Péter Felcsuti Policy Implications for the Use of Structural Funds for Developing Microcredit and Self- employment for Roma Communities With support from the EU A Way Out – and a Possible Way Forward Social Microcredit, Financial Inclusion and Self-Employment Kiútprogram Closing Conference 4 September, 2012 Brussels

Policy implications for the EU  Specific initiative for inclusive social microcredit is needed. –Existing Progress Microfinance Facility is not satisfactory, it provides only: guarantees, sharing the providers' potential risk of loss funding to increase microcredit lending Inclusive social microcredit programmes should be complex, containing social and business elements: –Continuous personal mentoring; –Countervailing labour market discrimination. –Training in community development and networking; –Financial and business administration training; –Business network development; –Professional training; 2

Policy implications for the EU, continued  Before scaling up the programme in multiple countries, conducting pilots are essential, for which the tender framework needs to be setup by the EU.  Monitoring and impact evaluation built into operating procedures are necessary for both pilots and regular operations  Modifications in the regulation to allow for tax exemptions to agricultural primary producers, at least in the disadvantaged regions.  Financial services by the banks available to the poor should be encouraged also on EU-level. 3

Policy implications for the national states Efficient social microlending is only possible with committed state involvement. Predictable regulatory environment. Normative support to become an entrepreneur to previously unemployed new business owners (welfare bridge). Temporary allowance for taxes and/or social contributions payable when people with low education level are employed – including self- employment. Reduction of administrative burdens of becoming an entrepreneur; removing entrance barriers especially for micro- and small enterprises. 4

Policy implications for the states, continued Tailoring national regulation of the financial and stock market to meet the needs of social microcredit. Encouraging large corporations to support social microcredit as part of their corporate social responsibility (CSR) programmes. Strengthening the organisational structures and tools that could secure efficient counteraction against discrimination of the Roma. Specific training programs meeting output (and not input) indicators 5

Specific questions for discussion Is an EU-wide comprehensive social microcredit programme for Roma inclusion needed? The role of the national authorities. Financial inclusion or a broad social and economic inclusion? Working in formal or informal economy? Parameters of the target group? 6