FINANCIAL EXCLUSION IN

ITALY Firtuna G. Adugna

Trang Do Francesco Sansoni

SUMMARY

Introduction

1. Level and structure of financial exclusion

2. Causes and consequences of financial exclusion

3. Government role in preventing financial exclusion

4. Institutions and their actions

5. Other activities against financial exclusion

6. Characteristic and name of PlaNet Finance

Conclusion

DEFINITION

Financial Exclusion is a process whereby people encounter

difficulties accessing and/or using financial services and

products in the mainstream market that are appropriate to

their needs and enable them to lead a normal social life in

the society in which they belong. (EU)

1. Levels and structure of financial exclusion

There are 3 levels of financial exclusion:

Levels of financial exclusion

Levels of transaction banking exclusion,

Levels of credit exclusion.

Levels of financial exclusion

Levels of Financial Exclusion in individual EU 25 countries.

Source: Eurobarometer 60.2 and 2003.5 Base: All adults aged 18 or over

Levels of financial exclusion

Levels of transaction banking exclusion:

Source: Eurobarometer 60.2

Levels of financial exclusion

Levels of credit exclusion

A large proportion of people on low incomes did not have any

revolving credit facilities (overdraft, credit card or loan)

Source: Eurobarometer 60.2 and 2003.5

No revolving credit Have a loan No savings

Financially excluded

56 13 50 16

Structure of financial exclusion

Financial inclusion by place of living

People in urban areas were to be excluded more than ones in rural areas

Source: Demirguc-Kunt and Klapper, 2012

Structure of financial exclusion Financial inclusion by ageYoung people (aged 15-24) and adults aged 65 and over were most likely to be financially excluded.

Source: Demirguc-Kunt and Klapper, 2012

Structure of financial exclusion Financial inclusion by gender

Female were to be excluded more than male from all

forms of financial services.

Source: Demirguc-Kunt and Klapper, 2012

Structure of financial exclusion Financial inclusion by education

The less well-educated people the more likely they were to be excluded from all forms of financial services

Source: Demirguc-Kunt and Klapper, 2012

2. Causes and consequences

Causes

Societal factors: Technological gap: The ageing population, the unemployed

and immigrants have difficulty in staying up-to-date with all new ways of dealing with money.

Supply factors: complexity of choice because of too many products. Unclear marketing and service delivery method.

Causes and consequences

Causes In Italy, financially excluded people do not have a bank

account or a post account.

High costs of banking services: Duties and taxes on banking services are a heavy burden for people on low incomes.

( average costs of 150 euro/yr. plus 34,20 euro as taxes)

Causes and consequences

Consequences. Financial & Social consequences

Banking: Negative economic consequences of dealing occasionally with banks.

Credit: Those who are “credit excluded” also face negative

consequences.

Savings : No means of coping with small financial shocks

3. Government role in preventing financial

exclusion The short term loan - The FondoCentrale di Garanzia

The “Avvisocomune” (2009): An agreement between the Ministry of Economy and Finances, the Italian bank association (ABI) and the association of the representatives of PMEs

In 2009 the “Piano famiglie” : A postponement of family loans to 12 months for low-income families.

4. Other activities against financial exclusion

Develop new products and services for people who are financially excluded.

Work in partnership with not-for-profit organizations to reduce costs and barriers to access.

Promote financial education to encourage the use of financial services

5. Institutions and their actions

Banca Etica and other “ethical banks” : Financing small business and help social development.

Banca di Credito Cooperativo (Roma) and other banks: Helping imprisoned people & their families.

Interesse Uomo anti-usury foundation: Fighting Usury.

A.S.C.A: Agenzia Sociale per la Casa: Helping people to find a house.

6.

Main Activities:

Gives expert advice for micro finances promoting financial inclusion.

Organizes conferences on the many aspects of microfinance.

Works with immigrants, helping them in improving their social and economic condition.

Conclusions

Microfinance providers need to grow.

The linkage banking model should be further strengthened through joint programmes and reinforced cooperation between banks and NGOs.

EU better to constantly included The fight against financial exclusion in the National Strategic and in its framework.

GRAZIE!