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                Micro credits have recently been promoted in Europe to deal with the problem of unemployment and encourage economic growth. This has been done by providing an opportunity for both micro enterprises and private individuals who wish to set up their own business to obtain financial support. Research has shown that to encourage more people to set up micro businesses there is no need to have the traditional banking services in order to obtain the financial support. The aim of providing the financial support through micro finance institutions is to reach those who shy off from getting finances from the banks because of the rigorous process that is involved.

                The micro credits targeted enterprises or businesses in Europe are those employing less than 10 people and the disadvantaged people in the society. The disadvantaged people are those considered to be inactive, unemployed, immigrants and those receiving social assistance. This targeted groups are the one's who would wish to go into business but are not able to do so because they do not have access to the traditional banking services and therefore lack the necessary finances to carry out their businesses.

                    The recent developments in micro credit have helped Europe to make several achievements like transition from unemployment to self-employment for the individuals who are provided with the financial support. Those people whose creditworthiness is below that required by banks and therefore the banks have "refused" to finance their projects because they do not have sufficient collateral are now able to get finances from the micro credit financial institutions. Micro credit has also helped to create many new jobs thus helping Europe to be able to address the problem of unemployment.

                    Europe has been able to make these developments in the field of micro credit, due to a number of reasons which are aimed at necessitating more improvements so that the full potential of micro credits institutions can be achieved. This has been achieved through improvement of both the institutional and legal environment within which micro credit is being operated. Taking the necessary steps, that favours entrepreneurship in the country. Providing training aimed at promoting best practices in the field of micro credit. The training targets both micro credit institutions and those receiving the financial support. In promoting best practices there should be a code of conduct for the micro credit institutions. The code of practice helps to increase confidence in the micro credit institutions as well as promote customer friendly and ethical practices.  Provision of additional financial capital to the micro credit institutions, so that they can be able to provide financial support to more people who need it is of paramount importance in enhancing the functions of micro-credit institutions in Europe.

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