Firtuna G. Adugna Trang Do Francesco Sansoni

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

 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)

There are 3 levels of financial exclusion: Levels of financial exclusion Levels of transaction banking exclusion, Levels of credit exclusion.

 Levels of Financial Exclusion in individual EU 25 countries. Source: Eurobarometer 60.2 and Base: All adults aged 18 or over

 Levels of transaction banking exclusion: Source: Eurobarometer 60.2

 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

 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

 Financial inclusion by age Young people (aged 15-24) and adults aged 65 and over were most likely to be financially excluded. Source: Demirguc-Kunt and Klapper, 2012

 Financial inclusion by gender Female were to be excluded more than male from all forms of financial services. Source: Demirguc-Kunt and Klapper, 2012

 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

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 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)

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

 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.

 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

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.

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.

 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.