PerMicro
Launch Event
Richard Pelly
Chief Executive
February 1st 2011, Milan
EIF at a Glance
EU specialised institution for SMEs, risk financing
Venture Capital and Mezzanine (fund of funds)
Structuring and Guaranteeing portfolios of SME and microfinance loans/leases
Geographic Focus /
Intermediaries
EU 27, EFTA,
Candidate Countries
Distributing through Banks
and Funds
Authorised Capital
€ 3bn
EIB: 61%
EU: 29 %
Fin. institutions: 9 %
To be issued: 1%
AAA rated
Staffing, Culture and Values
1/9
Dual Objective of Meeting EU Policy Goals & Generating a
Satisfactory Return on Equity
Microfinance in Europe
 Micro-enterprises make up 90% of businesses in Europe and 99%
of yearly enterprise creation – 33% launched by the unemployed
 Important growth generating market segment with social and
financial impacts
BUT
 Market is fragmented and underdeveloped (particularly in
Western Europe)
 Large variety of MFIs (small non-profit organisations or
governments-owned development agencies, large commercial
banks)
 Microfinance often characterised by subsidised services and not
self-sustainable
2/9
Efficient Support of the European Microfinance Sector Important
for Entrepreneurship and Job Creation
EIF as Catalyst of Microfinance within the EU
 Microfinance as an emerging strategic business line
 Expertise and track record (EPPA, JASMINE, RCM, JEREMIE)
 Financing capacity
 Dedicated resources
 Geographic reach across EU-27
3/9
EIF Microfinance Operating Model
4/9
Microfinance: EIF’s Activities since 2000
 EIF manages various mandates designed to encourage microfinance
institutions to increase financial availability to micro-entrepreneurs and
micro-entreprises
 Through these mandates, EIF has already invested in microfinance
 Guarantees transactions signed under the EU MAP (2001-2006)
and CIP (2007-2013) programmes for a total commitment of
€ 636m
 Participation in securitisation transactions for a total commitment
of € 120m
 JASMINE Technical Assistance for € 6m to support microfinance
providers: 15 institutions selected and supported (including
PerMicro)
5/9
Broad Range of Microfinance Activities
The Progress Microfinance Initiative:
“Umbrella” for Existing Microfinance
Initiatives
■ Initiative launched in 2010 to promote microfinance in the EU-27
■ EUR 200m funded by EC (DG EMPL) budget and EIB - managed
by EIF
■ Key objectives: increase availability of finance for enterprise
creation for the benefit of micro-entrepreneurs, the unemployed
and groups with limited access to the traditional banking system
■ Key aspects: rapid market impact, leverage effect, EU-wide
promotion, social inclusion/job creation
6/9
Microfinance Sector in Italy
 95 % of SMEs in Italy are micro-enterprises
 Market fragmented with some initiatives from public and private
sectors but no cohesiveness; focus mainly on Southern Italy so far
 Microcredit requirements differ from region to region
 82 % of microfinance institutions are not-for-profit (cooperatives
micro-lenders, NGOs)
 The beneficiaries are start-ups and micro-companies of less than
five employees, as well as women and immigrants. Only 27% of
the credits granted are to women and 21% to immigrant
populations
 Evidence that the microfinance sector in Italy is nevertheless in a
phase of steady development and emergence of dynamic
institutions aiming for strong growth and real sustainability
7/9
PerMicro’s Model
■ Targets and strategy in line with EPPA criteria
■ Higher risk, earlier stage funding, capacity building
■ Shareholders and governance have a clear focus on microcredit
■ Centralised assessment and decision making process
■ Branch network with high degree of outreach, particularly in
Northern and Central Italy
■ Strong track record, management and staff expertise in
microfinance
■ Strong attention to costs and risk covering, balance between
social objectives and commercial approach
■ Sustainability of model will encourage other players to start microventures in Italy
8/9
EIF’s First Direct Equity Investment into a Non-Bank Microfinance
Institution