

The Purpose of MFIs in Europe and the USA

Based on the results of the scoring, the portrait of a typical borrower gives us quite interesting statistics:

  • Age: 26-40 years old (50%).
  • Marital status: single (59%).
  • The number of microloans per year: 7-10.
  • Average amount: personal microloans – 1,500 euros, business microcredits – 7,000 euros. In the US, the average loan amount is from $500 up to $4,000.
  • Average term: personal microloans – 30 months, business microloans – 41 months.
  • Average interest rate: personal microloans – 19%, business microcredits – 10.7%.

Americans take short-term loans to earn. Small business loans allow owners to more efficiently manage their operations without interrupting production processes. At the same time, 67% of borrowers demonstrate a significant increase in their income as a result of taking a business loan.


In Europe, most MFIs offer both business and personal microloans, and very few MFIs provide exclusively personal microloans. Despite the fact that individual microloans show a noticeable growth, most microloans are still issued for business (71%). The EU financial support focuses on MFIs that provide finance loans for income, rather than personal needs of clients.

Microloan conditions widely vary throughout the European countries. The average annual interest rate on a business microloan varies from 3% in Poland and Finland to 28% in France and Serbia. As for personal microloans, the interest rate can differ from 4% in Italy and France to 41% in the UK. The difference in legislation and state regulation makes the loans more affordable in some countries than in others.

Taking all the mentioned above into consideration, living in Europe or the US has its own advantages. However, paying off debts will cost you different sums in different counties. So, borrow wisely and pay back on time!