Asset building: moving beyond as a tool to combat poverty in Europe Brussels, December 2nd, 2010

1. Asset building: moving beyond as a tool to combat poverty in Europe Brussels, December 2nd, 2010

2. Réseau Financement Alternatif Réseau Financement Alternatif (RFA) is a citizens movement for financial responsibility and solidarity that started in 1987 in French-speaking Belgium. Today, the RFA carries out public awareness campaigns urging for a more responsible use of money and develops tools to encourage its members to invest responsibly and for government to take more action to promote ethical and social finance. RFA carries out studies on ethical and solidarity-based finance. Its main research areas are socially responsible investment and financial inclusion, with a focus on how to increase access to basic banking services and promote socially responsible credit. Moreover, RFA’s research is committed to support and increase responsibility and solidarity in the financial sector.

3. Réseau Financement Alternatif Recent work has included: A mutual learning project on financial inclusion in Europe, which provided participants the opportunity to exchange questions, needs, good practices and interests about financial inclusion (Mutual Learning on financial inclusion, www.fininc.eu, 2008-2009) A study on the nature and extent of financial exclusion in Europe along with the most effective policy measures to prevent such exclusion and how to promote access to financial services (EU Tender, Financial Exclusion, Financial services provision and prevention of financial exclusion, www.fininc.eu, 2007-2008)

4. Réseau Financement Alternatif RFA is a member of: • Indigo, European Asset-building Innovation Network - www.indigo-asset-building.eu • EMN, European Microfinance Network - www.european-microfinance.org • EFIN, European Financial Inclusion Network - www.fininc.eu • INAISE, International Association of Investors in the Social Economy - www.inaise.org • ECDN, European Consumer Debt Network - www.asb-gmbh.at

5. Asset Building What is Asset Building? The Indigo Network believes that low-income working people, when given the right incentives and support, will save for long-term goals. Building assets has profound effects on individuals and families and their ability to break the poverty cycle. It enables them to plan for the future, avoid risky behavior, and weather unexpected financial storms. Ultimately, it can make home ownership and entrepreneurial job creation a genuine possibility. As such, asset building represents a long-term, innovative anti-poverty strategy that pushes the limits on what is possible.

6. Asset Building The emphasis in asset building is on savings as opposed to relying solely on credit and loans as a strategy to help people out of poverty.

7. Pilot experiments on micro-savings implemented in four European countries Four pilot experiments will be implemented simultaneously over a twelve month period in Belgium, France, Hungary and the United Kingdom to test innovative programs promoting savings among targeted vulnerable groups. These social experiments will test different financial education and asset building methods in order to identify interventions that are effective at encouraging targeted groups to save.

8. Pilot experiments on micro-savings implemented in four European countries These micro-savings projects might have two dimensions: National level: in Belgium, the UK, Hungary and France, where it exists on-going pilote projects; A potential EU level: if the project application for "Social innovation and mutual learning on Micro-savings in Europe" is selected by the Commission (decision is expected in March 2011).

9. Belgium Targeted beneficiaries are low income people, with a potential small but real savings capacity. To recruit the participants, RFA will collaborate with multiple stakeholders which are in contact with the target groups: public social services organizations, adapted enterprises, debt mediation process and private associations, social workers and social economy businesses. Size : +/- 150 participants. These 150 people will be divided into 10 to 15 savings groups, based on the geographical area they belong to. .

10. Belgium The project provides two complementary interventions to the participants. Financial incentive matching program Program participants are invited to transfer monthly the amount they wish to save on the savings groups account. For each euro saved by the program beneficiary, a 50 cent bonus is provided by RFA, with a ceiling of 10€ monthly bonus. Beneficiaries saving more than 20€ a month will receive the maximum 10€ financial incentive. Training modules program 4 modules will be organised in order to provide keys to participants to better understand the financial system, provide them with practical ideas to help them manage their budget and enhance experience sharing among participants to allow creating cohesion among them.

11. France Project partner = Agence Nouvelle des Solidarités Actives This non-profit-making association of social engineering and innovation aims at reducing poverty and has the general objective to promote the generalisation of the most efficient social programs. The association supports local authorities for the concrete development of social policies.Moreover, most of them are going to join the labor market quickly.

12. France The target group in the French pilot program will be apprentices in CFA (+/-250 p.). They have the advantage of being young and integrated in a teaching program. They also work on a part-time basis and consequently have a wage to manage (even if the latter might be rather low). Moreover, most of them are going to join the labor market quickly. Within the framework of the experimentation, the training program would be integrated into the mandatory teaching program of the apprentices. It will provide them with the necessary knowledge and skills to strengthen their ability to manage their budget as well as their relationships with the banking environment to fulfill their personal projects.

13. France The educational programs will focus on the knowledge and the autonomy of the apprentices regarding two major subjects: Budget management How to build your budget, identify your financial resources and monthly expenses, exceptional costs, assess your disposable income, make decisions regarding your purchases and the allocation of your incomes, in other words to arbitrate between savings and credit and to have safety margins, etc. Relationship with the banking environment What role does my bank play, what is the role of my personal banking officer, which are the different products and their characteristics, what monitoring and attention should I have, etc.

14. Hungary Project partner = Autonomia Foundation Autonómia Foundation is an independent private foundation founded in 1990. Its mission has been to contribute to the emergence and support of the non-profit sector, through diverse programs, with a special focus on the Roma community. This has been achieved through support to local civil initiatives, which mobilize also the resources of the community.

15. Hungary It will test and compare the relative effectiveness of 3 different financial education and asset building methods: CAF Method Members of a community are guided and mentored in financial management and form a cooperative where money is pooled from each member of the group and then loaned out to provide capital as is seen fit for various business or asset building measures. No money is transferred in from outside of the group (24-36 pers.).

16. Hungary Bank of Chance Revitalization and operation of 3 groups set up in 2009. New loan products will be tested and mentors will assist the operation. Financial education is integral part of the model. Training courses will be organized on monthly basis. Besides the asset building loan, a ‘crisis loan’ will be designed to avoid the overdebdtness and fight against the illegal money-lenders (18-36 pers.)

17. Hungary Housing Program A loan is granted to improve the recipient’s largest asset – their house. A direct way to improve living conditions among the poor is to address their sub-standard housing conditions. This method aims to repair salvageable houses to provide an adequate living space and serve as an asset, not a hindrance to the occupant and the community. Each recipient must “pre-save” a predetermined amount of money to demonstrate their motivation and qualify for the loan. This is coupled with direct financial education courses to instill good habits and teach the principle of saving. (45 pers.).

18. UK Project partner = The Financial Inclusion Centre The Financial Inclusion Centre (FIC) is an independent, not-for-profit think-tank. Its aims are to promote greater financial inclusion and provision so that consumers' core financial needs are met and to promote fair and inclusive, efficient and competitive, well-governed and accountable, properly regulated financial markets.

19. UK The overall aim is to identify interventions that are effective at encouraging consumers to save. However, given chronic overindebtedness in the UK, this pilot project will test specifically whether interventions are effective at helping consumers with a history of debt to start saving. Self-help/ information/ financial education tools Selected participants will be provided with information about approved financial capability tools which they can use to learn about money and take control of their finances. The financial education tools will be delivered using published material and web based tools.

20. UK Direct support/ face-to-face interventions Provide direct support to participants using trained community money advisers or ‘money mentors’. Money advisers/ financial counselors from established not-for-profit advice service providers will provide one-to-one financial counseling to participants in the pilot study, teach financial capability skills outlined below and provide ongoing support. Financial incentives Investigate whether financial incentives are effective at persuading participants to defer gratification to save for a future event. 120 participants will be offered a financial incentive – each ￡1 saved will be matched with 50 pence on completion of a one year savings program. The maximum monthly amount that will be matched will be ￡20 per month or ￡240 per annum

21. EU dimension if the EU proposal is selected in 2011 Pilot experiments' evaluation The evaluation of the 4 social innovation pilot programs will be carried out by a dedicated external evaluator (CREDOC) in collaboration with the national coordination partner and RFA. The objective is to measure the impact of the experimentation on savings behaviours and budgetary skills in each country (France, Belgium, UK and Hungary), taking into account the national background and specific objectives of each project. The evaluation will lead to a compared analysis of the effects of the different projects, depending on the public targeted, the tools used… The learnings of the evaluation will also help to improve mutual knowledge and public awareness on the issue.

22. EU dimension if the EU proposal is selected in 2011 Mutual Learning events & stakeholders networking From the very start, a stakeholder’s network including the 29 project partners but also other stakeholders will be built and activated. Members of the network will be provided with information about the project as it runs and will be invited to get involved in the mutual learning process by attending the mutual learning events organized within the project and sharing interest and information about similar pilot experiments they are running. Dissemination of the project results In addition to the workshops and plenary session conference, dissemination of the project findings will be ensured by the production of various multilingual products (EN, FR and HU) designed for governments, key actors and the public at large.