Open Days – Investor Cafè DG Regional Affairs Brussels, 9 October 2008 PROJECT SMOAT Tuscan Oriented and Assisted Microcredit System Daniela Sole Credit Analyst – SMOAT Project Angela Tanno ABI – CSR Unit “CSR and financial inclusion” EU LAB on financial inclusion

2 ABI – a brief overview The ABI is the trade association of the Italian banking and financial sector. THE ORGANISATION CSR WG (since 2001) Member banks accounted for more then 80% of total banking assets  GENERAL MANAGER’S STAFF CSR Unit  LEGAL DEPARTMENT  UNION AND LABOUR DEPARTMENT  CORPORATE  RETAIL  EXTERNAL RELATIONS DEPARTMENT  RESEARCH CENTRE  INTERNAL RESOURCES DEPARTMENT  SECRETARIAT AREA REGIONAL COMMISSIONS UNIT

3 Financial inclusion - Definition and targets Financial inclusion is understood as the provision of access to appropriate financial services and products, at affordable cost, to the majority of the population. The domestic scenario in which Italian banks operate today features novel needs and demands. There are now new customers turning to banks: temporary workers, the not-for-profit sectors, low- income families, micro-enterprises operating in disadvantaged areas of the country, immigrants, etc. Social inclusion Financial inclusion Fostering the engagement of different stakeholders is necessary to resort to a complex set of policies aimed at promoting and supporting development. Fostering innovation and entrepreneurship in sustainable products and services which address societal needs Contribution to the EU Alliance on CSR (promoted by the European Commission in March 2006)

4 Objective The EU Lab on financial inclusion ABI CSR Unit ABI In-house team Inter-bank WG on CSR Lab on financial inclusion Institutions Stakeholders Experts/ consultants CSR Europe/ National Partner Organization …different players involved ●Banks and financial inclusion: survey in Italy (II edition) ●The financial needs of migrants: a demand-side study ●Collecting best practices ●Publishing the final results ●IV CSR Forum (Roma - 27, 28 January 2009) Work in progress … …deliverables Banks can support the financial inclusion of new customers, through innovatory dedicated methods and tools, complying with criteria of cost-effectiveness.

5 Financial Inclusion Laboratory: preliminary findings of the conducted research Initial findings of the undertaken research Microfinance services offered by banks 19.8% 31% 49.1% Savings Credit Current accounts and payment services Source: ABI Research centre and CSR Unit Saving accumulation / management % of tot finance Automatic debit / credit to account Percentage of use of certain banking services by immigrant clients of banks

6 The Lab on financial inclusion – Dissemination at local level ABI’s Regional Commissions on financial inclusion Ongoing activities to deliver locally the findings of the undertaken research and share best practices  Seminars/Workshops  ABI’s Regional Commission meetings  Mapping ongoing activities run by local public administration on CSR/financial inclusion  Sharing information through participating in local networks Tuscan Regional Government/ PROJECT SMOAT

7 In our Tuscan Regional Government access to credit is very important to improve local development and to create sustainable enterprises rendering bankable entrepreneurs who before were unbankable. It’s not through charity but in a most effective and productive way. SMOAT is designed with the Human being in mind, while at the same time being founded on market principles of competitiveness and sustainability. The beginning of our action Started-up from the path of Fabrica Ethica and Regional Ethical Committee on Corporate Social Responsibility that in 2004 create a study-group on access to credit 2006 Agreement between Tuscan Regional Government and 16 banking institutions to create a public guarantee fund for Tuscan SMEs with a specific session dedicated to microcredit, Thanks to which the enterprises obtain l'80% of public guarantee 2007 Launched on the 15th of January 2007, SMOAT supports the entrepreneurs through start-up orientation, training, counselling and tutoring for 2 years since credit concession Access to credit 7

8 Mission SMOAT as Microfinance Project is providing small loans for self-employment and proving to be sustainable enterprises We believe that a combination of expanded financial and non financial services can help an entrepreneur succeed by: o building their self-confidence increasing their income o productivity o employment o facilitating the personal growth of the entrepreneur Strategic Skills Take an Entrepreneur (Micro-entrepreneur) from the start-up phase to the next level in business management, through non-financial services: o Management and vocational skill training o Consultancy and Advisory services o Marketing assistance o Access to information o Business training o Networking o Mentoring 8

9 Beneficiaries o Entrepreneurs or potential entrepreneurs who cannot access capital from traditional financial institutions o Based in Tuscany o Micro-enterprise started-up until 36 months Smoat prepares the project document, develops the business plan and training program materials, organizes training programs for capacity building. Loans Loans offered range from Euro To pay off on a monthly basis from 36 to 60 instalments (3-5 years). Achievement SMOAT has reached since 2007 more than 600 borrowers 37% of its borrowers are migrantes 29% are women 44% are young entrepreneures Up until this point, SMOAT has given out loans totaling about 6 milion Euros The repayment rate has been over 99 percent. 9

10  SMOAT is an important project that becames self-sustaining.  Our experience in Microcredit suggests that is possible for the Institutions to reach the goal of serving people in poverty without having to sacrifice their profitability.  In Tuscany there is an increasing awareness about the power of microcredit, and the need to support its growth. Many players have committed themselves to its promotion. More banks and associations are coming forward with different support packages for local entrepreneurs, offering them practical and confidential counsels, and helping them to take their ideas off the drawing board, commercialize them, and capture new opportunities.  Some SMEs started up by SMOAT: 10

11 Thank you