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Micro-Loans for the Socially Disadvantaged

Author: Anne
Published Date: 17 February 2010

Inspired by the Nobel Peace Prize Winner, Muhammed Yunus and his Grameen Bank, Social Development Centre SUS - in cooperation with the Municipality of Aarhus in Denmark – has launched a development project in which socially vulnerable people get professional coaching and take up micro-loans to start a new life as self-employed persons.


The project challenges existing thinking about retraining and work ability testing of unemployed and socially vulnerable people. It also challenges traditional bank principles of creditworthiness. And not least, gives socially vulnerable people who under normal circumstances would not be deemed creditworthy, an opportunity to establish themselves in the labour market and support themselves. The project is supported by the Ministry of Social Affairs in Denmark.


The aim of the project is to:

• Increase the entrepreneur’s individual empowerment

• Improve the entrepreneur’s academic and social skills

• Increase the entrepreneur’s social capital

• Increase the entrepreneur’s potential for full or partial autonomy.


At the same time, the project will provide:

• New tools in relation to retraining and work ability testing.


In the project, the entrepreneur is offered a credit of 1,000 to 50,000 Danish Kroner, to establish a business. The entrepreneurs receive personal coaching, professional business coaching and financial advice through the project. And they are part of a network of entrepreneurs who participate in training courses conducted by organizations like the Danish tax offices, communication companies, insurance companies, debt advisers from the Social Work and Legal Aid, loan care and financial counselling - including the planning and development of the business - performed by Merkur Bank. During the establishment of the businesses, consultants from Social Development Centre SUS and distinguished business coaches, have an ongoing personal contact with the entrepreneurs.


Status in 2010

During the pilot study, conducted from the middle of 2008 to the beginning of 2010, seven entrepreneurs established their own businesses: a graphic artist, a gardener, a gutter cleaner, a hairdresser, a ‘pet-sitter’, a chandler and a weed controller. One former entrepreneur didn’t start a business of his own but found permanent employment instead.

The project has developed a model for establishing businesses and micro-loans for socially vulnerable people in Denmark.