Hungarian implementing partner of SIMS program (Social innovation and mutual learning)

Hungarian implementing partner of SIMS program (Social innovation and mutual learning)
Designing, piloting and evaluation of innovative (savings based) financial development methods in four EU countries.
Social Purpose: 
Financial inclusion as part of the fight against social exclusion • An increasing number of households have excessive debt In Europe, the general finding for some years is that there is an increase in household debt (with the notable exception of Germany). Although loans, by stimulating spending, can be a lever for growth that is beneficial from an economic point of view, repaying them can be a problem if unexpected financial difficulties arise. As the current economic and financial crisis has resulted in a fall in income for many European households , the proportion of individuals faced with the inability to repay their debts has increased. So, in 2010, the proportion of households in the 27 European Union member states (EU 27) unable to repay their debts, rent or bills on time is estimated at 11.6% against 9.9% in 2007 . Among the macroeconomic factors economists usually cite to explain the increase in over-indebtedness are the rise in consumer credit (deregulation of the lending market in the eighties in Western Europe), rising unemployment since the 2008 financial crisis (10.5% in 2012 in the EU 27 against 7.1% in 2008), the switch to the euro, and rising house prices. "Life accidents" can also lead to an inability to pay one's debts: job loss or a forced reduction in working hours, divorce or even a health problem. The results of international surveys conducted as part of the Eurofound 2010 project Managing household debt show that the risk of incurring excessive debt increases for people who live alone or with small children, who are jobless or have low incomes, for individuals in poor health (chronic illness), and for youngsters and migrants. Over-indebtedness, financial exclusion, poverty and social exclusion are closely interlinked phenomena. Although economic insecurity increases the risk of excessive debt, conversely, the fact of being unable to pay may also – and this is increasingly the case - be at the root of poverty situations. Banking and financial exclusion A group of experts has worked out the following definition within the framework of a project funded by the European Commission : "Financial exclusion refers to a process whereby people encounter difficulties accessing and/or using financial services and products in the mainstream market that are appropriate to their needs and enable them to lead a normal social life in the society in which they belong." This intentionally broad definition is designed to take account of all difficulties that may result in situations of exclusion from the financial system. Banking and financial exclusion denotes restrictions both on access to and on the use of products and services allowing immediate payment of expenses (means of payment) and spreading them over time (using loans for example) . • A quarter of European households at risk of social exclusion In 2011, it is estimated that nearly a quarter of the population in the European Union is at risk of poverty or social exclusion . This proportion is increasing in almost all countries, especially in Hungary, and to a lesser extent in France and Belgium.
Social Impact: 
Yes, impact of the project has been evaluated by independent evaluator (Crédoc, Paris). The Evaluation Report can be sent if it is necessary. A common assessment methodology • The aim of the SIMS project assessment was to ask the following questions: • Does the programme meet the needs and expectations of the experiment's target group? • What is the specific effect of the programme on the opinion and behaviour of the beneficiaries in the short, medium and long term? • What lessons can be learned from the experiment regarding implementation conditions: can one identify factors for success and any obstacles to overcome? To answer these questions, the assessment relied on quantitative and qualitative methods: one inquiry per questionnaire, implementation and follow-up of a dashboard and in-depth qualitative interviews. Data was gathered from all parties involved: the project leaders, the mobilized partners and the beneficiaries. In order to have comparable data, the assessment was carried out in the same way and over the same timeframe in all three pilot countries.
Innovative Character: 
Project designed tested and compared three financial development methods for the low-income, unbankable people in Hungary. The aims: enable particularly underprivileged groups to have access to financial education and the possibility of saving and borrowing, to break out of the poverty cycle created by the inability to plan one's expenditure. It was more particularly a matter of preventing people resorting to local lenders operating outside the law who offer very high rates, which tends to worsen the financial position of borrowers. The programme also set out to promote solidarity within the community. Lastly, it was a matter of supporting the beneficiaries in improving their housing conditions and in better managing the household's energy resources. Key initiatives: 3 types of method were tested: - The CAF method (Comunidades Autofinanciadas): self-funded communities. The members of the community form a cooperative in which the savings are pooled. The resulting capital is lent to a member of the group. The participants draw up the cooperative's rules amongst themselves (lending terms, interest rate, penalties, etc.). No outside funds are required. Financial education is supposed to be mutually acquired through participation in the groups and interaction between the participants. - The Bank of Chance programme: the participants form small groups of ten or so people who meet every month. An account is opened in a bank for each participant, who has to pay his or her savings into it at regular intervals before being entitled to apply to the bank for a loan at a rate of around 12%. A system of rotations is organized; only one member at a time can obtain a loan and must repay it before the next member can get one. In parallel the group's members benefit from training modules on financial education and energy efficiency issues. - The IDA method (Individual Development Account): each participant opens an account and undertakes to pay amounts of savings into it on a regular basis. The total amount saved is doubled if they have made at least 8 payments into their savings account during the year. The money can be used to fund home improvement projects. The group's members also benefit from training modules on financial education and energy efficiency issues. Target group: the programme was implemented in villages with especially disadvantaged groups who are discriminated against – in particular villages having a high proportion of Romas. In total this programme concerned 239 people. Resources employed: the programme was implemented locally thanks to 9 resource correspondents who live in the villages. The brief of these local "mentors", who were trained and paid by the Autonómia foundation, was to recruit participants, monitor them and organize monthly encounters or training modules. The NOBA bank and the microcredit organization Mikrohitel also partnered the Bank of Chance programme. Lastly, trainers were mobilized to run training modules on financial education and energy efficiency issues.
Scaling Trajectory: