PerMicro is a microcredit institution operating in Italy. It provides small loans to entrepreneurs and families who lack access to traditional banking. In its first 3 years of operation, PerMicro received over 3,000 contacts seeking microloans, interviewed over 1,800 applicants, and financed 225 loans totaling over €225,000. The majority of contacts and financed clients were Italian, with immigrants from Africa, Asia, and Latin America making up most of the remainder.

1. PERMICRO – MICROCREDIT IN ITALY
Paris, 3rd March 2011

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.
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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
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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.
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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
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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 €)
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7. PERMICRO: COMPANY STRUCTURE
FOUNDERS
Oltre Venture
It's 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
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8. PERMICRO: COMPANY STRUCTURE
OTHER MEMBERS
UBI Banca
It 's the fifth largest banking group in Italy for number of branches, with a market share of around 6% and a
significant 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 – CRT
It's a non-profit organization that contributes to the development and growth, fostering the exchange of
scientific and technological culture, development of personal talents, environmental, artistic and cultural of the
territory.
(www.fondazionecrt.it/index/eventiNews/news/Fond_svil_cresc.htl)
PhiTrust
PhiTrust 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 and
to meet the challenges of today's world.
(www.phitrust.com)
FEI
Founded in 1994, the European Investment Fund is a company that deals with Venture Capital and Private
Equity. Luxembourg-based, the EIF belong to the EIB – European Investment Bank. In particular, it provides
innovative financial products for small and medium enterprises.
(www.eif.org)
... PerMicro can count on active and dynamic members
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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
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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 doesn't 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
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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
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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
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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.
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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
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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%
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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%
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17. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS
Gender
Women 40%
60%
Men Status
Single
31%
Married 51%
6%
5%
1%
Cohabitant
5%
Divorced
Widoved Separated
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18. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS
SETTORE D'ATTIVITA' N.
Agricolture 1
Activities sector
Food services 16
Craftmanship 19
Itinerant trade 66
Sedentary 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 6
Phone Center 17
Food 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
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19. MICROCREDIT TO ENTERPRISE: FINANCED CLIENTS
Purpose
Start-up
37%
Development
52%
Formalisation
5%
Take out activity
5%
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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%
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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%
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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%
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23. MICROCREDIT TO FAMILY: FINANCED CLIENTS
Gender
Men
Women 45%
55%
Status
Widowed
Single
5%
28%
Married
52% 7%3%
4% Cohabitant
Divorced
Separate
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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
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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%
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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
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27. SUMMARY
TOTAL 2007 2008 2009 2010
2011 (31/01)
Contacts 5.638 0 934 2.171 2.216 317
MC to enterprise 225 0 41 88 87 9
MC enterprise disbursed € 1.693.775 € 0 € 317.620 € 643.709 € 637.404 € 95.043,00
MC to family 830 4 75 186 514 51
MC 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
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28. MICROCREDIT'S STORIES
Activity Shoemaker
Amount disbursed 10.000 euro (for taking out the activity)
Moral guarantor Jehovah's Witnesses Congregation (Latin America
Section)
Isabel is a woman of sixty coming from Argentina, moved to Italy to
follow his daughters. After more than 20 years of experience in the
footwear industry in the country of origin, Isabel wants to open a
small repair shop for shoes and bags. In the neighborhood where
she lives there was the chance of detecting a small cobbler, but the
investment is enormous. Isabel, accompanied by Jehovah's
Witnesses 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 with
her husband and punctually pays microcredit installments.
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29. MICROCREDIT'S STORIES
Activity Phone Center
Amount disbursed 10.000 euro (for taking out activity)
Moral guarantor Associazione Sudanese di Torino
Mohammed is a political refugee from Darfur (Sudan).
Upon his arrival in Italy he works as a welder for a couple
of years, however, he desires starting his own business. He
is very determinate and invests all his savings to detect a
phonecenter, closed for several months. The idea of
buying keyboards and software in Arabic with the aim of
attracting a specific customer in a neighborhood with high
Arab presence also like to PerMicro, who decides to
finance the project after the path of business planning.
Today phonecenter has become an important meeting
place for the Sudanese community in Turin.
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30. MICROCREDIT'S STORIES
Activity Romanian food retail
Amount disbursed 6.000 euro (purchasing the goods and the
equipment)
Moral guarantor
Radu moved to Italy 12 years ago. Since the beginning, he started working
as a bricklayer, plumber, carpenter, but working as an employee didn't
satisfied him completely. He desires starting an own business to ensure a
better future for his daughters and his wife. He contacts PerMicro with a
clear idea: detecting a space where selling Romanian products and foods.
So he rents a warehouse and renovates it completely. The Radu strong
entrepreneurial spirit and determination convinces PerMicro, that gives
him a loan, which is used for rent, equipment and the payment of the first
supplies.
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31. MICROCREDIT'S 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 of
typical 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 has
already started, but Marcela, young and with big desire to set up a local
dynamic and original, decided to detect and renew them. She
refurbishes part of the local, sells typical dishes and sets up a sort of
outdoor area. Despite her young age, her great determination convinces
PerMicro, who decides to grant the requested micro-credit. Marcela
now works in his food shop, helped by her boyfriend and her shop is the
only one selling South American dishes in the area.
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32. CONTACTS
PerMicro
Corso Massimo D'Azeglio 74
011 658778
www.permicro.it
Thanks for your attention!