Way out Program: Social Self Employment and Microcredit Program in Hungary

A - DESCRIPTION OF THE GOOD PRACTICE

A1 - Title in original language
KIÚT Program: Szociális mikrohitelezés és önfoglalkoztatás lehetősége Magyarországon

A2 - Title in English
Way out Program: Social Self Employment and Microcredit Program in Hungary

A3 - Location of GP (national)
Hungary

A4 - Location of GP (regional)
Hungary (It was a national program)

A5 - Economic field of activity
S Other service activities

A6 - Ultimate purpose of GP
To improve social cohesion/inclusion
To provide educational opportunities
To create or conserve employment

A7 - Spatial scale National

A8a - Start date
June 2010

A8b - Anticipated end date (if applicable)
September 2012

A9 - Short description of the GP
Promoting social mobility and Roma integration

A10 - Key words relating to the GP
to become self-employed
microcredit
personal development consulting
optimizing social and financial assets
intensive permanent fieldwork

A11 - Objectives of the GP
The program aims to encourage people living in extreme poverty - especially Roma people - with social support, financial services and providing information to become self-employed thus will be able to improve their social status and to create a livelihood for themselves and their families. It focuses on creation of sustainable enterprises which are related to the normal circulation of the local economy.

A12 - Activities that have taken place

elaboration of the model and basis of the lending activity
fieldwork, establishment of groups, selection of target group
optimizing social and financial assets
loan disbursements
personal counseling, support to become entrepreneur

A13 - Achievements of the GP

groups which received loans were established in 38 settlements
total amount of 70,5 million HUF (235 000 EUR) as loan was distributed for 138 clients
60% of the debtor who received credit in the 2nd phase of the credit disbursement pursue business in the formal sector after the 1st year
repayment of credit will be in total around 55-60% despite the fact that it is a pilot project and the economic environment is less favourable year by year

B - IMPACT ON SOCIETY AND ECONOMY

B1 - How has the GP impacted on the following?

B1a - Legal/financial exclusion
Very positive impacts
Any other comments?
Credit was available for people who live in worst condition which was excluded for them so far

B1b - Creation or conservation of local employment
Very positive impacts
Any other comments?
Some of the target group became entrepreneur and those who were not able to continue their activities, implemented them as employee.

B1c - Adaptation to new realities
Impacts not known
Any other comments?

B1d - Cross sectoral working
Very positive impacts
Any other comments?
cooperation between social and financial sector based on a new model

B1e - Enablement of social enterpreneurship
Very positive impacts
Any other comments?
Involvement of the most disadvantaged group who live in extreme poverty was implemented and these people became entrepreneur as self-employed.

B1f - Amenities for local people
Very positive impacts
Any other comments?
These businesses mainly responded to the local needs of the citizens e.g. cucumber cultivation

B1g - Educational opportunities
Very positive impacts
Any other comments?
Counselling for target group which took part in the program as well as lending practices and consulting trainings for the program implementers were carried out.

B1h - Crisis response
Very positive impacts
Any other comments?
The program was implemented mainly in the most disadvantaged Hungarian areas like Borsod-Abaúj-Zemplén county, Szabolcs-Szatmár-Bereg county, Baranya county, etc.

B1i - Local financial environment for social enterpreneurs
Very positive impacts
Any other comments?
The traditional bank services weren't available for this target group therefore a special portfolio was developed.

B1j - Local policy environment for social enterpreneurs
Impacts not known
Any other comments?
The program is no longer supported in Hungary.

B1k - National financial environment for social enterpreneurs
Impacts not known
Any other comments?
The program is no longer supported in Hungary.

B1l - National policy environment for social enterpreneurs
Impacts not known
Any other comments?

C - PARTNERSHIPS & GOVERNANCE

C1 - Is the governance of this GP fully inclusive?
Beneficiaries are highly involved in governance
Comments and learning points
5 persons who are eligibly for credit had to organise a group to develop and implement the business ideas. This group was the carrier of the idea.

C2 - How influential has this GP been on local or national decision makers?
No influence achieved
Comments and learning points
Despite of the achieved results the policy makers don't support the program. The credit disbursement is continued by privat resources without any state aids

C3 - How much partnership work has been involved?
A great deal of cross sectoral partnership working
Comments and learning points
Several large companies, banks and the state are among the sponsors. The program has great reputation in Brussels also .

D - PR & TRANSFERABILITY

D1 - Please describe how the GP communicated its experience and success to the public
website, continuous press&media coverage, introduction in Brussels

D2 - Please describe how the GP communicated with local or national decision makers?
The program was financed mainly by EU but also the Hungarian state took part in it therefore the consultations were continuouse.

D3 - Are there any elements of this project that you think would transfer particularly well to other contexts?

microcredit on the base of the Grameen model which built on the cooperation and trust as sequential credit
furthermore the social element and the microcredit were linked in the personal counselling model (fieldwork)

E - RESOURCES AND SUSTAINABILITY

E1a - Total annual income of GP 2011/12
590 million HUF (cc. 2 million EUR)

E1b - How is this made up?
EU and national financing during the project

E1c - Details of human resources program
management: 5 persons
fieldworkers: 15-22 persons

E1d - Details of technology
microcredit product

E1e - Details of financial investment for start-up/early stage
central office and the vehicles for fieldwork

E1f - Details of external support
support of the partners (primarly technological support)

E2 - If public funding were withdrawn, could the GP continue to exist?
Yes, as the reality shows it is continued by private capital

F - EXECUTIVE BODY AND CONTACT INFORMATION

F1 - Who set up the GP?
Individual or group of individuals

F2 - Who runs the GP?
Not-for-profit organisation

F3 - Short description/comments

F4 - Contact
Csilla Sárkány
Way out Program Microcredit Mediation Nonprofit Corporation/Kiútprogram Mikrohitel Közvetítő Közhasznú Nonprofit Részvénytársaság
1056 Budapest, Fővám tér 2-3
Hungary
Telephone +36/30/512 9752
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.kiutprogram.hu/index.php/en/
Any other contact people
Dr Schütt Margit