NATIONAL OBSERVATORY FOR THE

FINANCIAL INCLUSION OF MIGRANTS

A project co-financed by the European Fund for the

Integration of Third-Country Nationals

Implemented byCeSPI,

Daniele Frigeri – Scientific Director

Italian National Observatory for the Financial

Inclusion of Migrants

A long-term project: 2012, 2013, 2014

Financed by the European Union through the European Fund

for the Integration of Third-Country Nationals

The first of this kind in Italy and in Europe

The result of a partnership between the Italian Ministry if

Interior and the Italian Banking Association (ABI)

Awarded to CeSPI (the Centre of International Political Studies)

following an open tender procedure

Background data

Immigrants with (regular) residency (Jan

2011) 4.570.317

Number of companies owned by immigrants

(Dec 2010) 336.583

% of minors (Jan 2011) 22% Current Accounts held by immigrants

(Banks + BancoPosta) 1.782.426

% of immigrant minors registered with

primary and secondary schools

(2010 academic year) 7,4%

“Banked” index 2010

(% of legally resident adult immigrants with

current accounts)

61,2%

Income tax paid (2009 tax year) 5,9 mld € Total amount of remittances sent from Italy

(Dec 2011) 7,1 mld €

Number of immigrants in employment 2.234.549 Developed financial profile (% of current

accounts held by immigrants) 18%

Source: CeSPI calculations based on data from the Italian National Institute for Statistics, Union of Italian Chambers of

Commerce, Bank of Italy and the Italian Treasury; ABI-CeSPI 2009

Financial Inclusion process:

is key in encouraging and accelerating the integration process

is a complex one: there is no set structure that everyone automatically follows

presents significant degree of variance in the financial behavior of migrants

Main objectives

Ongoing monitoring of financial inclusion of migrants through an

integrated system containing updated information which can track

developments over time

Supporting and strengthening migrants’ financial inclusion process

Supporting the development of migrants bankarization towards

developed financial profiles and strengthening entrepreneurship

Creating a permanent forum involving financial entities and policy

makers

Providing an integrated information system and tools for financial

entities and policy makers, developing a systemic approach

Setting a national and European standard

Observatory structure

Monitoring of developments

Research into the supply side

Research into the demand side

Research into business/entrepreneurial activity

Other players in the financial inclusion process

Research into the supply side

Italian Banking System

Post Office financial services

Annual research investigating the main features of the relationship

between bank and immigrants in the areas of:

BANKED INDEX FOR MIGRANTS

credit

savings

payment services

money transfers

microfinance

Small business

Supply Side - data

8

277 banks responding

62%

of the banking system

branches

74%

of the banking system total

assets

Distribution of sampled

branches

21 nationalities, 88% of resident migrants

Homogeneous with respect to

the entire banking system

Research into the demand side

Survey on migrants financial needs trough a face-to-face questionnaire of 70

questions administered to a statistically significant sample (920 surveys, 10

nationalities)

The goal is to examine the needs and financial behaviour of third-country nationals in

greater depth, especially in terms of their relationship with banks, their management

of savings, the development of their financial "profiles" and the financial behaviour of

immigrant families.

Focus Groups with migrants aimed to a deeper understanding of the main

results of the field analysis (survey)

Main areas of research:

Relationship with banks

Process of accumulation and allocation of savings

Financial profiles

Financial behavior of migrant families

Research into entrepreneurial activity

Approfondimento su un campione di 70.000 imprese in due aree territoriali

economicamente vivaci

The hypothesis: strengthening and developing the business activity of

third-country nationals could have a positive effect on Italian SMEs.

Quantitative and qualitative analysis (focus groups) in order to identify the

most developed third-country national business/entrepreneurial models,

examine behavioural patterns, financial needs and relationships with Italian

banks.

Three types of business will be assessed:

female-run businesses,

so-called "developed" businesses

business communities

Further Research

Identifying new players in the financial inclusion process

Three areas of analysis:

New actors of financial innovation: mobile operators (mobile

payment) and payment system platforms

Relationship among migrants and insurance companies

Relationship among migrants and consumer credit

Identification of best practices

Setting of criteria to identify best practices in the field of

financial inclusion

• Overview of main national and European experiences

• In-depth analysis of the most significant experiences

• Capitalization of best practices

Education and information

Education • Operators

• Institutions

• Third sector operators

• Migrants Information

• Italian Parliament

• International Institutions and Organizations

• European Commission

-Training

-Territorial laboratories

-Migrant associations

-National and ethnic press

-Brochure (2 languages)

-Website (www.cespi.it)

-Annual reports and public events

-Periodic updates

Group of Experts

Analysis and discussion of the main outcomes of the research

Identifying areas of investigation and hypotheses of research to

steer the research work

Discussing the main policy implications and studying

proposals and system solution

Permanent forum involving stakeholder of migrants financial inclusion process

in order to identify new support and strengthening strategies and policies

Group of Experts

• Ministry of Interior - Pref. A. Malandrino (Direttore Centrale per le Politiche dell’Immigrazione e dell’Asilo)

• Ministry of Interior - Pref. A. Rosa (Direzione Centrale per le Politiche dell’Immigrazione e dell’Asilo)

• Ministry of Foreign Affairs– Amb. G. Magliano (Direttore Generale per la Mondializzazione e le Questioni

Globali)

• Ministry of Labour and Social Policies– Dott. N. Forlani (Direttore Generale Immigrazione)

• Ministry for International Cooperation and Integration– Pref. M. Morcone (Capo di Gabinetto del Ministro)

• Ministry of Economy and Finance – Dott. Carlo Monticelli (Capo della Direzione Rapporti Finanziari

Internazionali, Dipartimento del Tesoro)

• Bank of Italy– Dott. D. Gammaldi (Vice Capo ServizioSupervisione Mercati e Sistemi di Pagamento)

• Italian Banking Association – Dott. G. Durante (Direttore Centrale)

• BancoPosta – Dott. W. Pinci (Responsabile Sistemi di Pagamento)

• National Association of Insurance Companies - Dott. G. Carbonari (Direttore Forum ANIA-Consumatori)

• Union of Italian Chambers of Commerce – Dott. C. Gagliardi (Segretario Generale)

• CRIF – E. Lodi (Direttore Generale Credit Bureau Services )

First Year

Main results

Banked index for migrants

17

Number of current accounts owned immigrants: 1,782,426

National Banked Index for migrants: 61.2%

(banks + BancoPosta)

Number of current accounts for more than 5 years: 22%

“strong” ddefinition of banked migrant: ownership of a

bank account of resident adult immigrants

Elements of heterogeneity

Territorial

Nationality

Gender

Financial Profile

0%

20%

40%

60%

80%

Totale Nord Centro Sud

61.2%

66.9%

52.8%

20.9%

National North Center South

Banked Index

Territorial

Fonte: CeSPI

19

Elements of heterogeneity

Elements of heterogeneity

20

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Albania

Bangladesh

Cina

Ecuador

Egitto

Filippine

Ghana

India

Macedonia

Marocco

Moldova

Nigeria

Pakistan

Perù

Polonia

Romania

Senegal

Serbia Montenegro

Sri Lanka

Tunisia

Ucraina

MEDIA

57%

57%

56% 73%

83% 56%

64%

52%

56%

53%

51%

62%

58% 76%

66%

61%

65%

55%

59%

78%

33%

61% Nationality

Fonte: CeSPI

21

Women have a lower rate of bancarization: -8 percentage

points

Declining gender gap, in 2008 the gap was 10 percentage

points

Women show a higher level of savings and larger amounts

of remittances

Gender

Source: CeSPI

Elements of heterogeneity

Migrants: complex and segmented profiles

22

0 1 2 3

Conti di base per favorire l'inclus. fin.

Conto Corrente

Servizi di internet banking

Carta di debito prepagata

Carta di debito escluso prepagata

Carta di credito a saldo

Trasferimento di rimesse

Prodotti di accumulo risparmio

Custodia / amministrazione titoli

Credito al consumo - prestito personale

Aperture di credito in conto corrente

Prestiti per l'acquisto di immobili

Prodotti assicurativi

2010

2009

1 = Low

2 = Medium

3 = High

Growth of

"evolved“ products,

payment instruments

and savings

Use of financial products – comparison 2009-2010

Contraction in

credit products

(impact of the crisis

on the supply side)

Source: CeSPI

Credit Access

23

The informal channels are the main

means of access to credit.

The bank is the main intermediary

when he/she asks credit through

formal channels

The purchase of the house is an

integral part of the strategies of

integration of migrants (38% of

bank loans)

No evidence of widespread over-

indebtedness

Sources of access to

credit

%

Relatives / friends 52%

Banks 16%

Financial Institutions 6%

No profit organizations 3%

Mortgages

38%

Consumer credit 40%

Other loans 22%

Types of loans granted by banks

Migrants’ perception of banks

24

The bank is perceived mainly as a safe place for savings and a

necessary step for living in Italy.

It is advisable to invest in the bank's role as an advisor and point

of reference in migrants’ financial management

With regards to migrants’ expectations these concern mainly

favorable costs and access conditions (linguistic and cultural, times,

bureaucratic obstacles)

There is evidence of information asymmetries that lead to a vicious

circle in which demand and supply of suitable products do not

meet and understand

Migrants without a current account (38.8%)

25

Factors related to insufficient income confirm there is space for microfinance products

requirements are not an obstacles, confirming progress made on accessibility, cost

factors are significant

44% of respondents stated that they will open a current account in the next 2 years

Other; 2%

53%Source: CeSPI

Financial Inclusion– entrepreneurship 26

415,534 immigrant businesses (December 2011): 10% of regular

immigrant population

Women represent 27% of the total immigrant entrepreneurs

Financial weaknesses absence or limited availability of collateral requirements and

reduced credit history Informal credit as the main source of funding for the start-up Lack of a link between forms of support to the star-up

(microcredit, funds …) and ordinary credit

Structural weaknesses

Average size still small

Target market primarily local

Prevalence activities in the field of retail trade

A growing segment for banks

27

37,330 customers “small

business” are immigrant

4.2% of total immigrant

banks customers

Europe 46%

Latin America

4%

Asia 30%

Africa 20%

+25% compared to 2009

c/c small business – geographical

Africa 3,1%

Asia 5,6%

Latin America 1,9%

Europe 3,1%

Incidence of c/c small

business on total c/c

Possible ways for strengthening the

process of financial inclusion in Italy

28

Support processes of strengthening

29

How to reach those 40% of resident migrants not yet

bancarized?

Identify more flexible mechanisms and instruments of financial inclusion,

capable of responding to the requirements related to a first step of

integration, but at the same time able to ensure a process of growth in

financial maturity and in strengthening the bank-customer relationship.

Could Payment services act as a first tool of financial inclusion?

What is the role of microfinance?

30

Which model and what solutions to facilitate the emergence of flows

related to undocumented migrants?

How to promote a better control of the process of savings allocation?

(how to solve the information asymmetries?)

Importance of training of operators and development of staff

interpersonal skills

How to strengthen credit access for “new enterprises" and create

links between credit instruments to support the start of business

activities and traditional forms of credit?

Support processes of strengthening

Many thanks

Daniele Frigeri

daniele.frigeri@cespi.it

www.cespi.it