Petit dejeuner Phitrust Partenaires - PERMICRO - 3/03/2011

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Petit dejeuner Phitrust Partenaires - PERMICRO - 3/03/2011

  1. 1. PERMICRO – MICROCREDIT IN ITALYParis, 3rd March 2011
  2. 2. WHAT MICROCREDIT IS IN EMERGENT COUNTRIES What Microcredit is • Microcredit is the provision of a credit charaterized by: Low amount; Absence of guarantee, because it is based on a fiduciary relationship; Given to persons in situations of economic hardship, excluded from the traditional financial system, With the aim of starting or developing a small business. When it develop • The instrument of microcredit became popular in 1977 with Grameen Bank, of which Yunus won Nobel Peace Prize 2006. It developed rapidly in the rest of Asia and Latin America. At the beginning… • At first, in developing countries the business model is strongly related to a non-profit logic. And now… • Over time, however, the model evolves towards a financial one, so that today this sector is characterized by the presence of operators: highly professional, and economically sustainable. In general, these operators not only cover their structure cost by applying high interest rates (> 20%) and contains the default, but still manage to get good margins. 2/32
  3. 3. MICROCREDIT CHALLENGE IN INDUSTRIALIZED COUNTRIES Characteristics of the business model used so far in the industrialized countries • Local / limited amount of credit disbursed • Extreme fragmentation of know how and lack of credit scoring models • Poor reproducibility and uncertainty about the length The reasons behind this model Approach that interprets the microcredit as a tool for "active labor market policies” in support of the weak social groups, believing that it should be disbursed into a welfare system: Loans are granted at interest rates close to zero; The operational team is made up primarily of volunteers; There is a strong dependence on public funds (state or the EU) and / or private donations. Critical issues of the sector that makes the challenge more complex than in developing countries • High cost of infrastructure, such as economic and human capital • Ceiling rate to fight usury • Generally higher rate of default Conclusions • Developing countries Sustainability • Industrializing countries Non-sustainability However, the new generation of microfinance institutions begins to become, even if slowly, a professional structure with the ultimate goal of self-sustainability 3/32
  4. 4. MICROCREDIT DEMAND IN ITALY In the industrialized countries the target is not only the business activities, but even “unbankable”, persons excluded from traditional banking system: Richiedenti Microcredit to Microcredit to enterprise UNBANKABLE UNBANKABLE family SOCIAL ENTEPRENEURIAL ENTEPRENEURIAL SOCIAL NETWORK IDEA CAPACITY IDEA CAPACITY NETWORK Demand in Italy is growing up because of the following factors: • Increased number of immigrants (+13,4% in 2008 – Source: ISTAT, Ott. 2009) • Big presence of microenterprise (94,8% of enterprises are microenterprises, occupy il 47,4% of workforce, developing 32,5% of added value – Source: ISTAT, Ott.2009) • Increase of financial exclusion (10,8% of workforce doesn’t have a bank account – Source: Banca d’Italia, Household wealth in Italy – 2008) • Increase in poverty (11,3% of families living in relative poverty condition – Source: ISTAT, Lug.2009 and 19% Italian population at risk of poverty in 2008 – Source: EUROSTAT, Feb.2010) • Increase of unemployment (8,6% in2009 – Source: ISTAT, Marzo 2010) • Reduction of the support of welfare state. 4/32
  5. 5. MICROCREDIT SUPPLY IN ITALY Triangle model Guarantee fund PerMicro Model 3 in 1 to cover credit risk 3 2 Bank Volunteers Guarantee found disbursing the microcredit analizing the requests Credit Risk Management 4 1 Bank Volunteers Direct disbursment Professional Team Clients Clients 5/32
  6. 6. PERMICRO: A POSSIBLE RESPONSE TO THE CHALLENGE OF MICROCREDIT PerMicro was born in 2007 in Turin with the ambition of distinguish itself from other operators: • Using a team composed only by professional people, who believe in what they do, growing day by day and having fun building innovation and opportunities for others, vs team of volunteers • Placing a clear social objective and a declared research of an systematic and operational model near to market aspects, vs welfare approach • Developing a credit scoring and standardized procedures data base vs know how fragmentation • Primarily taking credit risk vs use of guarantee funds • Aims to achieve significant volume vs limited size • Developing to the all Italian territory throughout local branches, as a financial intermediary authorized and supervised by the Bank of Italy (ex. Art 106 TUB), vs fragmentation of the proposal • Aiming to a more economic self-sustainable in the medium term vs grants dependence PerMicro is now the leading microcredit institution in Italy for number of microcredits allocated and for total amount disbursed (1055 practices for a total amount of 5.271.879 €) 6/32
  7. 7. PERMICRO: COMPANY STRUCTURE FOUNDERS Oltre Venture Its the first Italian Venture Capital. It was created to develop new sustainable social enterprises, able to meet the growing demand for services by citizens belonging to the social fragility area. Oltre Venture follows closely the activities PerMicro, participating in the Executive Committee and the Committee for Resolution of microfinance. (www.oltreventure.com) Fondazione Paideia The foundation works to improve the living conditions of children living in difficult situations, providing practical help to those who are daily engaged in this task in the health, education, welfare and recreation. (www.fondazionepaideia.it) The share capital now amounts to 4,316,800 € deliberate, subscribed and paid up capital amounts to € 3,267,100. ... PerMicro can count on active and dynamic members 7/32
  8. 8. PERMICRO: COMPANY STRUCTUREOTHER MEMBERSUBI BancaIt s the fifth largest banking group in Italy for number of branches, with a market share of around 6% and asignificant presence in the regions with the highest potential of the country. UBI Banca is a cooperative Group,listed on the Milan Stock Exchange and included in the S & P / MIB.(www.ubibanca.it)Fondazione Sviluppo e crescita – CRTIts a non-profit organization that contributes to the development and growth, fostering the exchange ofscientific and technological culture, development of personal talents, environmental, artistic and cultural of theterritory.(www.fondazionecrt.it/index/eventiNews/news/Fond_svil_cresc.htl)PhiTrustPhiTrust Active Investors is a management company approved by the national French Financial Markets (AMF)which develops strategies to encourage equity investment companies listed to improve their governance andto meet the challenges of todays world.(www.phitrust.com)FEIFounded in 1994, the European Investment Fund is a company that deals with Venture Capital and PrivateEquity. Luxembourg-based, the EIF belong to the EIB – European Investment Bank. In particular, it providesinnovative financial products for small and medium enterprises.(www.eif.org) ... PerMicro can count on active and dynamic members 8/32
  9. 9. PERMICRO: PROXIMITY OPERATIONAL MODEL The PerMicro activity is based on network credit: "The social network of reference acts as intermediary between clients and PerMicro, providing for them morally and accompanying development activity”. PerMicro Evaluation and Selection Network Pre - selection Clients Clients Clients Clients Clients PerMicro networks are associations, ethnic communities, community centers, churches, cooperatives, etc.. and have a strong interest in ensuring that the customer repay the credit: • if the associated repay the loans, the network will be "rewarded" with better economic conditions; • if members do not repay it, it will be more difficult / expensive for other members taking loans. ... PerMicro interacts closely with the landmark territory 9/32
  10. 10. PERMICRO: OUR TARGET • According to the Bank of Italy, 10.8% of families suffer from financial exclusion. • As in the other industrialized countries even in Italy PerMicro doesnt address only to the microenterprises sector, but also to the “unbankable”, with the aim of giving concrete opportunity at this group. (reducing at the same time the risk) • PerMicro address to Italian and foreign, with low access to traditional banking services, belonging to the following two macro-categories: - Micro-Entrepreneurs: carry a valid business idea and have adequate technical skills but with financial difficulties. - Families: people with jobs and income that are able to obtain, through micro-credit opportunities, socio- economic improvement for themselves, their family and society. • PerMicro fight against financial exclusion increasing the human capital of every individual, promoting local economic development based on personal responsibility. ... PerMicro is an opportunity for the excluded 10/32
  11. 11. PERMICRO: TERRITORIAL DEVELOPMENT In order to strengthen and develop the company, it was decided to concentrate efforts on a limited number of branches. The reasons behind this choice are manifold: - Intensify the knowledge of each territory so that the network credit could work - Substantial costs associated with management of the branch - Standardize the procedures before of a widespread expansion So, at national level, were confirmed the following ten territorial branches in partnership with associations, foundations and local institutions: Bergamo, Brescia, Milan, Turin, Rome, Padua, Florence, Genoa, Bologna, Pescara. ... PerMicro is close to the associations and social parteners 11/32
  12. 12. PERMICRO: INSTITUTIONAL NETWORK SUPPORT PerMicro has attracted strong interest from major players in the world of microfinance, both locally and internationally, and more generally by all government agencies: • The Bank of Italy, ABI and the Treasury are in constant contact to monitor the evolution of the market and measure the social impact • The company also collaborates with national credit bureau to create the first credit-scoring system of microcredit • Regions and municipalities have launched joint-venture operations, participating in activities both financially and operationally, to promote micro-credit activities in their territories • In 2009 PerMicro won the PerMicro FGDA Microfinance Award for Best Italian Institution and was a finalist for the European award; in 2010 received a Special Mention. • The company is among the 15 European institutions selected by the European Investment Fund for Technical Assistance • PerMicro also has relationships with many professionals working in the voluntary sector, relationships with more than 1400 networks and 370 local cooperatives and is a founding member of RITMI - Italian Network of microfinance operators - and an active member of the European EMN (European Microfinance Network) ... PerMicro is one of the landmarks of the third sector 12/32
  13. 13. PERMICRO: THE EUROPEAN SUPPORT PerMicro is supported by the European Union through the programs of support for microcredit institutions launched and managed by the EIF - European Investment Fund:i: JASMINE Technical Assistance JASMINE was founded in 2008 with the aim of helping microfinance institutions to increase the quality of their operations, to grow and become sustainable: PerMicro was chosen as one of 15 microfinance institutions in receipt of technical assistance. In late September Microfinance Rating, a specialized and independent agency, met PerMicro to begin a process of evaluation and training on the theme "Good Governance + Management Information Systems Strategic Planning + Risk Management”. EPPA EPPA Contribution Agreement is born in March 2010 with the aim of providing financial support to micro-finance intermediaries selected to promote the development of microcredit on the basis of sustainability. EPPA resources, amounting to € 4 million will be targeted at microfinance institutions. PROGRESS - EPMF European Microfinance Facility Progress is a new initiative of the European Commission and the EIB Group to increase lending activity to micro-beneficiaries through a wide range of financial intermediaries such as microfinance institutions and small banks. EPMF provide up to 100 million euros over a period of 6 years in the form of guaranteed products and instruments financed. PerMicro requires a guarantee fund to micro-loan and expects to have a wider pool of financial support. 13/32
  14. 14. CONTACTS, INTERVIEW, FINANCED MICROCREDIT TO ENTERPRISE MICROCREDIT TO FAMILY CONTACTS 3.111 2.527 1.454(57%) 1.926(61%) INTERVIEW 225 (9%) 830(26%) FINANCED 14/32
  15. 15. MICROCREDIT TO ENTERPRISE: CONTACTS Continent PRIMO CONTATTO Nationality N° N°/Total Nationality ITALY 1.029 40,7% Romania 162 6,4% EUROPE Albania 16 0,6% Other Europe 60 2,4% Morocco 201 8,0% East n.d. Senegal 172 6,8% Europe Latin Nigeria 119 4,7% Egypt 45 1,8% America AFRICA Tunisia 40 1,6% 9,4% 5,7% 7,4% Asia Ivory Coast 31 1,2% 9,3% Congo 20 0,8% Other Africa 68 2,7% Italy Bangladesh 94 3,7% Pakistan 58 2,3% ASIA Philippines 26 1,0% India 21 0,8% 40,7% Other Asia 36 1,4% Peru 71 2,8% 27,5% Ecuador 42 1,7% LATIN Brazil 22 0,9% AMERICA Venezuela 9 0,4% Africa Other Latin America 42 1,7% N.D. 143 5,7% TOTAL 2.527 100% 15/32
  16. 16. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS ITALY 37 16,4% Romania 21 9,3% Albania Bulgaria 4 3 1,8% 1,3% Nationality EUROPE Ukraina 3 1,3% Kosovo 1 0,4% Macedonia 1 0,4% East Latin Moldavia 3 1,3% Poland 2 0,9% Europe America Senegal 25 11,1% Italy Asia Nigeria Morocco 23 23 10,2% 10,2% 16,9% 7,6% Ghana Sudan 4 4 1,8% 1,8% 19,1% Burkina Faso 2 0,9% AFRICA Camerun Ivory Coast 1 1 0,4% 0,4% 16,4% Egypt 2 0,9% Ethiopia 1 0,4% Kenya 2 0,9% Congo 1 0,4% Tunisia 1 0,4% Bangladesh 29 12,9% Pakistan 4 1,8% Philippines 4 1,8% Afghanistan 1 0,4% 40,0% ASIA Thailandia 1 0,4% Cina 1 0,4% Africa Japan 1 0,4% India 1 0,4% Sri Lanka 1 0,4% Ecuador 7 3,1% Peru 5 2,2% LATIN Argentina 2 0,9% AMERICA Rep. Dominicana 1 0,4% Brazil 2 0,9% TOTAL 225 100% 16/32
  17. 17. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS Gender Women 40% 60% Men Status Single 31% Married 51% 6% 5% 1% Cohabitant 5% Divorced Widoved Separated 17/32
  18. 18. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS SETTORE DATTIVITA N.Agricolture 1 Activities sectorFood services 16Craftmanship 19Itinerant trade 66Sedentary trade 29 Food service 7% Agricolture 0% Transportation 6%Culture 11 Craftmanship 8% Counselling 8% Human care service 5%Building 8 Food and beverage 4%Import Export 6Phone Center 17Food and beverage 10 Phone center 8%Human care service 11 Import-export 3% Itinerant trade 29%Counselling 18 Building 4%Transportation 13 Culture 5% Sedentary trade 13% TOTALE 225 18/32
  19. 19. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS Purpose Start-up 37% Development 52% Formalisation 5% Take out activity 5% 19/32
  20. 20. MICROCREDIT TO ENTERPRISE : PORTFOLIO MICROCREDITO IMPRESA N. Microcredits 225 TOTAL Tot. Disbursed € 1.693.775 Minimum € 2.000 AMOUNT Medium € 7.527 Maximum € 26.500 LENGHT Minimum 12 (N. Medium 38 Installments) Maximum 84 TAN Mimimum 9% INTEREST RATE TAN Maximum 12% 20/32
  21. 21. MICROCREDIT TO FAMILY: CONTACTS PRIMO CONTATTO Continent NazionalitY N° N° /Total Nationality ITALY 1213 39,0% Romania 267 8,6%EUROPE Ukraina 84 2,7% Other Europe 93 3,0% Senegal 116 3,7% Morocco 108 3,5% Nigeria 50 1,6% Ghana 28 0,9% n.d. Latin East Ivory Coast 18 0,6% America 6,1% 9,2%AFRICA Egypt 14 0,5% Europe 14,3% Togo 11 0,4% Camerun 8 0,3% Tunisia 14 0,5% 18,5% Asia Congo 10 0,3% Other Africa 26 0,8% Italia Italy Philippines 336 10,8% Georgia 81 2,6% Bangladesh 58 1,9% 39,0% Africa ASIA Pakistan 43 1,4% 13,0% India 26 0,8% Other Asia 30 1,0% Peru 91 2,9% Ecuador 101 3,2% LATIN Brazil 21 0,7% AMERICA Colombia 22 0,7% Other Latin America 52 1,7% N.D. 190 6,1% TOTAL 3111 100% 21/32
  22. 22. MICROCREDIT TO FAMILY: FINANCED CLIENTS Continent Nationality N° N° /Tota ITALY 161 19,4% Romania Ukraina 112 46 13,5% 5,5% Nationality Moldavia 17 2,0% EUROPE Jugoslavia 5 0,6% Albania 7 0,8% Poland 5 0,6% Byelorussia 2 0,2% Latin Other Europe 11 1,3% Senegal 28 3,4% Oceania America Morocco 21 2,5% 0,1% 10,5% Nigeria 8 1,0% East 24,7% Asia Ivory Coast 6 0,7% AFRICA Togo 5 0,6% Europe Egypt 4 0,5% Tunisia 5 0,6% Other Africa 13 1,6% Philippine 198 23,9% 34,5% India Bangladesh 22 20 2,7% 2,4% Italy ASIA Pakistan 18 2,2% 19,4% Sri Lanka 9 1,1% 10,8% Other Asia 19 2,3% Peru 29 3,5% Ecuador 29 3,5% Africa Brasile 5 0,6%LATIN Santo Domingo 7 0,8%AMERICA Bolivia 4 0,5% Colombia 3 0,4% Other Latin America 10 1,2%OCEANIA Australia 1 0,1% TOTAL 830 100% 22/32
  23. 23. MICROCREDIT TO FAMILY: FINANCED CLIENTS Gender Men Women 45% 55% Status Widowed Single 5% 28% Married 52% 7%3% 4% Cohabitant Divorced Separate 23/32
  24. 24. MICROCREDIT TO FAMILY: FINANCED CLIENTS Purpose FINALITA N. Debt consolidation Others Personal expenses Activity expenses 18 5,1% 2,8% 0,8% Car expenses 92 Activity expenses 2,2% Spese viaggi Family expenses 159 Car expenses 1,5% Training expenses 25 11,1% Medical care expenses 70 Home expenses 382 Family expenses Home expenses Travelling expenses 12 19,2% 46,0% Training expenses Personal expenses 7 3,0% Debt consolidation 42 Medical care expenses Other 23 8,4% Total 830 24/32
  25. 25. MICROCREDIT TO FAMILY: PORTFOLIO MICROCREDITO FAMIGLIA N. Microcredits 830 TOTAL Tot. Disbursed € 3.578.104 Minimum € 1.035 AMOUNT Medium € 4.310 Maximum € 16.840 Minimum 12 LENGHT Medium 26 (N. Installments) Maximum 60 TAN Minimum 8% INTEREST RATE TAN Maximum 11% 25/32
  26. 26. MICROCREDITS DISBURSED BY BRANCHES MICROCREDIT MICROCREDIT BRANCH TO TOTAL TO FAMILY ENTERPRISE Padua 7 36 43 Bologna 3 6 9 Brescia 15 100 115 Florence 4 62 66 Genoa 22 59 81 Milan 5 37 42 Pescara 33 111 144 Rome 27 32 59 Turin 101 319 420 Other 8 68 76 TOTAL 225 830 1055 26/32
  27. 27. SUMMARY TOTAL 2007 2008 2009 2010 2011 (31/01) Contacts 5.638 0 934 2.171 2.216 317MC to enterprise 225 0 41 88 87 9MC enterprise disbursed € 1.693.775 € 0 € 317.620 € 643.709 € 637.404 € 95.043,00MC to family 830 4 75 186 514 51MC fam ily disbursed € 3.578.104 € 26.378 € 400.808 € 872.809 € 2.059.558 € 218.551,00 Total Microcredits 1055 4 116 274 601 60 Total Disbursed € 5.271.879 € 26.378 € 718.428 € 1.516.518 € 2.696.962 € 313.594,00 27/32
  28. 28. MICROCREDITS STORIES Activity Shoemaker Amount disbursed 10.000 euro (for taking out the activity) Moral guarantor Jehovahs Witnesses Congregation (Latin America Section)Isabel is a woman of sixty coming from Argentina, moved to Italy tofollow his daughters. After more than 20 years of experience in thefootwear industry in the country of origin, Isabel wants to open asmall repair shop for shoes and bags. In the neighborhood whereshe lives there was the chance of detecting a small cobbler, but theinvestment is enormous. Isabel, accompanied by JehovahsWitnesses that ensure its reliability, was addressed to PerMicro.The Isabel accuracy, timeliness, professionalism convince PerMicro,that give her the microcredit. Today Isabel works in the shop withher husband and punctually pays microcredit installments. 28/32
  29. 29. MICROCREDITS STORIES Activity Phone Center Amount disbursed 10.000 euro (for taking out activity) Moral guarantor Associazione Sudanese di TorinoMohammed is a political refugee from Darfur (Sudan).Upon his arrival in Italy he works as a welder for a coupleof years, however, he desires starting his own business. Heis very determinate and invests all his savings to detect aphonecenter, closed for several months. The idea ofbuying keyboards and software in Arabic with the aim ofattracting a specific customer in a neighborhood with highArab presence also like to PerMicro, who decides tofinance the project after the path of business planning.Today phonecenter has become an important meetingplace for the Sudanese community in Turin. 29/32
  30. 30. MICROCREDITS STORIES Activity Romanian food retail Amount disbursed 6.000 euro (purchasing the goods and the equipment) Moral guarantorRadu moved to Italy 12 years ago. Since the beginning, he started workingas a bricklayer, plumber, carpenter, but working as an employee didntsatisfied him completely. He desires starting an own business to ensure abetter future for his daughters and his wife. He contacts PerMicro with aclear idea: detecting a space where selling Romanian products and foods.So he rents a warehouse and renovates it completely. The Radu strongentrepreneurial spirit and determination convinces PerMicro, that giveshim a loan, which is used for rent, equipment and the payment of the firstsupplies. 30/32
  31. 31. MICROCREDITS STORIES Activity South American food Amount disbursed 5.000 euro (for taking out activity and purchasing the goods) Moral guarantor -Chilean by birth, now Italian by adoption, Marcela has a cuisine oftypical food of his country. After moving to Italy in 2000, she decided,two years after, to take out a shop selling ethnic food. The activity hasalready started, but Marcela, young and with big desire to set up a localdynamic and original, decided to detect and renew them. Sherefurbishes part of the local, sells typical dishes and sets up a sort ofoutdoor area. Despite her young age, her great determination convincesPerMicro, who decides to grant the requested micro-credit. Marcelanow works in his food shop, helped by her boyfriend and her shop is theonly one selling South American dishes in the area. 31/32
  32. 32. CONTACTS PerMicro Corso Massimo DAzeglio 74 011 658778 www.permicro.it Thanks for your attention!

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