Comitato Nazionale Italiano Permanente per il Microcredito

Legal Structure and Institutional Mission

The Permanent Italian National Committee for Microcredit is the natural continuation of the Italian National Committee for “ 2005 International Year of  Microcredit “, born in reply to resolutions 53/198, 58/488 and 58/221, through which U.N. General Assembly proclaimed 2005 as the "International Year of Microcredit", and invited Member States to establish National Committees, representatives of the whole civil society, in order to facilitate the achievement of the "Millennium Development Goals" through  the diffusion of microcredit and microfinance activities to reduce poverty and financial exclusion.
The Permanent Committee’s operational plan, in-line with the initiatives and  projects carried out by the "2005 National Committee of Microcredit" aims at finding an "Italian way to microcredit" levering on the potential, professionalism and patrimony of knowledge that may be found in our Country and developing, on the same time, positive synergies with other Countries (European or not) committed towards the same direction.

The new Committee, which met for the first time on July 14th, 2006 under the presidency of the Vice President of the Senate, Sen. Mario Baccini, passed under the Italian Presidency of the Council of Ministers following the provisions by the Italian Budget Law 2008. 
The Committee includes representatives of  Public Institutions, of local Public Bodies, of NGOs, of Institutes and Foundations, of banking and entrepreneurial sector. Moreover, the abovementioned Committee avails itself of the precious assistance of Ambassador Sergio Vento in his capacity of Vice President .
The extraordinary role of the Permanent Committee has been recognized by the President of the Italian Republic, Mr. Giorgio Napolitano, who has granted his Permanent High Patronage therefore acknowledging the special solidaristic value of the Permanent Committee as well as its importance for the fulfilment of the obligations undertaken by Italy with its U.N. membership.

Activities and Operational Methods

The activities and the ethic mission of the Committee

The Committee is oriented towards the support of all those initiatives directed to fight poverty and to access the forms of funding in favour of social categories which would otherwise be excluded both on the national territory (domestic micro finance), and in foreign countries (micro finance for international cooperation). On the domestic side, the Committee intends to define strategies and actions coherent with the objectives of the Country and in agreement with the instruments and the anti crisis interventions that have been established at a Government level. On an international basis, the interventions of micro credit and those of micro financing will be decided with the cooperation of the Ministry of Foreign Affairs and in agreement with the policies of international cooperation implemented in Italy.

In particular, the activities and the projects promoted by the Committee are made up of a credit component and a technical component; with reference to the first, we deal with specific support programmes to micro credit and micro finance activities; in the second case, to programmes directly or indirectly connected to the study and the training in the micro credit and micro finance sectors, in support of the market and of the diffusion of a culture of micro finance, micro credit and financial inclusion .

Credit activities

The National Committee, through its members and the partners of each single project, will also promote, with the means made available by single public operators, national and Communitary and privates, initiatives in favour of the poor or victims of financial exclusion and of companies, particularly co-operative societies and micro businesses, with difficulties in accessing credit in order to finance new projects of entrepreneurial development ethically and technically approved.
The Committee institutionally intends to manage public and private funds to fight poverty and financial marginalization with the help of the micro credit instrument.
Coherently it will also support, with the help of its members and partners of the single projects, both on the National territory and in the transitional economies as well as in the developing countries, micro financial initiatives aimed to favour the rising and the development of micro businesses – according to the dimensional parameters indicated in the recommedation 2003/361/CE – constituted under any legal form. In particular, the Committee will support, always with the help of its members and the partners of the single projects, micro finance programmes that include one or more of the following components :

•    Credit products (eg micro credit, micro leasing)
•    Payment products (eg. Money transfers, credit cards, prepaid cards)
•    Products to collect savings
•    Insurance products
•    Guarantee products
•    Products aiming to favour the financial lever on single projects
The Committee will also directly promote, technical services of studies and training in support of the technical – managerial aspects of the initiatives undertaken.

Technical activities

These activities will be financed with public national resources assigned to the Committee as well as, where possible, with funds of the European Community and private resources.
With respect to the technical aspect, the operational lines will be different. They could include, in the first place, initiatives referable to the production of services in support of projects with micro credit and micro finance components: in this category, for example, we can include all those initiatives of training, research, data gathering and analysis, legislative promotion in matter of micro finance.
Another area of technical activity is referable to the initiatives of networking aimed to extend and reinforce the bonds amongst operators – profit and non profit – and institutions in this field as well as the initiatives of promotion and diffusion of micro financial culture.

Operational models

The role of the Committee

The operational guidelines can be supported throughout direct interventions of the Committee (direct playing) which can be translated into the promotion, putting into action, technical and if possible, financial support (the latter with private resources especially raised for this purpose), in the management and the monitoring of specific micro credit and micro finance initiatives.
The Committee can furthermore promote indirect interventions (matching field), aimed to support projects carried out by other institutions but certified by the Committee.

The Funding

The development of the activities which have been described will be financed both with public resources annually destined to the Committee for its functioning, and with extra resources both public (national and from the European Community) and private.
The economic resources (of public, private or Community origin) used by the Committee to support the projects concerning the credit activity could be donations, soft loans, ordinary credits, funds put at the disposal to support single projects with the obligation or not to reimburse. Non monetary resources could also be obtained in terms of goods and services.

The micro finance activities

In the next three years, the Committee will lay down the foundations to implement the necessary instruments for its own intervention in micro financial activities. This type of intervention can be done also through banks, financial intermediaries or foundations, according to the following models already determined by the Committee:
a.    offer of resources to be used for the constitution of guarantees in favour of private investments in programmes of micro credit or micro finance;
b.    offer of public or private resources to directly donate to micro credit;
c.    promotion of Investment Funds for Micro finance.
The Committee intends to operate following the referred lines of intervention, all  complementary among them.
It will therefore be necessary to specifically define the way of functioning and the operational schemes to adopt, also jointly with the financial intermediaries and the banking foundations that adhere, respecting the laws in force concerning banking and financial activities  and according to the programmatic guidelines following.

Guarantees

The Committee will be able to assign, also with the help of its members and partners of the single projects, part of the private resources raised to supply forms of credit risk migration in favour of micro credits and micro finance products that correspond to the requirements of eligibility established by the Committee. These forms of guarantee can be property guarantees, financial guarantees or personal guarantees and can be articulated so as to act as instruments of risk mitigation in order to calculate the compulsory property requirements by the banks.
On the basis of a specific Agreement, the Committee can facilitate the transfer of these sums with use constraint: a) to a broker who undertakes the management and/or; b)to a non profit institution which deals with the management using a broker. The resources can be used both in favour of micro finance projects supported only by private investors and in favour of projects financed by a mixture of loans and donations.
The guaranteed projects can be supported by other guarantees and counter guarantees offered by other institutions. The Committee can also promote actions to favour the constitution of co guarantees and counter guarantees of third parties.

Micro credit and Micro financial Products

The Committee will be able to favour the destination of the resources obtained by public, national and Community as well as private entities to constitute funds to support micro credit projects and micro finance .
The Funds can have a rotational nature and can support micro credit and micro finance projects that correspond to the requirements of the eligibility established by the Committee. On the basis of a specific Convention, the Committee will be able to favour the transfer of the entitlement of these sums to a banking or finance intermediary, which will take on the responsibility of the management with use constraint. The resources of those funds will be assigned to single projects, following schemes of totalitarian financing or schemes of co –financing which will be applied to other resources, also those coming from private investors. In the case of co-financing, the part of the funds made available by the Committee will be able to constitute the tranche of deferred reimbursement of the financing and thus reduce the risk for private investors.
The projects favoured by this type of intervention can benefit of the forms of credit risk mitigation indicated in point a).

Micro Credit Funds and Closed Investment Funds for Micro Finance

The Committee will exercise activities aimed to encourage and stimulate the promotion and the constitution of Micro Credit Funds and Closed Investment Funds for Micro Finance which will be applied to the resources of third investors and donators. These types of funds will serve exclusively to finance micro credit and micro finance projects that have the requirements of eligibility established by the Committee. With specific Conventions, the Committee will be able to determine, case by case, the official subjects and the managers of the single funds. Those who adhere to the Fund can be investors, public and private donors; the resources that make up the Funds can also be considered as donated funds. The part of the investments acquired with these funds given as donations can serve as a way to reduce the risks connected to the other parts, for example through mechanisms of delaying the reimbursements and of renunciation of the increase of value of the part deriving from the investment. The investments carried out with the Funds can be supported by the forms of guarantee established in point a).

The technical activities

The year 2009, and the triennium 2009 – 2011, will see the Committee engaged in the development of the micro financial market both through training activities, research, formulation of legislative proposals and through promotion and diffusion of the micro financial culture. The constitution of a data base for the Italian micro finance will be functional and unavoidable.

Training and applied research

A fundamental activity for the next three years will be to create specific instruments of analysis and applications useful for the definition of an “Italian way to Micro Credit” and to the training of operators specialised in micro credit and micro finance.
The training activity will be done through courses, also with stages, organised directly by the Committee, in the non profit institutions and in the offices of finance intermediaries.
In the planning and the realisation of the training programmes, the Committee will use the national and international network of the Universities and dedicated research entities in this field, also through specific Conventions.
The resources will be mainly concentrated on the following areas concerning the financial exclusion and micro finance projects:

•    diffusion of financial culture (financial education)
•    models of feasibility studies
•    models of governance
•    realisation and monitoring of business plans
•    analysis and mapping of the processes