This edition of the EMN microfinance sector survey presents a European microfinance sector that is young, diverse and growing steadily. The majority of EU 15 microlenders began lending between 2000 and 2005 whilst lenders in the new member states started in the 1990’s. Microlenders take varying forms related to the legal and regulatory environment in their respective countries. Some focus on socially excluded and unemployed persons and others on SME growth. All are united by a desire to address exclusion from mainstream financial services. The success of market leaders has encouraged new entrants. New actors and improved coverage have contributed to year on year growth in loan disbursements. Combining business support services with access to finance, microlenders are enabling increasing numbers of entrepreneurs to start and grow their businesses. This second sector survey covers the years 2004 and 2005 with data from 110 microfinance actors operating in the EU 25. For the purposes of this report, the EU 25 includes EU 15 countries, Norway and Switzerland and 3 new member states with active microlending programmes: Hungary, Poland and Slovakia.