Italy: microcredits for financial inclusion

PerMicro’s business microcredits range between € 2,000 and € 25,000. What makes them unique, however, is that they target people on low income, resident migrants and ethnic minorities that have limited or no access to the formal banking system.

Gjeline MihaSince she was a young woman in Albania, Gjeline has been a tailor. After her arrival in Italy she continued to do tailoring works in her home for family, friends and acquaintances.

When her daughters grew up and became independent, she decided to open her own tailor’s shop to contribute to the household income. However, for someone of migrant origin, in search of a path to self-employment, obtaining a loan from a bank can be an insurmountable obstacle. With no guarantees and no credit history, the access to formal banking instruments is severely limited.

Gjeline turned to PerMicro, a unique Italian institution specialised in microcredit.  With the funds she secured from PerMicro she was able to settle her debts and buy equipment and furniture for her business. After renovating the premises with the help of her husband she set up shop in a strategic residential neighbourhood in Genoa.

PerMicro’s business microcredits  range between € 2,000 and € 25,000. What makes them unique, however, is that they target people on low income, resident migrants and ethnic minorities that have limited or no access to the formal banking system.

PerMicro was established in Turin in 2007 with the goal of fostering financial inclusion of people excluded from traditional banking channels because of lack of guarantees or credit history, or because of their precarious working position. Today PerMicro is the first Italian microcredit provider operating across the country, combining a business management approach with social goals.

The organization has 14 well-established branches in 11 Italian regions. With a 23.7% ownership stake in PM, Banca Nazionale del Lavoro S.p.A. is PerMicro’s single largest shareholder.

The role of the CEB

In 2013 the CEB supported PerMicro with a € 6 million loan.

PerMicro has two main product lines: (a) family credits, which help borrowers meet urgent needs and improve their living conditions, and (b) business loans to help new entrepreneurs set up a business and others to expand or improve existing activities.  Since October 2007 it has disbursed 9,556 microcredits worth € 60 million.  

The CEB funding provides additional resources needed for PerMicro’s business lending. It helps lower PerMicro’s average funding costs at a critical take-off stage for the organization. With the first tranche of the CEB loan worth€ 2.85 million, PerMicro has already financed 233 enterprises all over Italy.

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