NEENA Gill, Labour MEP for Stourbridge, addressed the European Parliament on the need for small loans to be given to businesses during the current economic crisis.

Neena said: “The extension of microcredit will underpin small businesses’ economic recovery.”

She called on the government of the European Union, the European Commission, to take urgent action: “We need his type of legislation more than ever but legislation on its own is not enough. The Commission has to make sure it is transformed into real action.

“This report is not just about entrepreneurship. Microcredit also delivers social cohesion - it encourages people to take ownership of their lives, and their potential.”

Pioneered by Bangladeshi economist Muhammad Yunus, micro-credits have become a way for people in the developing world to access credit allowing them to start up mini-businesses.

Now the European Parliament wants to extend the scheme to people in Europe.

Neena said: “Establishing a firm can be a daunting process. The EU needs to do more by providing proper legal advice on setting up a business.

"One way to do this would be to establish a European network of lawyers prepared to give advice to micro-business start-ups, initially on a pro bono basis.

“Many European companies’ economic recovery plans have rightly focused on supporting the key industrial sectors such as banking and the car industry. But now is the time we turned our attention to small businesses too.”