microcredit in france: adie ’ s experience
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Microcredit in France: Adie ’ s experience. Milano, october 15th 2013. Long time predominance of wage labor Welfare State culture High administrative complexity High level of social contributions for businesses High density of bank branches. Microcredit in France : institutional context. - PowerPoint PPT PresentationTRANSCRIPT
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Microcredit in France: Adie’s
experience
Milano, october 15th 2013
Long time predominance of wage labor
Welfare State culture
High administrative complexity
High level of social contributions for businesses
High density of bank branches
Microcredit in France : institutional context
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• 13.4 % of population lives under the poverty threshold • 2 230 000 households live on welfare (June 2013)• 1 536 000 employees are considered working poors (2011)• Unemployment rate is 10.8% in Q4 2012
The figures for business creation have grown and reached 549 976 in 2012
Creating its own job is now recognized as a way to fight against economic exclusion
Microcredit in France : employment context
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Business pyramid : 93% of businesses stay small (less than10 employees)
Secteur informel
7 (0,3%)
25 (0,8%)
163 (5,6%)
984 (33,6%)
1 746 (59,7%)
200 employees and more
Between 50 and199
employees
Between1 and 9 employees
Between10 and
49 employees
0 employee
In thousand
s
Péfecture de Région IDF 15/11/11
Microcredit in France : entrepreneurial context
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2001 2005 2008 2010 Today
BIRTH GROWTHLEGITIMITY MATURITY
May 15th 2001
Non banking microcredit institutions are allowed to borrow from banks to onlend to their clients. (Article L.511-6 du Code monétaire et financier).
August 2nd 2005
Cancellation of the interest rate cap on professional loans for self-employed people
January 18th 2005 Non banking microcredit institutions are allowed to lend for needs related to job integration.Non banking microcredit institutions have access to the National Bank debtor files
August 4th 2008
Non banking microcredit institutions are allowed to disburse professional loans to entrepreneurs, regardless of their social situation
July 1st 2010
Non banking microcredit institutions can borrow from individuals to onlend to their clients
Microcredit in France : legislative context
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Deliver microcredits and business development services to the largest possible group of people with professional needs to create or develop a business and no access to classical bank loans.
Finance micro-entrepreneurs
Deliver BDS to micro-entrepreneurs
Contribute to improve the legislation regarding microcredit and business creation
Adie’s missions
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Unemployed, people on welfare, working poors, micro-entrepreneurs…
Strong activity in the poor suburbs (23% of new clients)
Special effort to target the rural areas (23% of new clients)
Strong activity among migrants (28% of new clients were born abroad)
Historical activity with the gypsy communities (10% of new clients)
All type of economic activities represented …
People excluded from the classical bank loans
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Adie’s clients
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Examples of the variety of activities conducted by Adie’s clients
In 2013 (up to September 30th) :
9051 business microcredits disbursed
1679 family microcredits disbursed
Average business loan: 3650 €
34 000 active clients
734 micro-insurance contracts subscribed
=Business Development Services
+Business Microcredit and
Family Microcredit
€
12 092 persons benefited from at least 1 BDS5842 benefited from at least 2 BDS
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Tools to fight against economical exclusion
+Micro-insurance
Conditions
• No access to traditional bank loans
• Business creation or business existing for less than 5 years
• Total cost of the project < 20 000 €
• Co-signer up to 50% of the loan amount
Product
The business microcredits can finance whatsoever need (working capital, investments, supplies, etc.)•Up to 10 000€ •Interest rate : from 6.76% to 7.76%•Upfront fee: 5%
Possibility to have access to further funding : quasi-equity loans, grants
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Business microcredit
Conditions
• No access to traditional bank loans or credit institutions loans
• Co-signer up to 50% of the loan amount
Product
The family microcredits can only finance job inclusion needs : strong focus on transportation expenses•Up to 3000 € •Interest rate : 7.76%•Upfront fee: up to 5%
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Family microcredit
• Micro-insurance products target new businesses or existing businesses •Products have been tailor-made to meet Adie’s clients needs•Products are delivered through Adie and managed by two insurance companies : Axa and Macif
Multi coverage product for activity which requires commercial premises:•Professional liability•Store related coverage (fire, water damages…)•Damages on professional assets up to 10 K€•Financial support in case of accident or hospitalization
Multi coverage product for activity without premises
Auto Insurance:•Third-party liability•Damages on transported goods•Assistance in case of accident or breakdown
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Micro-insurance
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Business development services adapted to clients
All BDS are free for clients and non clients
Campaigns to meet with clientsAdie Connect
A website dedicated to clients
15 regions/ 119 branches in metropolitan France and overseas
450 employees & 1 300 volunteers
A national call center for appointments set-ups
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An extensive and multichannel network
Since 1989
127 000 microcredits disbursed
91 205 business created or sustained
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Social impact
Creation of a « social and financial exclusion rating » to evaluate the fidelity to the most excluded people
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Social impact
SPI report (Social Performance Indicator) once every three years to assess the alignment of the organization and process with the social goals of the institution
SPI report issued by Cerise, a French NGO
Last report in 2011 : grade 63/100 (medium 54/100 for 500 MFI in Europe and developing countries )
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Social impact
« enterprise sustainability and job inclusion » study once every three years
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Social impact
Adie received the agreement to borrow from banks or financial institutions to onlend to its clients in 2003
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Business model for credit funds
Adie built up an extensive garantee scheme thanks to French public devices and to banks
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Business model for credit funds
Adie’s model is relying
-On the expense side, on a mix of employees and volunteers workforce
-On the revenue side, on a mix of subsidies and financial income from
microcredits
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Business model for operating expenses
In M€ 2012 2012
Operating expenses
31,7 Subsidies and donations
24,9
Financial expenses
1,2 Financial incomes (including investments products)
6,3
Exceptional income
0,2
TOTAL 32,9 TOTAL 31,4
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Business model for operating expenses
Current strategic plan : the stress is on productivity
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Business model for operating expenses
2010 2011 2012 2013trend
2014expectation
Nb of loans disbursed
12 023 12 261 13 157 14 623 16 820
Amount of loans disbursed(M€)
32,9 34,1 36,8 50,4 57,8
Outstanding capital (M€)
48,3 52,6 58 71,8 89,2
Operating expenses (M€)
28,4 28,2 29,1 28,7 31,3
Financial margin
4,2 5 4,7 5,9 7,7
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Thank you for your
attention