European Commission/European Savings Banks Group Meeting Brussels, 12 December 2008 Javier Úbeda Head of Obra Social and Pledging Credit Spanish Confederation of Savings Banks (CECA)

1. BOOSTING MICROCREDIT: FINANCIAL SECTOR CHALLENGES European Commission/European Savings Banks Group Meeting Brussels, 12 December 2008 Javier Úbeda Head of Obra Social and Pledging Credit Spanish Confederation of Savings Banks (CECA)

2. BASIC 2007 MICROCREDIT STATISTICS

3. IN THE LAST SIX YEARS... No. of Loans 10,008 Sum of Loans (in millions of euros) 93.48

4. BASIC 2007 STATISTICS 3,085 24.18 Sum of loans (in millions of euros) Loans granted during the year

5. BASIC 2007 STATISTICS Average interest rate 4.86 Average delinquency rate 10.96% In 75% of the cases, delinquency in payment was less than 7.5%

6. BASIC 2007 STATISTICS Business Sector Trade Hotel and catering Personal services Other sectors (less than 10%) Total 27.02 12.41 10.89 49.68 100.00 %

7. RECIPIENT PROFILES

8. BASIC 2007 STATISTICS Latin America Africa European Union Asia Other regions Total 64.6 14.9 12.3 0.9 7.3 100.0 Immigrant's region of origin worldwide %

9. BASIC 2007 STATISTICS Immigrants Persons in long-term unemployment Single-parent households Unemployed youth Minorities Other Total 84.74 7.80 3.20 0.74 0.34 0.05 100.00 Type of recipient %

10. BASIC 2007 STATISTICS A 35 year old woman from Latin America requests an 8,000-euro loan to start-up a business: this is the dominant profile among individuals granted microcredit by Savings Banks.

11. THE CHALLENGE...

12. BACKGROUND Through the Spanish Confederation of Savings Banks (CECA), the Savings Banks have signed one microcredit agreement after another with Spain's Official Credit Institute (ICO) Main contribution: guarantees On their own, the Savings Banks have signed myriad agreements with local Governments Main contribution: vicinity-specific knowledge

13. BACKGROUND CECA currently holds a framework agreement with the Spanish Women's Institute which Savings Banks are free to join at their choosing Main contribution: loan analyses and studies A ministerial order whereby the State would take on the financial costs entailed in microcredit loans is currently under consideration

14. FUTURE OUTLOOK The lack of an integrated microcredit policy is going to make it very difficult for this activity to take off in the short and long term The financial crisis will answer doubts about whether microcredit serves more for social inclusion purposes or as a tool for entrepreneurs Whether or not an integrated policy is set into place and regardless, in large part, of the financial crisis, the Savings Banks will continue to grant microcredit, though likely at a slower rate

15. THE CHALLENGE For microcredit to be included in the product portfolios customarily offered by financial institutions, and by Savings Banks in particular The simple will or commitment of financial institutions will not suffice to achieve this objective; a true microfinance sector must be created in Spain This will require coordination between all governmental bodies to ensure that no effort is wasted and no resource squandered

16. CORPORATE CITIZENSHIP AND INSTITUTIONAL RELATIONS