The development of Microcredit in Italy

Historically, the middle classes are the driving force of the development of our country through millions of small and medium enterprises and professional activities which have brought economic development, employment and wealth. However, the still unresolved crisis of the last decade has heavily hit the middle class.

Indeed, whilst in 2007 middle classes accounted for 57% households, in 2014 they crumbled to 38%: three million families have reduced their standards of living, producing a domino effect on saving, consumption and unemployment. These effects are still visible today and are the main reason beyond the interventions of public and private institutions to support programs oriented to the development of an entrepreneurial orientation among population, in particular young people.

The analysis of the data40 shows that the share of indebted households has reduced by nearly 4 points from 2008 to 2012 and 12 points among young families (age less than 35 years) and similarly for the third income quartile. Although consumer credit supported consumption in the first phase, it declined during 2010-2012 years mostly because of the credit crunch following the sovereign debt crisis. In some cases, heavily indebted families finished bankrupt affecting furtherly the downward spiral of the credit system.

A particular figure is the proportion of households with a mortgage. This has not changed between 2008 and 2012, but, due to the selectivity of the intermediaries, it has declined among low-income families, while it increased among the richer quartile. During 2014 signs of market recovery have emerged in household credit, particularly mortgages towards young families.

In the 2014-2015 period, the share of vulnerable households would vary slightly, in a scenario of a continuity of low interest rates and a recovery of the growth of nominal income.