10. Financial Instruments: SelfieEmployment Malta, June 14th 2017

ITALY SELFIEmployment a revolving Fund for youth self-employment

Table of Contents Summary Strategic context Ex-ante assessment Design and set-up Lesson learned, feedback and recommendations State of implementation on May 24

Promoting employment and supporting labour mobility Summary Thematic Objective 8 Key characteristics: All regions in Italy (20 regions) ESF OP, Thematic Objective 8 Fund Manager: Invitalia (Italy) Microloans, Extended microloans, Small loans Final beneficiaries: NEETs (young people Not in Employment, Education or Training) The age range is 18-29 years old Financed through: YEI NOP, SPAO NOP, open to regional contribution Total amount: EUR 103m (EUR 53m YEI NOP and EUR 50m SPAO NOP) Promoting employment and supporting labour mobility

Strategic context Background Regional ESF OPs Abruzzo Piemonte Basilicata Puglia Calabria Sardegna Campania Sicilia Emilia-Romagna Toscana Friuli Venezia-Giulia Trentino Alto Adige (Province of Trento and Province of Bolzano) Lazio Liguria Umbria Lombardia Val D’Aosta Marche Veneto Molise Unemployment: 2015: EU 9,4%, Italy 11,9% 2017 (feb): EU 8%, Italy 11,5% Youth unemployment: 2015: EU 19,6%, Italy 40,3% 2017 (feb): EU 17,3%, Italy 35,2% NEET 2015: EU 21,7%, Italy 35,2% 2017 (feb): EU 21,5, Italy 32,9% revised

Ex-ante assessment Overview. Feedback on learning from process, no description of the content of the study

The ex-ante assessment showed that: Market failure and unmet demand The ex-ante assessment showed that: a market failure exists in quantitative terms 86.436 NEET registered to YG aged 19-29 and proxied by self-employment propensity No measures specifically addressing NEET Risk of cannibalization and crowding-out effect for NEET due to excessive fragmentation of resources Need to address the demand with tailored and specific measures for promoting NEET self-employment initiatives A FI fills a market gap without negatively affecting competition The measure is complementary to existing financial instruments and training measures, not only within the YG scheme Whole number of NEET able to be targeted only via a revolving mechanism A FI at national level ensures a greater critical mass compared to its implementation at regional level Overview. Feedback on learning from process, no description of the content of the study

Market assessment – Market failure, suboptimal investment • 43% unemployment for under 25s (2014) • NEETs: 26% of under 25s, 31% of under 29s • NEETs cost EUR 32.6 bn, 2% of Italian GDP (2011) • 16% of employed under 25 are self-employed (vs. EU 2.6%) Financial instrument may fill the financing gap Ex-ante assessment highlights lack of instruments for NEETs and estimates gap between supply and demand Ex-ante assessment confirmed the financial instrument would not compete with public sector initiatives or “crowd out” private sector finance Identification of market problems Analysis gap between supply and demand Quantification - methods and instruments used for collecting and analysis of the information, stakeholders consulted Notes: NEET in Italy is second highest in Europe, after Greece

Market assessment – Lessons learned Success factors and challenges Self-employment and self-entrepreneurship measures are crucial to create new enterprises No collateral required means easier access to finance Revolving funds have longer duration Combining financial and non-financial services is crucial Stronger requirements for applicants helps select proposals Overview past experience similar instruments Main success factors / pitfalls of those past experiences Using collected information to enhance performance envisaged FI

Design and set-up Overview. Feedback on learning from process, no description of the content of the study

TIMELINE Begin of ex-ante assessment Completion of ex-ante assessment Launch of the 1st call to final recipients First disbursement to final recipients July 2015 End of 2023 September 2016 a a a a a a a a May 2015 December 2015 March 2016 October 2016 revised MoU between MA and Invitalia Amendments to selection criteria Funding agreement End of eligibility

National Microcredit Institute Stakeholders Managing Authority Fund Manager Chambers of Commerce 11 Italian Regions YEI + 20 Regions SPAO Revised – to be further explained? Different stakeholders involved (other ministries, financial intermediaries, project promotors, sector associations,…) Engagement and commitment to work with FIs National Microcredit Institute

Implementation structure Key advantages In-house agency meant fast implementation Invitalia already manages national incentives for new enterprises and start-ups Who is the financial intermediary? An Italian Government in-house body with: national territorial coverage (also through the Chambers of Commerce) significant experience with microfinance provides tutoring for 24 months (financed through NOP SPAO) for final recipients during start-up has an on-line platform for similar financial instruments Invitalia is responsible for: Design and implementation of the managing platform Application evaluation Providing loans Coordination and control Management of loans Tutoring Argumentation, link with SWOT, as appropriate

Schematic overview Managing Authority: ANPAL YEI NOP SPAO NOP Fund manager: Invitalia Managing Authority: ANPAL YEI NOP EUR 53 million SPAO NOP EUR 50 million SELFIEmployment financial instrument Ente Nazionale per il Microcredito Unioncamere and Regions Final recipient: Businesses run by NEETs € € Non financial services Business Development Services

Non-financial services: Schematic overview Non-financial services: Ente Nazionale Microcredit provides support with the proposal and technical aspects of the application Business development services: Invitalia provides tutoring service during the initial months 7.1 business skills training nationa level (Unioncamere) 7.1 business skills training regional level Actions to be supported

Max reimbursement period Financial products provided The Investment Strategy follows directly from the results of the market analysis and lessons learnt 1 Microfinance within € 25 000 no guarantees required 2 Extended Microfinance between € 25 000 and € 35 000 no guarantees required Small loans between € 35 000 and € 50 000: 1° Tranche: Max 50% of the eligible expenditure 2° Tranche: Residual part of the eligible expenditure, at the completion of the expenditure plan 3 Actions to be supported Max reimbursement period 7 years

Amendments to selection criteria 7.1 Strengthening entrepreneurial skills (business skills training) regional level 7.1 Strengthening entrepreneurial skills National level «Crescere Imprenditori» managed by Unioncamere NEET autonomus without participating in 7.1 National / Regional SELFIEmployment Fund ANPAL and INVITALIA 9 points reward Through the project "National Microcredit Support Facility for the enhancement of access to the SELFIEmployment Fund", 60 branches have been activated to support the compilation of funding applications

Iter and Timing

State aid (final recipients) Eligible initiatives: NEET Must have the age of 18 Individual companies, professional associations or companies constituted for no more than 12 months from the date of submission of the application provided that they are inactive; Individual companies or companies not yet constituted, provided that they are constituted within 60 days of any admission procedure. State aid (final recipients) Under de minimis thresholds (Reg. 1407/2013) Eligible sectors: Tourism & HoReCa Health care and social ICT Manufacturing Renewable energies and energy efficiency Service industry

Monitoring, control and reporting system in place for FIs (MA) Monitoring Committee Managing Authority i Invitalia Final recipients Monitoring is crucial to track the performance of the financial instrument Reports on: progress of the Investment Strategy, cofinanced activities, financial outputs Reports are: Weekly, Quarterly, Annual MA can audit the management system Fund Manager carries out on the spot verifications on final recipient. Revised System, procedures, templates Note reporting regulation - according to Reg. (EU) n. 1303/2013

Marketing and awareness raising Support from Regions, Chambers of Commerce and Ente Nazionale Microcredito Online and social media campaign Workshops organised through the Regions Tutorial video #Crescereimprenditori initiative, promoted by Ministry of Labour and managed by Unioncamere Overview of marketing strategy and product advertising amongst targeted final recipients - timing, TV, radio campaign, workshops and newspaper ads, etc.

Lesson learned, feedback and recommendations Overview. Feedback on learning from process, no description of the content of the study

Lessons learned SELFIEmployment better with stronger communication at municipality level (close to final recipients) Southern regions presented many more applications than the rest of Italy Regional network fundamental to success Entire application procedure is on-line (saving time, helping monitoring) Feedback Final recipients found some difficulties when filling out the project application Many applications rejected for lack of digital signature or attached documents SELFIEmployment is a new financial instrument for targeted final recipients (new market)

For Managing Authority Recommendations For Managing Authority More involvement of regions and municipalities would help raise awareness Enhance communication: better when close to recipients (municipality level) and supported by local institutions Strategical role of business development services Difficulties in combining different forms of support Need to clarify the eligibility criteria for the selected target groups For Fund Manager Simpler and smoother application procedure Revised Note on standardised common indicators - could reduce the complexity of the identification of those indicators

State of implementation on May 24 Overview. Feedback on learning from process, no description of the content of the study

N. Applications submitted SELFIEmployment Fund N. Applications submitted 1.361 N. test autovalutazione superati N. Accepted 285 Loan amount 9.360.146 Microfinance 31% 2.936.020 Extended microfinance 24% 2.208.292 Small loans 45% 4.215.835 updating 24 may 2017

Funding by region updating 24 may 2017

Type of activity funded updating 24 may 2017

SELFIEMPLOYMENT: Successful cases Business name: Twin recording di Fucito Angelo Activity Description: Film post-production activities, video and television programs and organization of dubbing courses Location: Puglia Region Age: 29 years old Product: microfinance Loan amount: € 23.393,72

SELFIEMPLOYMENT: Successful cases Business name: Le Sissi Activity Description: Digital evolution of handcraft tailoring: design application, which allows you to draft and sketch dress Location: Veneto Region Age: 28 years old Product: microfinance Loan amount: € 19.415,00

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