A Social Performance Analysis of Italian Microfinance

Assessing social impact of MFIs in Italy
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This paper analyzes Italian MFIs’ social performance according to the framework developed by the Social Performance Task Force. It uses data collected in 2008 on a sample of 27 leading Italian MFIs.

Features of the Italian microfinance sector include small staff size, reliance on volunteers, below-market rate pricing policy, non-exclusive commitment to microcredit activities, and the free provision of nonfinancial services. Study findings indicate that:

  • Social inclusion and fight against poverty are key goals for MFIs;
  • Microcredit is essentially a tool to address social and financial exclusion among vulnerable groups;
  • Microcredit is used only marginally as a financial instrument for small and medium enterprises and local development.

Finally, Italy’s microfinance sector is heavily subsidized, and demonstrates a poor commitment to financial self-sufficiency. This, combined with institutional constraints such as lack of a suitable regulatory framework, prevents financial soundness. They are unable to focus on the most disadvantaged groups, such as migrants, youth, usury victims and women.

About this Publication

By Botti, F. , Corsi, M.