Autonomia Foundation Hungary autonomia.hu

1. AutonomiaFoundationHungarywww.autonomia.hu Main activities Grant making Local (regional and community) development Research Programs Financial Development and Education Autonomia’s target group The Roma living in countryside

2. Autonomia’s target group is the Roma Identification of the Roma is not an easy. Who is the Roma? Self-identification / Microcensus (in 2001) / classification of the neighborhood. (Size of the Roma population is between 5 and 10%.) Though our main target group is Roma we involve non-Roma too, (let it be other non-Roma in need or pro-Roma NGOs, workers of local governments and institutions) Exclusively Roma projects cannot improve the cooperation between the Roma and non-Roma but maintain the segregation. Therefore we design our projects for socially excluded people in depressed microregions and settlements. This very simple geographic definition usually is appropriate because the majority of the Roma live in these settlements. We target the local, vulnerable, socially excluded people (with small differences regarding the aim of the given program).

3. There are many good, scientific and substantial studies on the characteristics of the Roma in Hungary. But understanding their situation is not so easy… Besides of the obvious facts: Exclusion from the labor market; Lack of regular and legal wage (from registered job); Undereducation; Lack of job opportunities; Segregation, discrimination; Overconsumption; Overdebtness, We consider that there are not any specific characteristic of the Roma in Hungary. Every problem of the Roma exists in the whole Hungarian society as well. The difference is the concentration and seriousness of the problems. The Roma community is not uniform. There are three groups of the Roma with different culture and socio-economic background.

4. Obstacles of microfinance, group-lending 1. In the developed world, the greatest problem is undoing the ravages of the welfare system. Over and over clones of Grameen Bank have run into the same problem: would be recipients quickly calculate the amount of the welfare cheques and insurance coverage they would loose by becoming self-employed and conclude that there is nothing to be gained by it.(…) In industrialized countries, ’informal businesses’ are seen as illegal ’street hustles’. (Banker to The Poor, The Story of the Grameen Bank, Muhammad Yunus with Alan Jolis, Aurum Press, 2003) 2. The cost of legality: These businesses cannot make enough income to cover the tax and rates. If they turn their economical activities into legal it will have deficit.

5. Lack of trust 1. In Hungary, we had a boom of loan market: Consumption loans, housing loans and loans for cars were promoted in the media. Commercial banks had generous subsidies from the state for housing loans. The majority of the Hungarian society enjoyed this situation without responsibility. The result is the overconsumption is the overdebtness. 2. Foreign currency denominated loans were very popular because of the attractive monthly installments but clients did not care about the “small letter parts”. Caused by the financial crisis and significant changes in exchange rates they face to the higher installments and cannot pay the loans back. 3. Before the financial crisis, numerous financial scandals, swindles, cheats have happened in Hungary. The whole financial sector lost its credibility and clients become suspicious and cinical. 4. As a reaction, some of the debtors just not to pay the bank’s money back without shame. So getting loans become difficult as banks are careful. 5. People of local communities do not trust in each other. Nobody wants to take real financial responsibility. Their strategy is very simple: Catch the money and run.

6. Aims and challenges for Autonomia not only providing a new loan product because it would be another loan or oil to the fire… designing new type programs for financial education and consolidation of households (with community development, financial education, loan products) adopting and piloting group-lending methodology. Our strategy To help people to set up long term asset goals Creating or empowering communities to make up for missing (positive) identity, self-respect and trust To prepare reasonable financial education curriculum and methodology: Not to teach but explore the common knowledge.

7. Thankyouforyourattention! Tibor Beres beres.tibor@autonomia.hu