CRPE Policy Memo 68 – Access to finance for Roma entrepreneurs: Case studies and public policy proposals

Coperta Policy Memo 68 1 EN copyCRPE Policy Memo 68. 
Authors: Alexandra Toderita, Alexandru Damian, Bianca Toma. The Romanian Center for European Policies launches the policy memo Access to finance for Roma entrepreneurs: Case studies and public policy proposals, as part of the ‘‘Roma entrepreneurship in Romania. Research regarding the extension of a financial instrument to facilitate small Roma entreprises access to microcredit’’ project, financed by the Open Society Institute.

None of the successive national strategies regarding the Roma minority, nor any of those targeted to combat poverty, have yet relied on entrepreneurship as a tool for the development and socio-economic inclusion of the Roma population. This is despite the fact that supporting entrepreneurship among disadvantaged groups in poor communities can play a key role in their economic growth and development.

The fieldwork carried out as part of this project demonstrates that small Roma businesses, whether they are traditional or not, could be helped to stay on the market with adequate support tailored to their needs. In most cases, this support constitutes a mix of integrated financial education, grants, small loans and business advice. This would in turn enable them to sustain their families and even generate more jobs for the Roma community, as can be seen in the case of social enterprises.

This report is divided into two sections; the first, entitled ‘‘100 small Roma entrepreneurs: communities and professions’’, outlines profiles of various entrepreneurs from a selection of interviews conducted in over 30 different communities included in the survey.  These were done in the current socio-economic context and cover a comprehensive range of different typologies: from skilled artisans to entrepreneurs in more mainstream economic sectors practiced by the majority such as trade, services, agriculture and so on and so forth.

The second section, ‘‘ Financial inclusion of Roma through microcredit. Examples of good practice and public policy proposals’’ identifies concrete examples of microcredit schemes and financial inclusion for Roma entrepreneurs which are implemented in other Eastern European countries, analyses the arising opportunities in this area for Romania in its programming of European funds and thirdly, proposes several different development options of public policy in light of data obtained in the field.

The examples of Kiut, Hungary (considered good practice at EU level) and the Polish pilot-program in particular which supports social enterprises through financial means, all show that a microcredit program for entrepreneurs in economically-disadvantaged groups and social economy enterprises that is well-tailored to its target group – with measures such as the omission of bank charges, reduced costs and subsidized interest rates- would be worth introducing in Romania soon.

This would need to be channeled to beneficiaries through organizations (usually NGOs) who know the communities and can identify Roma entrepreneurs with market potential. They could then help them, through financial literacy and business training, to implement their business plans and repay their microloans.

The contents of this report do not necessarily represent the official position of the donor. Entire responsibility lies with the Romanian Center for European Policies and the authors of the report for the accuracy and coherence of the presented information.