Italy CASE STUDY – Affordable Personal Inclusive Credit

01 September 2013

Position paper

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2013 – Italy CAPIC project partners

In Italy, during the last couple of years, microcredit projects based on a partnership model presenting similarities and some specificities have materialized in different regions and provinces. Such projects have come to life with the double objective of providing micro-enterprise loans and affordable personal credit to low income people that are not otherwise able to satisfy basic social needs (putting down a deposit for a rental, paying for a dental treatment, repairing a car used to reach the worksite, etc.). These experiences need to be analyzed in some detail in order to consolidate and improve them. The project included in this proposal started in the province of Pistoia in January 2010 thanks to the initiative of a not for profit organizations’ group of, a banking foundation, some local banks and financial cooperatives as well as the provincial administration. The contributions, functions and responsibilities of the partners and the operational principles of the project are defined in a partnership protocol signed by the partners.

The project partners and their roles

The project “Microcredit System in the Province of Pistoia” is supported and implemented by: three not for profit institutions, 6 cooperative banks, one local bank, one bank foundation (private company) and the provincial administration. The partners involved in the initiative contribute in different ways to the project depending on their institutional mission and the capacity and nature of their organization. The operational roles and financial commitments are specified below:

1) The financial institutions (6 cooperatives banks, 1 local bank, Cassa di Risparmio di Pistoia e Pescia ) are responsible for:

  • Providing 50% of the guarantee fund (covering the risk of the microcredits provided by the project)
  • Issuing the credits and monitoring them;
  • Participating in the Evaluation Committee responsible for approving (or rejecting) the credits that have passed the first screening assured by the project centers
  • Participating in the partnership committee

2) The not for profit organizations, are two church organizations, one confessional/social assistance organization and one private foundation. They provide the human resources (volunteers) to carry out the activities of the project centers which represent the first point of contact with prospective customers. Moreover, the confessional/social assistance organization (Confraternita della Misericordia) hosts the centers on its premises, while two of the not for profit partners (the Un Raggio di Luce Foundation and the Confraternita della Misericordia) also contribute financially as they provide 20% of the guarantee fund each. The Evaluation Committee, in which representatives of the not for profit organizations participate, periodically meets on the premises of the Misericordia. All the not for profit organizations are members of the partnership committee.

3) The provincial administration of Pistoia, as the public authority/institution involved in the project, contributes to the guarantee fund and, through the public welfare services, directs eligible prospective customers to the project centers. The role of the province will be expanded after the first project evaluation to take place in July 2011. A representative of the provincial administration participates in the partnership committee.

4) The banking foundation (Fondazione Cassa di Risparmio di Pistoia e Pescia) contributes to the guarantee fund and sits in the partnership committee.

Finance Watch Italy CASE STUDY – Affordable Personal Inclusive CreditCAPIC’ actions are supported by the European Community Programme for Employment and Social Solidarity (2007-2013) – PROGRESS. The information contained in this document does not necessarily reflect the position of the European Commission.

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