Our microcredit activities supporting people, small enterprises and social enterprises in Italy.
Agriculture and development of rural supply chains, microcredit and financial inclusion, social enterprises and technology are the areas where we invest to give innovative answers to the great social challenges.
In countries where Etimos operates, most of the population depends on agriculture for its income and survival.
Food sovereignty and territorial protection
The fate of these people is linked in large part to progressing from subsistence farming to a more productive activity, the only thing that can guarantee food security, creation of market supply chains, a progressive independence from international aid and better living conditions especially for the most disadvantaged communities.
The Etimos challenge is to ensure the sustainability of this process of development and transformation of rural communities. In our projects and investments we consider it essential to reconcile the improvement of production techniques and consolidation of market supply chains with the preservation of local traditions and the safeguarding of rights, of all rights: those of the people, on the one hand; and those of the environment and the earth, on the other.
The Etimos approach
For this reason, we continue to invest in innovative micro-credit services in rural areas (for example, the trend of microcredits in nature, that we are exploring in Africa), in the experiences of community and cooperative gathering of small producers, in the strengthening of production related to organic circuits and Fair trade.
There are more than 2.5 billion people in the world who live without access to basic financial services such as credit, savings, insurance, or even the mere opening of a checking account.
Financial exclusion: a widespread problem
This is a condition of exclusion that accompanies and often exacerbates other forms of vulnerability, such as low income, unemployment, lack of housing, difficulty in accessing healthcare or education, gender inequality, the ability to deal with emergencies and to build a better future for one’s children. Microcredit and microfinance contribute to filling this gap, both in developing countries and in the richest economies, affected by phenomena of increasingly widespread impoverishment. For instance, according to Global Financial Inclusion Indicators (Global Findex, in March 2012, www.worldbank.org/globalfindex): in high income countries, 89% of adults have a bank account. This percentage drops to 41% in developing economies and to 23% of those living on less than $ 2 a day. Also in developing countries, only 37% of women have a bank account, compared with 46% of men (a gap that persists even in stronger economies and among wealthier income groups).
The Etimos approach
We were one of the pioneer organisations in the field of microcredit. Since the late 90's we operate in developing countries, where we invest in organisations that work with the most disadvantaged groups: for them, credit is the first step of a process of emancipation and growth. Since 2010 we are also present in Italy with a broker specialising in the field of microcredit in support of microenterprise and individuals in difficult situations.
There is often, especially in developing countries, a strong correlation between economic vulnerability and greater exposure and fragility in the face of natural disasters, which in turn generate further deterioration in the economic conditions of the affected communities, thus triggering a kind of vicious circle.
The Etimos approach
Etimos has experienced/experimented/witnessed in recent years the efficacy of microfinance in a number of post-emergency situations and country contexts: in the face of natural disasters like earthquakes and tsunamis, as a result of war, in developing countries, in the Balkans and in some Italian regions.
It is clear that microfinance is not a tool for first responders, during the worst (and most reported) phase of an emergency, during the urgent rescue efforts. Its role becomes important, however, in the step that immediately follows.
Natural disasters represent a violent shock to the context they befall: they paralyze the economic system, on a more or less large scale, preventing the circulation of money. The entry from outside of free products and services to the population may cause further damage, disrupting even the few active and working local businesses. Microfinance uses a different approach, which is to restore the liquidity of the system and restart the lending activities by local financial intermediaries, which in turn provide the necessary support for restarting a large number of small and micro enterprises.
The effectiveness of the results
Several impact assessments (after the tsunami in Sri Lanka and after the earthquake in Abruzzo) have demonstrated the ability of microfinance programs to quickly restore the preexisting levels of economic and psychological wellbeing in the affected populations. This is also thanks to a particularly efficient use of available resources: one euro invested in microfinance can enter a guarantee fund or a revolving fund that can reuse it multiple times through the loan mechanism loan (and its repayment), multiplying the initial value of the resources invested and the number of people who can be helped.
Etimos believes that financial education is fundamental in multiple levels and in multiple contexts. That's why we promote training and support projects, both in developing countries and in Italy, to adults, children and teens.
In developing countries and in Italy
In developing countries, financial education may accompany microcredit services, integrating them with specific financial training about savings and proper use of the money, both in the family and in small and micro enterprise management.
In Italy it can prevent increasingly common events of over-indebtedness and exploitation; it also can provide tools to reinforce microenterprise experiences borned as an answer to unemployment.
Children and teens
Financial education is another activity and it is oriented to children and teens.
In Italy many people do not know specific financial matters: Italy is at the 46th place of the World Competitiveness Index for the diffusion of financial education.
In our education programs we speak about the relationship between money, work, personal fulfillment and the basic mechanisms of economy and finance. We make children protagonists and makers of personal growth and job creation.