Entrepreneurship
Theme: Social Enterprise
Cross-cutting themes covered: Tailored financial solutions
Name of project: PAN – Progetto Asili Nido (Nursery schools project)
City: Milan
What is it? PAN is a not-for-profit consortium that provides finance for organisations that set up children’s nursery schools, based on the social enterprise business model. PAN also works actively to support the families in receipt of these childcare services.
Who is it? PAN is a consortium established and supported by the Banca Intesa, one of the most important mainstream banks in Italy, and the main Italian social enterprise networks; Compagnia delle Opere, Consorzio Gino Mattarelli, and Legacoop.
Where is it? The project operates in deprived urban areas across Italy.
Who funds it? Banca Intesa provided the initial budget of €450,000 in the first stage and around €1 million in the second stage. However, PAN is designed to be a financially sustainable initiative. The money provided by Banca Intesa forms a ‘rotating fund’ that finances a range of childcare services.
How does it work? Tailored financial tools: In Italy, the lack of tailored financial tools is one of the main barriers to the growth and development of the social enterprise sector. PAN has addressed this barrier by setting up a partnership between financial institutions (such as Banca Intesa) and social enterprise networks. With the support of the financial institutions, PAN provides tailored financial tools, in the form of loans, for social entrepreneurs who want to set up nursery schools.
The bank loan criteria are defined by Banca Intesa, in partnership with the third sector representatives. As a result of this partnership working, the loans are tailored to the social enterprise business model, taking into account the ‘social profit’ of the proposed schemes as well as their financial viability. Moreover, to increase the social entrepreneurs’ chances in accessing these loans, PAN also supports them with business planning activities.
Anything else? Support for families living in deprived areas: PAN also offers support to families that decide to enrol their children in a ‘PAN’ nursery school. PAN allows them to obtain a preferential bank loan for the payment of the fees, and facilitates the return to work for the new parents.
What are the results? The partnership working between the third sector and financial institutions, which is still rare in Italy, has been particularly successful in providing tailored financial solutions for social entrepreneurs.
PAN targets both social enterprises and the families who use their services. This combined focus on the organisational element and the beneficiaries has been both highly innovative and successful.
Is the model transferable ? One of the lessons that can be transferred to other localities and regions is the promotion of partnership working between financial institutions and not-for-profit organisations, in order to set up tailored financial tools for the social enterprise sector. This has been crucial in raising awareness among financiers about ‘social returns on investment’ and promoting the incorporation of these into their investment decisions. The business planning support offered by PAN to social entrepreneurs, which helps them to access credit for start-up ventures, is also transferable to other areas.
Building on local competitive advantages? PAN was able to build upon the long-established social enterprise representative networks, which acted as mediators between the sector, public authorities and the financial system. This enabled real dialogue and co-operation to take place throughout the development phase of the initiative. Moreover, the co-operation and partnership with Banca Intesa, vital in providing the loan finance for the PAN project, was a real competitive advantage on which the project was able to build.
What are the barriers to transferability? Lack of a partnership with a bank would constitute a significant barrier to transferability.
