Petra edina reszketo twists and turns
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Transcript of Petra edina reszketo twists and turns
Twists and turns – Main lessons How to provide an option to a real way out of poverty?
Petra Edina Reszkető
Budapest Institute for Policy Analysis
Brussels, June 2013 1
Background informationSubjects of our interestMain lessons and CEE-specific recommendationsIssues to discuss
Content
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KIÚT Microcredit Programme
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Sponsors The Polgár FoundationDG REG Pilot Project Pan-European Coordination of Roma Integration Methods - Roma Inclusion (co-financing)http://www.kiutprogram.hu
Timing January 2010 – June 2012
Main goals Enabling people leaving in deep poverty to become self-employedPromoting social mobility and integration of people in disadvantaged areas (explicitly, but not exclusively Roma)
Tools Group-based, unsecured micro loans (Grameen model)
Support services: business development and administration services
Active community work and daily field work (task of group mentors: community meetings, family visits, group meetings, business planning, training)
Perfomance of the programme
Screening: 202 settlements, 900 persons
Cliental: 44 settlements, 44 loan groups, 138 clients, EUR 1,825 average loan/ client
Monitoring and evaluation
WB survey – monitoring database
BI ongoing evaluation (esp, mid-term changes in targeting)3
Lives in a small settlement in North HungaryIs male, 36 years old, within a household of 4.5 peopleHas a monthly household revenue of HUF 68.250 (ca. EUR 225) Has no secondary or higher educationIs satisfied with his/her life though unemployed for long term prior to the programmeBelieves that he can do something to improve his lifeDoes not think of himself as being a ‘risk taker’Has access to sewerage inside the homeThe nearest bank branch is 18 minutes awayThe nearest employment office is 32 minutes awayRuns a retail business, or manages animal husbandry, or cultivates crops
Source: WB survey, 2011-12
The representative client ...
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József
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Not everyone, get the targeting right• Carefully assess entrepreneurial skills (self-confidence, risk-
propensity, endurance, creativity, diligence – Shane-Venkataraman 2000, Taylor 1999, Shane 2003, Kopasz 2005)
• Test commitment to his/her own „business dream”• Check credit history & last resorts (family support,
accumulated savings)• Expand knowledge on local markets, supply networks
Shift to more „upmarket” clients and/or locations with access to more market, turning away from the ‘poorest of the poor’
Provide ongoing training and information sharing – even after the disbursement of the loan
Lesson 1: Born-to-be-entrepreneur
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Ildikó
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Necessity of local presence - „the impossible checklist”• Social empathy• Basic and practical financial/ business know-how• Information broker• Interest representation (when dealing with local and national
agencies and bureaucracies) • Leveraging group pressure• In sum: „mother and sister” at the same time
... plus, costly and time-consuming exercise
Freeride on existing networks of local mentors/ community workers if you can
Cooperate with government / NGO stakeholders active in the same districts / settlements
Lesson 2: Ideal mentor / community worker
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Gábor
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With the business environment • Information gaps• Extremely high administrative burden compared to old MSs,
developing countries• Discrimination (entering public offices!)
With the public policy context • Social transfers (strong disincentives, high opportunity costs)• Taxation (competitive disadvantage on legalising incomes)
Lobby for business deregulation and simplification with special focus on self-employed, primary producers. Hardly anyone else will do that for your clients!
Provide a „welfare bridge” (cash transfer to facilitate initial phase, HU: VVT)
Lesson 3: External coherence
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Highly volatile local demand• Dependence on incomes from seasonal/ temporary work,
public work programmesExtremely limited local purchasing power
Ease access to regional business networks, markets Find a local hero – capitalise on his/her networks Cooperate with (central/ regional) development agencies –
crucial linkages to projects: • Local infrastructure• Mobility due to improved public transport services • Geographically targeted capacity-building (esp. PES,
social services, and the administrative staff of municipalities)
Lesson 4: Local market w/o integration
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• Cash is necessary, but not sufficient How to channel complex programmes into mainstream EU
structural funds?
• Isolated interventions are costly and not sustainable How to encourage and enforce efficient cooperations –
G2G, G2C, C2C? How to harmonise development efforst, geographical
targeting of various operative programmes?
• Political rationality is hard to overcome How to commit national/ local politicians hunting for the
vote of the (often racist) median voter to the issue of Roma inclusion?
Issues to discuss
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Autonómia – Autonómia Alapítvány 2008. Mikrohitelezési tapasztalatok. Autonómia Alapítvány, Mikrohitel Rt. Kézirat.
BI 2010. Adminisztratív terhek Magyarországon – szektorális és vállalat-méret szerinti specifikus elemzés. Budapest Szakpolitikai Elemző Intézet.
BI 2011. Background material for an EU Roma strategy framework, Hungary. Budapest Szakpolitikai Elemző Intézet. Mimeo.
BI 2013. Impact assessment of SME-development measures within the Economic Development Operative Programme, Budapest Institute, mimeo.
Kopasz Marianna (2005): Történeti-kulturális és társadalmi tényezők szerepe a vállalkozói potenciál területi különbségeinek alakulásában Magyarországon. PhD értekezés, Corvinus Egyetem.
Lengyel György (2008): A vállalkozói hajlandóság hatása a vállalkozásra és a jólétre / A Magyar Háztartás Panel néhány tanulsága (1992–2007). In Kolosi T. – Tóth I. Gy. (szerk.): Társadalmi riport, 2008. TÁRKI, Budapest, 429–450.
Shane, Scott Andrew and Venkataraman, S. (2000): The Promise of Entrepreneurship as a Field of Research. The Academy of Management Review Vol. 25, No. 1 (Jan., 2000), pp. 217-226
Shane, Scott Andrew (2003): A general theory of entrepreneurship: the individual-opportunity nexus. Edward Elgar, Cheltenham, UK.
Szalai Júlia 2004/ 2005. A jóléti fogda I. és II., Esély, 2004/6; Esély 2005/1.Taylor, Mark P. (1999). “Survival of the Fittest? An Analysis of Self-Employment Duration in
Britain,” Economic Journal, Vol. 109, No. 454, pp. C140-C155.
Disclaimer: Source of the portraits is the website of the KIÚTProgramm. They are only for illustration. The characters are fictitious ones, though inspired by real-life persons, progamme clients.
References and disclaimers
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