Italy And Italy: The Importance Of Microfinance In Italy

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3.2 MICROFINANCE IN ITALY
Despite a favourable economic environments and well-developed banking sector, microfinance is expanded significantly in Italy. Gradually, banks and public bodies are taking initiatives to start the microfinance services at the national and local level. But the progress in the microfinance sector in Italy is considered still limited even if its current economic situation requires a greater development in this area. The importance of microfinance in a country like Italy can be judged by analysing macroeconomic data: 69 percent population live in the urban area (World Bank, 2014), 28.3 percent of the people are at risk of poverty or social exclusion (Istat, 2014), 94.9 percent are microenterprises (Eurostat, 2012) and the rate of unemployment is 11.9 percent (Istat, 2016).

However, microfinance activities is entered into the Italian credit market over the years of 1960s. At the beginning, a non-profit mutual guarantee organization called “Confidi” was …show more content…

Principally, there are 3 types of non-banking models in Italy that provide microloans to the low-income people:

I. Cooperatives or consortiums – these types of organizations generally collect money from their members and takes responsibility to manage and invest this money. In addition, cooperatives or consortiums serve as a guarantor for microloans supplied by the banks or other financial institutions.
II. Cassa Peote or small financial cooperatives – these micro-lenders usually provide very small loans to the needy people. They can offer only limited financial services, which are commonly fixed and monitored by Council of Credit Supervision.
III. Microfinance institutions and NGOs – there exist several microfinance institutions and NGOs in Italy such as Fondazione Risorsa Donna, PerMicro, Microbo, which are playing key social role in developing the economic condition of the needy

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