110 October 2006

The Social Microcredit Project

of Compagnia di San Paolo

Antonella Ricci

Brussels, 10 October 2006

210 October 2006

A virtuous three-sided partnership

FOUNDATION (Compagnia di San Paolo)

- financing the Guarantee Fund (GF) and the project

- promoting, coordinating and monitoring

NON-PROFIT ORGANIZATIONS (NGOs)Don Mario Operti Foundation in Turin, Santa Maria del Soccorso Foundation in Genoa, Risorsa Donna Foundation in Rome and San Giuseppe Moscati Foundation in Naples

- assembling information and evaluating applications

- mentoring successful applicants

BANKS (Sanpaolo IMI and Sanpaolo Banco di Napoli)

- checking credit worthiness

- carrying out the final procedure (granting of the credit)

310 October 2006

The intervention path

BANK

APPLICANT NGO

1. Application for the loan

3. Presentation of the selected application

4. Granting of the loan through current account used for all financial dealings

Mentoring

2. Info gathering and evaluation

410 October 2006

The loan

Type: Fixed interest loan granted

through current accounts

Minimum sum: € 2,000 to develop a business;

€ 1,000 to promoteemployability

Maximum sum: € 20,000 to individuals;

€ 35,000 to companies

Length of loan: 18-60 months

Repayments: Fixed sum monthlyinstalments

510 October 2006

Compagnia di San Paolo has granted € 400,000 to each of the four NGOs (total amount € 1,600,000)

The grants have been used as a Guarantee Fund for the loans

The guarantee fund can be used in the case of default or insolvency

It’s a rolling fund: repayments release an equivalent sum of the fund to be used for other loans

From February 2005 the Banks apply a ratio “1 to 2” between the guarantee fund and the overall loans

The Guarantee Fund

610 October 2006

The crucial role of the NGOs

NGOs role:

• they are closed to the need

• they are skilled for evaluating the loan applications

• they are skilled for mentoring the project

MUTUAL TRUST

710 October 2006

Data about the loansData from October 2003 (beginning of the project) to March 31st, 2006

Applications received 719

of which:

Applications approved 152

Applications rejected 142

Applications withdrawn 312

Applications still undecided 113

Issued loans (among the approved)

141

Amount of loans € 1,693,600

810 October 2006

Some examples of funded activities

Business and trading (selling furniture, African craft, clothing)

Services (crèche, dry-cleaners, telephone centre, Internet point)

Restaurant, Bar

Driving licence to accompany elderly or disabled people

Art gallery

Tattoo shop

Tailoring workshop

910 October 2006

The project has generated a wealth of ideas and novelties

Training courses for successful applicants

Attempt to involve successful applicants by asking them to contribute with a small amount towards the overall cost of the project

Possibility to pay out the loans in instalments to monitor the correct use of the funds

1010 October 2006

The logo of the Project