VENICE MICROFINANCE INITIATIVE

VENICE MICROFINANCE INITIATIVE

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Table of Contents

1. Invenicement Ca’ Foscari .................................................................................. 3 2. VMI: Inspiration and Purpose .......................................................................... 6 3. What Now, What Then ...................................................................................... 8 4. The Things We Do: VMI’s Core Services ...................................................... 10 5. Major Organisations and MFIs........................................................................ 11 6. What We are Looking For ............................................................................... 18

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1. Invenicement Ca’ Foscari Invenicement is a student-managed Finance&Business Club at Ca’ Foscari University of Venice. Our mission is to allow students to develop a certain interest and a broader and more in-depth knowledge of everything there is around the world of finance and business. We pursue our mission by connecting our members with companies and professional through events, activities and workshops. The club was founded in 2013 by driven Ca’ Foscari students who wanted to share their passion for Finance with their colleagues. In order to do it, they promoted events, made partners with societies and companies, and involved students.

Since then, we have grown.

9 EXECUTIVES | 400+ MEMBERS | 1600+ FOLLOWERS 3

Our conferences had been successful, but we wanted to outstand. After the first Invenicement workshop, we realised how interaction was the best way to involve students in our events. In fact, during this academic year, we are going beyond meetings and conferences, even though they still represent the bread and butter of our society. Since September 2015, we are sharing financial news through our Facebook page, organising workshops and developing innovative activities.

What we have accomplished so far this year Workshop: Excel for Finance  30 selected students, 4 lessons.  Held by one of the greatest Italian experts in options, Dr. Domenico Dall’Olio.  Topics include VBA, Valuation, Computational Finance.

Since the success of WEFF, students have been asking us to propose it again during the second semester, and that’s what we’ll do. Invenicement is now developing a new, more in-depth workshop, consisting in more lessons and more interaction.

Introduction to: GMAT|LBS To enhance last year’s similar successful event, we added the participation of one of the best business schools in the world, to offer them a chance to get to know us. We were pleased to notice that our fellow students were very intrigued about LBS and curious about GMAT. We are confident that the outcome, for both colleagues and guests, was unique.

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Conference: Public Debt Explanation and consequences of banking and monetary policies affecting the debt of the single countries.

As our major first semester conference, we felt like treating one of the most important issues regarding our country and the EU.

Students had the pleasure to hear from and interact with some of the major experts and researchers in the field, coming from a variety of backgrounds:  Prof. P. Biffis, former Professor at Ca’ Foscari and pioneer in Debt research.  Dr. M. D’Onofrio, Head of Investments at Unicredit, one of Europe’s leading banks.  Dr. S. Torielli, founder of AdviseOnly, one of the most innovative FinTech startups in Italy.

Ultimately, we made partners with major companies and institutions, and we are working with them on new activities. Some of them include:

A major conference day,

Our new Excel

A conference regarding

volunteering initiatives,

with renowned guests

workshop, with the

ECB’s banking

impacting MFIs and

from Italy and abroad.

addition of a meeting on

supervision policy.

unprivileged

investment tools.

communities.

Who we have accomplished it with Our major investment is in our people. Thanks to constant fresh additions in our committees, represented by the most driven Ca’ Foscari students, Invenicement has been growing until now and will keep growing in the future.

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2. VMI: Inspiration and Purpose Invenicement sought the chance to develop an own volunteering project since the beginning of the academic year, when executives asked members what they would like more during their experience with the club. Our fellow students expressed the will to be involved in something of real impact. The good thing was that we already had that in mind. Venice Microfinance Initiative was inspired by successful activities carried out by Melbourne Microfinance Initiative, a student-run society based at The University of Melbourne, Australia. Hereby, a brief history of MMI.

Melbourne Microfinance Initiative The Melbourne Microfinance Initiative (MMI) is a student-run organisation at the University of Melbourne, Australia. MMI provides pro-bono consulting services to Microfinance Institutions (MFIs) globally with a vision of having a direct impact on communities in need, and hosts an array of events designed to engage and empower students to make a difference. Founded in 2010, MMI is the first and largest microfinance student organisation established at an Australian university.

Initiatives

Services

By providing pro-bono consulting services to underserved Microfinance Institutions (MFIs), MMI aims to solve their organisational challenges and have a tangible impact on improving the lives of underprivileged communities.

MMI hosts a number of events across the academic year, such as conferences, workshops and competitions, in order to create opportunities for students to develop awareness around social impact and grow their analytical skill-set.

http://melbournemicrofinance.com/initiatives/

http://melbournemicrofinance.com/events/

About VMI: MMI is committed to growing our ability to assist MFIs and connect with students nationally and internationally. We are excited by the development of the Venice Microfinance Initiative and look forward to future collaboration.

During the last few years, they have been operating in South East Asia and in the Pacific Region. Their wide success and their efforts, along with the collaboration of their president, were essential for the inspiration and the development of our own project, Venice Microfinance Initiative. VMI has 3 key purposes. We aim to impact societies, offer learning opportunities and make connections. 6

Bolstering up communities

receive critical services, including saving accounts, small loans and professional advisory.

VMI’s ambition is to create a positive impact within the local community, by providing financial and professional support to low income, non-bankable individuals, as well as to struggling enterprises, thus lifting them out of poverty and social exclusion. The action is intended to help communities grow by encouraging entrepreneurship, increasing financial inclusion and empowering women. Families and micro enterprises are supported by local microfinance institutions – socially active entities – and able to

Learning differently VMI gives ambitious students the opportunity to get socially involved and benefit from a unique professional experience. Delegates participating in the Venice Microfinance Initative will have the chance to deepen their knowledge about microfinance and the way MFIs

and strenghten local communities.

In the second stage of the project,

In the first stage of the project, the

delegates have the chance to learn

members of the two delegations of

on

students admitted to participate to

consultants for host MFIs located

the VMI are selected.

both in Italy and abroad.

Before going on the field, students

VMI, therefore, represents not only a

receive preliminary training from

powerful learning opportunity for

partner microfinance institutions

students but also unique occasion to

and become acquainted with the

get actively involved into real world

markets where host organizations

issues and take action against

operate.

poverty and social injustice.

the

job,

by

working

as

contribute to foster economic growth

Building bridges

partner institutions the possibility to access a pool of talents and to inspire young people through their constant effort to support social and economic development and

VMI has been thought to be a link between students and microfinance practitioners operating both locally and internationally. The aim is to create a network that will continue to operate in the future, bringing together the freshness and willingness to learn of Ca’ Foscari’s students with the expertise of VMI’s partner institutions. Knowledge transfer being at the heart of this initiative, we hope to establish long- lasting connections that will provide

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increase equality by encouraging financial inclusion .

3. What Now, What Then

We understand how important it is to have a clear plan in mind, so that it is simpler to look forward and to make use of what we are building.

PLANNING Jan

Feb

RESEARCH

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

ACTION

Planning Until now, the VMI Team has gathered insights and information, from collaborators and through research. After some meetings, we were able to create a timeline that will allow us to pursue our project in the best way possible. Moreover, the following timeline can be easily applied to form more delegations of consultants, later on. Hereby is what we have come to decide. Invenicement will select candidates with an announcement lasting from the 11th of April to the 12th of June, followed by interviews. We will pick and contact target MFIs (that is, where we can operate) before April, while we expect to obtain their consent before May. Each delegation (one or two at first) will include 6 students, who will operate between July and November (5 months in total). The delegation will receive insights from our partner organisation/s and decide the area of operation inside the target MFI.

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Research Our team is looking for organisations and MFIs* to collaborate with, both in Italy and abroad. Through that, we aim to:

1. Give our delegation of VMI

2. Ensure that our project is of real

consultants the best tools to

impact,

targeting

the

most

operate, so that their work can

suitable MFIs in the proper

be the most effective.

countries. * More information on our findings is available at Chapter 4.

Action The five months collaboration between our delegation and the MFI will comprehend Skype meetings made at least once every fortnight, and it will also include:

The introductory Skype meeting, which aims to give the students and the MFI operatives the first chance to meet and to set the basis for the collaboration project. During this meeting, both parties will evaluate and discuss the issues previously brought up by our team, and consider possible solutions.

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A mid-term field journey, which consists in a one-week field trip made by our consultants to wherever the MFI is based. During this visit, VMI will have the chance to meet the institution operatives in person, to submit surveys and questions and to give performance assessments.

VMI’s final Skype meeting, where our students will evaluate the implementation of the project, give the proper final recommendations and analyse future benefits. During the meeting, VMI will also assess the impact of the initiative and question the improvement of the project.

4. The Things We Do: VMI’s Core Services Risk and Sustainability Management Proper strategic and credit risk management are vital to any MFI. A correct internal administration as well as suitable loan policies can turn a microfinance institution from good to excellent, and ensure sustainable impact and growth. VMI aims to foster healthy but solid policies, estimate growth risks and benefits, implement sustainability measures into the MFI, and help evaluating new potential markets. We grant CRM analysis through benchmarking, profit assessments and historical reviews, in order to provide sustainable recommendations and to assess expansion opportunities.

Social Engagement Activities Microfinance can dramatically change the lives of the unprivileged. It is a powerful tool to fight poverty and increase social inclusion. Small loans and access to banking services alone, though, are not sufficient to accomplish these goals. VMI’s social engagement package is intended to help MFIs and their clients by developing and organising activities, so as to involve local communities and institutions, and assess the effectiveness of our project. We support MFIs by planning and pursuing both traditional and alternative on-field initiatives, such as entrepreneurship and financial education workshops, collaboration hunting and impact assessment surveys.

Remote Opportunity Desk MFIs and micro businesses can benefit from substantial financing under the EU budget due to their social aims. Often however, it is hard to navigate through all the information related to financial support offered by institutional funds, and sometimes opportunities can be lost. Moreover, it is generally quite tough, for SMEs and MFIs, to operate in a market with too many financial regulations. We believe that these factors can be crucial for the life and growth of all microfinance institutions. We assist from afar, seeking for funding channels aimed at people and MFIs, offering our growing institutional network and helping to anticipate and evaluate potential obstacles.

Comprehensive Digitalisation Process The digital revolution carried out new opportunities to achieve an effective brand recognition and tighten information barriers, thanks to websites and others useful tools adopted as new methods in approaching clients and the society. We aim to support growth by developing an extensive digitalisation procedure, uniquely thought in respect to the MFI necessity and expansion margin. We provide e-marketing insights and make transparency the most powerful factor in developing a business plan and making clients aware of the advantages microfinance brings.

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5. Major Organisations and MFIs

The research activity carried out by the team in preparation of the first edition of the Venice Microfinance Initiative concerns three different environments and types of institutions, and is thus divided in three sections, hereby explained.

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The first part of our research contains a synthetic overview of the major organisations and programmes affecting the microfinance sector at an international level. Those programmes and institutions have been taken into account for further relationship building, as their expertise can be crucial to the success of VMI.

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The second part of findings has the objective to present the current situation of the microfinance sector in Italy, with a focus on microcredit, especially with regard to the region of Veneto. Research on this topic is fundamental to establish partnerships with local MFIs and develop our national activity.

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Finally, the last part of our research is aimed at presenting information concerning markets of interests. Up to now, evaluation of the state of the microfinance sector have been carried out in East Europe and North Africa, as we think that, given the absolute novelty of this initiative, it would be easier to start our international activity in neighbouring regions, before expanding to broader areas.

Organisations and Programmes Impacting Microfinance

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EMN is a network of practitioners, partners and corporate members, all of whom are organizations involved in European microfinance issues. EMN activities are first focused on building stronger relations with EU institutions and addressing policy makers, regulators and funders of the sector in order to lobby for favorable policies for the development of the sector. Then, they are focused on capacity building, by encouraging sustainability, good governance, quality, research and transparency of MFIs to increase the impact of microfinance in Europe.

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The Microfinance Centre is a regional microfinance resource center and network. Its mission is to contribute to poverty reduction and the development of human potential by promoting a socially oriented microfinance sector. MFC is based in Warsaw and brings together 105 organizations in 32 countries, serving approximately 1 million lowincome clients. Its main programs are divided in four general areas: Social Performance Management, Financial Education, Research and Energy Efficiency.

EMN is a network of practitioners, partners and corporate members, all of whom are organizations involved in European microfinance issues. EMN activities are mainly focused on the one hand on building stronger relations with EU institutions and addressing policy makers regulators and funders of the sector in order to lobby for favorable policies for the io development of the sector. On the other hand, they are focused on capacity building, by encouraging sustainability, good governance, quality, research and transparency of MFIs to increase the impact of microfinance in Europe.

MicroFinanza Rating is a private and independent international rating agency specialized in microfinance. It was founded in 2000 with the aim of providing the microfinance industry with independent, high quality ratings and information services, in order to enhance transparency, facilitate investments and promote best practices. Besides Microfinance Institutional Rating (MIR), MFR also performs country screenings, governance evaluation, loan portfolio audit, equity evaluation, and offers training to a diverse range of microfinance practitioners.

JASMINE (Joint Action to Support Microfinance Institutions) was an EU program managed by the European Investment Fund in the period 20072013 to help MFIs to scale up their operations and maximize their on microenterprises development and unemployment reduction. Given the positive impact of JASMINE on the sector and its complementarity with existing and forthcoming EU microfinance programs such as financial instruments under the European Progress Microfinance Facility and the EU Program for Employment and Social Innovation (EaSI), JASMINE has been extended in the framework of the 2014-2020 programming period.

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The Italian Way to Microfinance

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In Italy, Institutional activities regarding microcredit date back to 2005, when the "Italian Permanent National Committee for Microcredit" was born in response to the General Assembly of the United Nations, which declared 2005 the "international Year of Microfinance" . Since then, the United Nations asked each Member State to set up a national committee dedicated to the dissemination and promotion of microfinance to achieve the so called Millennium Development Goals. The 2005 Committee was given the objective to define and promote an "Italian Way to microcredit".

Microfinance is a broad category of services, which includes microcredit. Microcredit represents the provision of credit services to some of the most impoverished clients. The “Ente Nazionale per il Microcredito” provides information about MFIs, both nationally and regionally, displaying socially oriented activities and the ones towards entrepreneurship. MAJOR MFIs • PerMicro: a multi-regional MFI That provides credit both to small businesses and poor households

MACROECONOMIC DATA ITALY POPULATION UNEMPLOYMENT RATE YOUTH UNEMP. RATE INDEX OF ENGLISH KNOWLEDGE POVERTY RATE

• Progetto Policoro: a nationwide Project born in 1995, carried out by the Conferenza Episcopale Italiana. It coordinates 19 regional MFIs and aims to fight the youth unemployment • Il Prestito della Speranza: another microcredit project supported by the Conferenza Episcopale Italiana whose aim is to enhance final inclusion.

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11,4% 37,90% 54% 10,3%

VENETO POPULATION UNEMPLOYMENT RATE YOUTH UNEMP. RATE INDEX OF ENGLISH KNOWLEDGE POVERTY RATE

Many MFIs are sponsored by either banks or religious institutions, which carry out their scope. We found that the majority of the efforts in microfinance are oriented towards households and individuals.

62.301.489

4.925.000 7% 23,520% 55,56% 4,9%

Focusing on Veneto, we found that the trend of MFIs being of financial support for weak subjects like poor families and immigrants is stronger.

MFIs in Eastern Europe and Northern Africa

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Poland Macro overview  Total population1: 38,562,189  Real GDP growth rate: 3.5%  GDP per capita: 26,400 $  Unemployment rate: 10.6%  Level of English language knowledge2: 62,25 EF EPI 2015  Population below the national poverty line: 17.1%  Banks: HSBC, Deutsche Bank, Intesa San Paolo, ING, Bank Pekao (UniCredit Group)

MFIs  Fundusz Mikro: established in ‘94, it is the most recent microcredit provider in Poland. Moreover, it is now evolving to the status of microfinance bank.  Rural Development Foundation: established in ’99, as a result of the merger of two organizations. Focused on adult and youth education, SME & infrastructure development. In partnership with EMN, TWB and MFC.  Inicjatywa Mikro: established in ’96, aims at developing core activities for micro and SME enterprises. It has been financed by Jeremie EU fund.

Deductions No specific legal framework exists in Poland today. The legislation, which does not apply exactly to this activity, makes the creation of an MFI relatively easy. The presence of MFC is particularly relevant.

Slovakia Macro overview  Total population: 5,445,027  Real GDP growth rate: 3.2%  GDP per capita: 29,500 $  Unemployment rate: 10.9%  Level of English language knowledge: 56.34 EF EPI 2015  Population below the national poverty line: 20.5%  Banks: OTP Bank

MFIs  HFH3: established in 2004. It started with providing small home-improvement loans, to later expand its focus in several other towns and villages. It provides small income families with financial education.  Integra Foundation: established in ’95. It invests in education and practical training for a job; it helps develop independent, viable projects both in Slovakia and Africa.

Deductions4 Economic development mostly concentrates in the East side of the country. Microfinance Program extended its activity in few other countries, among which Slovakia, in order to strengthen microloans disburse power.

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CIA

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Countries ranked on the 70-country EPI ranking for 2015

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http://www.habitat.org/where-we-build/slovakia https://www.employment.gov.sk/files/slovensky/ministerstvo/analyticke-centrum/english-version_kvalita-tlac.pdf

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Romania Macro overview  Total population: 21,666,350  Real GDP growth rate: 3.4%  GDP per capita: 20,600 $  Unemployment rate: 6.3%  Level of English language knowledge: 59.69 EP EFI 2015  Population below the national poverty line5: 22.6%  Banks: Transilvania Bank, Unicredit Bank, Banca Commerciala Romana, Raiffeisen Bank

MFIs  FAER IFN: established in ’92. It provides non-financial services to small-scale farmers and rural populations.  OMRO: established in 2000.  Express Finance: focused on the distribution of loans to micro entrepreneurs.  Lam: established in 1993. The organization can be defined as a credit performer in rural areas, the most representative customer segment being family farming and SMEs.  Rocredit: established in 2007. Its clients work mostly in production (38%), services (32%), trade (16%) and agriculture (8%). 74% of the clients work in urban areas, whereas 26% work in the country side. The MFI’s niche is working with MSMEs that are not targeted by commercial banks due to the smaller average loan size demanded by the businesses.

Deductions Romania MF sector is the 5th in the European Union in terms of the value of loans disbursed in 2013. The Romanian microfinance sector grew during the RMCF implementation period, becoming the fifth most active in the EU. However, the Romanian microfinance sector is seriously constrained by the lack of lending funds. Despite insufficient lending funds, new MFIs were registered and existing ones expanded their portfolios and outreach. Projects like Jasmine have supported Romania with consistent funds.

Tunisia Macro overview  Total population: 11,037,225  Real GDP growth rate: 1%  GDP per capita: 11,600 $  Unemployment rate: 15.4%  Level of English language knowledge: ?  Population below the national poverty line: 15.5%  Banks: Banque Tunisienne de Solidarieté, Banque Nationale Agricole, Banque de l’Habitat, Arab Tunisian Bank

MFIs  ENDA inter-arabe: as an NGO it is free from any interest rate constraints. It boasts over 160,000 active borrowers and 65 branches in Tunisia.  MICROCRED: started operating in 2013. Furthermore, it offers a specific program for young entrepreneurs aged 18-35 years, the IRADA program, providing training, coaching and support as a complement to a possible loan.  Advans Tunisie: established in 2005. It targets borrowers across all sectors of the economy: retailers and wholesalers, artisans, small industries, services and small-scale farmers, offering them a wide range of services to enable them to develop and expand their commercial activities.  Taysir microfinance: established in 2014. The operation backs the development of the local financial sector for the onlending to micro-projects, and bolster support for the private sector and the development of microenterprises.

Deductions The country’s lack of accurate data on financial exclusion led in the past to underestimate needs and implement a relatively restrictive framework. Secondary data sources have revealed there are 2.5-3 million potential clients for microfinance services, including 1.2 to 1.4 million for microcredit.

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Overview Sept. 2014

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Bulgaria Macro overview MFIs  Total population: 7,186,893  Mikrofond AD: It accumulates social and  Real GDP growth rate: 1.7% community capital to fund micro enterpreneurs and  GDP per capita: 18,400 $ sustainable projects.  Unemployment rate: 10.2%  Ustoi JSC: It targets the smallest economically viable  Level of English language knowledge6: companies, providing them with accessible financial 25% services. It supports female micro entrepreneurs on a  Population below the national poverty regional basis. line: 21%  JOBS MI: It provides microcredit to sole traders, job  Banks: ProCredit Bank EAD, UniCredit seekers, unemployed people and disadvantaged Bulbank EAD, Raiffeisen Bank, Allianz groups in the labour market. Bank Bulgaria AD, First Investment Bank AD, Societe Generale Expressbank AD Deductions There is no special law concerning microcredit, so that regulations governing it are related to credit institutions and loans. At the moment MFIs are struggling to maintain their social and inclusive mission, targeting vulnerable groups and those who are financially excluded. MI need technical assistance to maintain portfolio quality, sustainability of operations and expansion of outreach.

Albania Macro overview  Total population: 7,186,893  Real GDP growth rate: 1.7%  GDP per capita: 18,400 $  Unemployment rate: 10.2%  Level of English language knowledge: more than 65% (2006)  Population below the national poverty line: 21%  Banks: Intesa San Paolo Bank, Tirana Bank, RaiffeisenBank, National Commercial Bank.

MFIs  Besa Foundation: established in ’99. Besa Fund has developed a “Youth Loan”, which subsidizes the interest on loans for young people desirous of starting businesses, mainly in Tirana.  NOA: existing in Albania since 2010. It represents an innovative way to responsible finance, for microfinance is used to leverage the knowledge of acquiring and operating financial institutions in emerging markets.  FAF-DC: mainly provides loans to profitable and stable private enterprises that have had positive impact on the development of the area by creating new jobs and markets  Micro lending program of World Vision: established in 2001. All kinds of activities are financed, including loans to farmers to purchase equipment, cattle and livestock.  ASC Union: established in 2002. It promotes productive activities in rural areas by financially and technically supporting Savings & Credit Associations.

Deductions Albania has the lowest financial leverage, so MFIs represent a good source of financing for microenterprises and SMEs, because they cover rural and semi-urban areas where the banking system is absent. MFIs play a decisive role in this country for the clients served are included in rural, semi-rural and urban areas. This is why Albania needs to improve the financial instruments to support microenterprises.

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Eurobarometer report 2012 and 2011 Census

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More Possibilities Our research continues through the Eastern European and Northern African areas. We are analysing country by country and seeking for more markets, which fit our requirement in being both economically and politically suitable to help us achieve our goals. First, we want to provide our delegation with the best environment to experience the VMI project. Then, we want to make sure that our efforts are of real impact in the place we choose to work.

Our research continues through.. Eastern Europe Croatia Greece Serbia Slovenia

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Northern Africa Morocco Egypt

Western Asia Armenia Azerbaijan Georgia

6. What We are Looking For

Our initiative is essentially not-for-profit and aims to help MFIs and disadvantaged people and enterprises. However, in order to ensure the best outcome, it is essential that our consultants meet the MFI operatives and spends some days in the field. We seek for a sponsor that can help us with funding VMI consultants’ travel and staying expenses of the mid-term field journey. In return, we offer the sponsor maximum visibility in the project

Our consultants are selected amongst the best students of the university and are passionate about social impact. Invenicement will provide them the best tools to operate in a comfortable yet effective way. Moreover, we will make sure that they can have all the information they need to work at their best. Nonetheless, we believe that better insights regarding how to operate and which area to affect can come from more experienced organisations.

Through our research, we are mapping the most attractive markets, the largest organisations and the main MFIs. By doing that, we realised that the institutions that could be seeking for more assistance might not be in plain sight. We are confident that a national or international organisation working with microfinance has more knowledge of the “market needs” that we are looking to fulfil with our services.

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Invenicement Ca’ Foscari Finance&Business Club Cannaregio 873 Venice 30121 (VE), Italy www.invenicement.com

Contacts [email protected] www.facebook.com/invenicement.cafoscari www.linkedin.com/in/invenicement-ca-foscari-51753470 www.twitter.com/invenicement

Acknowledgement The following people are acknowledged responsible for the development project of Venice Microfinance Initiative and for the production of this document: Mirko Cauci, Sarah Di Gloria, Enrico Piga, Sonia Pusun, Matteo Spiller, Matteo Tirapelle and Federico Traetta. For any inquiries, please make use of the contacts mentioned above.

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