After a year working at a pharmacy in Luxembourg, Syrian refugee Mahmoud Al-Fayyad heard about a local microfinance firm, microlux. “I have always been a passionate cook”, he thought. “Why not give it a try. After all, cooking is an excellent bridge to share one’s culture”. The food at the restaurant he opened is all homemade by Syrian refugee women. Syriously seats 100 people in a house donated for a symbolic EUR 1 by a property owner who met Mahmoud through the Luxembourgish Red Cross. It’s often fully booked for its two evening services.
“I am now employing eight people and I decided to repay the loan in two years,” he says. “This microcredit helped me to start a new life and contribute to the economy of my new homeland. I am very grateful to all the people who trusted and supported me right from the beginning”.
“I am very grateful to all the people who trusted and supported me right from the beginning”
Since March 2016, microlux, a microcredit institution supported by the European Investment Fund thanks to the EU’s Programme for Employment and Social Innovation, has been giving hope to Luxembourg’s small entrepreneurs. Although Luxembourg is a rich country with strong growth, it does contain pockets of job insecurity and poverty. No local microfinance institution previously targeted Luxembourg.
In Luxembourg, the EIF, which is part of the EIB Group, estimates the potential number of loan applications to be 400 over five years. That’s important, says Karin Schintgen, who represents microlux’s main shareholder BGL BNP Paribas, because “in Europe, 30% of new micro and small businesses are started up by people without jobs”.
A passion for tango
With a EUR 10,000 loan from microlux, Rodolfo Aguerrodi brought the tango from his hometown, Buenos Aires, to set up the Dance Factory in Luxembourg, where he has lived for three years. “I started out giving classes in the clubs of the European institutions, but I soon felt that there was a need to make the discipline more professional,” Aguerrodi says.
He repays EUR 258 per month. It’s a small amount, but it’s the kind of credit that keeps Europe’s economy oiled. “We could have carried on working without the loan, but it enabled us to get our head above water and concentrate on our core business,” says Aguerrodi.He employs eight teachers and has a full house almost every day of the week. That includes dance classes as therapy to treat Parkinson’s and Alzheimer’s disease.
So even in a generally rich country like Luxembourg, there’s demand for microcredit.