An interview with Jérémy Del Rosario and Samuel Paulus, Managers, microlux
Jérémy Del Rosario and Samuel Paulus are managers at microlux, Luxembourg’s first microfinance institution, since its creation in 2016.
Could you briefly describe your background and role within microlux?
Jérémy Del Rosario (JDR): After completing a Master in microfinance at the University of Nancy, I started out my career as an intern with ADIE, a microfinance institution established in France. I worked for this organisation as a microcredit advisor for 8 years. In this role I helped people without access to bank loans wanting to set up their own business and were asking for a loan from ADIE.
With microlux initiative, I was interested in the challenge of launching a microfinance institution in a new country.
At microlux, I am mostly in charge of handling client relations. I accompany them and present their loan application to the credit committee. I follow up on their files once the loan has been granted.
Samuel Paulus (SP): After completing a Master in tourism and business intelligence, I started my career working with entrepreneurs. I worked for 1,2,3 Go and Nyuko for 8 years where I supported innovative start-ups and social projects. Unfortunately, a lot of small projects were not able to get off the ground because they were not financially supported.
I was immediately won over by the microlux project. It is a concrete, active initiative that can help promoters of small projects. Microlux is a true tool for helping creating equal opportunities.
At microlux, I mostly handle back office tasks, namely administrative tasks, accounting, IT system, and relations with partners. However, as we are a small team of just two, Jérémy and I keep each other constantly informed about our individual tasks.
Could you describe the work done by microlux in inclusive finance? And what makes it different from the other inclusive finance actors?
SP: Microlux offers credits of up to €25,000 to people without access to bank loans and who want to start up a business in Luxembourg. This is the first microfinance institution that has been created in Luxembourg.
Microlux not only provides financial support to entrepreneurs but also helps them with their project via a network of volunteers. Prior to funding, the volunteers help the entrepreneurs with their business plan and coach the entrepreneur after the loan has been granted.
JDR: The credit application is quite easy: the person meets with microlux to discuss their project and personal background. If necessary, microlux can help them workout their business plan and then present their project to the credit committee.
This makes microlux approach unique. A specific attention is given to the client’s background; to how committed they are to their project. This can often be more important than just a simple business plan. Microlux also pays particular attention to over-indebtedness. Microlux clients mostly receive Luxembourg’s minimum guarantee income (RMG) and we don’t want them to be more vulnerable after the disbursement of the credit.
SP: The difference between microlux and other inclusive finance actors in Luxembourg is that the latter mostly work on improving access to financial services in emerging countries and microlux focuses on Luxembourg itself.
Why do small project developers not have access to bank loans in Luxembourg?
JDR: The main reason is that banks ask for guarantees that are too high and project developers are unable to provide them. These project developers often receive Luxembourg’s minimum guaranteed income, are unemployed and want to get back into work by another means but they are unable to come up with the capital banks may require.
Microlux does not request any capital but does require that a personal guarantor for 1/3 of the loan.
What is your key interest in inclusive finance?
JDR: It is important to work and promote the idea that everyone has the right to economic initiative. I feel very strongly about this. There is a gap between the traditional banking world and small business creators. In its own way, microlux is working towards bridging this gap.
SP: In Luxembourg, access to a bank account is not really an issue. Our clients all have access to a bank account. However, I think financial education is an important question. This means learning how to manage your money, not just the credit but also savings and the cash flow to run the daily business.
What are the biggest challenges for inclusive finance and how can Luxembourg and InFiNe.lu contribute to it?
JDR: Luxembourg is seen as a rich country but there are people living in precarious situations in Luxembourg. We need to face up this reality and make those who are “invisible become visible”. Over the past years, the issue of poverty and over-indebtedness in the country has become a more prevalent topic. People are gradually acknowledging that poverty exists within a segment of the population.
SP: It’s a challenge to make the Luxembourgish population understand what inclusive finance is. InFiNe.lu can play a role of communicator. Luxembourg is well known as a financial marketplace but we also need to show the other side of the finance sector. It’s not just about millions and billions. Microcredit, micro-insurance exist and we need to talk about them.
Microlux also advocates for simplifying the administrative process for entrepreneurs to create their business in Luxembourg.
InFiNe.lu is the Luxembourg platform that brings together public, private and civil society actors involved in inclusive finance. The value of InFiNe.lu lies in the wide range of expertise characterised by the diversity of its members.
With the support of
Picture 1 © Pallab Seth