Personal microcreditThe French Savings Banks

experience

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The French Savings Banks: general overview

17 Caisses d’Epargne27 million customers4.3 million cooperative shareholders4,242 branchesSavings* : 335 Mds €Outstanding credit* : 155 Mds €* 31.12.2010

Part of BPCE Group

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FNCEFNBP

BPCE Group: a strong position in commercial banking and insurance

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No.1 BANK FOR SMALL- TO MEDIUM-SIZED COMPANIES, CRAFTSMEN AND FRANCHISEES

No.1 PRIVATE BANK FOR SOCIAL HOUSING, THE LOCAL PUBLIC SECTOR AND THE PUBLIC HEALTH SECTOR

No.2 BANK FOR INDIVIDUAL CUSTOMERS No.2

BANK FOR SELF-EMPLOYED PROFESSIONALS AND ENTREPRENEURSNo.2

BANK FOR REAL ESTATE FINANCING

Financial inclusion: part of the identity of the savings banks

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The commitment of French Savings Banks in microfinance nowadays (2010 figures)

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What is personal microcredit?

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Definition: small loan to people who cannot get it from the banking system and who will be helped to gain or regain control of their personal finances.

Target groups:• low-income people (people on welfare, working poors)• people without credit history (immigrants, young people...)• social difficulties (divorce, illness, isolated people, roms...)• professional difficulties (unemployment, precariourness...)• difficulty to use financial services (illiterate...)• people in suburban areas

Context:• a growing presence of credit in the people's daily life• development of credit-scoring models, with discriminative

impacts

Comparison with business microcredit

Our approach

A financial inclusion approach, beyond microcredit:• Wide range of products and services• Emphasis on follow-up, both on financial and social aspects

How?• Creation of non-profit institutions called Parcours Confiance

(path towards trust)• Dedicated experienced loan officers• Partnership with non-profit institutions specialized in social

mentoring (job search, psychological help…)• Possibility of financial literacy trainings by Finances &

Pédagogie

Characteristics of the credit• € 300 to 12 000 – 12 to 60 months• 2 to 3% interest rate• 50% public guarantee (Fonds de Cohésion Sociale)

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Client’s profile

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Marital status: 74% single personsProfessional situation: 54% out of work

Average age: 40A slight majority of women

48%11%

6%8%

3%1%4%

3%0%

7%2%

0%11%

L'achat d'un véhiculeLe permis de conduire

La réparation d'un véhiculeUn équipement électroménager

Un équipement informatique ou audiovisuelDe l'outillage ou autre matériel professionnel

Une formation professionnelleVos études

Un bilan de compétencesDes frais liés à l'accès au logement

Des dépenses de santéUn dispositif de chauffage

Autre type de projet

60% of the financed projects have a professional purpose

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Q1. What did you finance with this microcredit?

Voiture (65%)

Equipement(12%)

Formation, orientation

(7%)

Microcredit purpose

Impact and outcomes

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A the end, 76% of clients assert having improved their personal situation in at least one aspect (financial situation, housing, professional situation…).

76%

57%

34%

21%

22%

0% 20% 40% 60% 80%

Au moins 1 amélioration

Amélioration budgétaire

Situation professionnelle

Logement

Situation familiale

Focus on professional projects

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80% of the beneficiaries with a professional project are or have been employed since the microcredit. Among borrowers who were initially unemployed, half had found work.

Situation d'emploi suite au micro-crédit

N=517 projets professionnels

Situ

atio

n d'

empl

oi

à la

sou

scri

ptio

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High level of satisfaction

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Au final, le microcrédit est plébiscité avec 98% de bénéficiaires satisfaits

(70% de très satisfaits)Q39. Globalement, êtes-vous satisfait d’avoir eu recours au microcrédit ?

Main conclusions of our experience

Personal microcredit has a proven social utility, not only for access to employment but also for improving financial and social background (with indirect effect on employment).

Customized financial and social follow-up is a key of success, which supposes strong local partnerships with non-profit institutions and local authorities. It represents a cost that should not be under-estimated: cost of the follow-up, but also cost for making partnerships as efficient as possible at a local level.

Public support has been decisive (guarantee fund, communication to the general public, coordination for mutual learning and best practices exchange, regulation, grants…).

Banking models have tangible advantages (pooling of the resources, scale-up...).

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Challenges

Scale-up, by improving the sustainability of the model

Analyze long-term returns for the society and for the banks

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