MICROFINANCE INITIATIVES IN THE EUROPEAN UNION

There was long lasting consideration in developed countries that micro financing was a typical tool in anti-poverty and unemployment policy for underdeveloped and developing countries. Lately, especially after remarkable EU expansion when many east-European countries joined the EU, at the time going through financial crisis and recession among the old EU members, micro financing became an actual topic and was recognised by the European Commission as the tool for growing employment in the EU. Relaying on the experiences of the countries where micro financing has already existed, the European Commission started with institutional development of micro financing programme in the EU. The European Commission approached to this project in a very systemic way and the development of micro financing programme was implemented by some very important initiatives and programmes such as: CIP, JASMINE, JEREMIE and PROGRESS. The goal of this work is to introduce models and principles of micro financing programme development in the EU, along with comparison to the same development model in Bosnia and Herzegovina, achievements in implementation of those models and principles with the special review of interest rate paid by the EU micro financing users as well as the perspective of micro financing development in the EU and its possible implications on Bosnia and Herzegovina. The research results presented in this work are intended to be an input for both, legislative frame creation for micro financing in Bosnia and Herzegovina and producing strategic documents for local communities development in Bosnia and Herzegovina because of the fact that the local communities are responsible for encouraging entrepreneurial activities at their areas.