Italy’s first fully digital, cloud-based bank finances small businesses in the Mezzogiorno – particularly those with a focus on climate action

Roberto Stasi, a loan officer at the European Investment Bank, was writing a report from his office one morning in Luxembourg when he got a call from an entrepreneur looking for a loan from the EU bank to finance digital banking services for small businesses.

“It would be great if the companies that got the financing were in the Mezzogiorno,” Stasi replied. “This is where our help is needed most.”

The Mezzogiorno is the Italian name for the country’s south, including the islands of Sicily and Sardinia. Stasi was born in the south, in a region called Basilicata. Basilicata has a rich cuisine, ancient towns, amazing beaches and national parks, but it is also one of the poorest areas in the country.

The entrepreneur on the other end of the phone call was Amiran Tsintsadze, a Georgian who has lived in Rome and Milan since he was a child.  He is head of digital lending and product management at illimity, Italy’s first fully digital and cloud-based bank. And the conversation led to EU financing that has been a big push forward for illimity.

“The European Investment Bank has been a catalyst for our funding,” says Tsintsadze.

Digital bank employs illimiters without limits

Nearly 900 professionals – so called “illimiters”, 45% of whom are women – work on loans to companies with ambitious growth projects or to firms that are in difficulty, but are determined to keep going.

Founded in 2019 and led by Corrado Passera, a former Minister of Economic Development, illimity has grown fast and become an incubator of ground-breaking initiatives like b-ilty, Italy’s first online lending programme for small businesses.

“We wanted to overcome the constraints of traditional corporate banks and help solve some of the day-to-day hurdles that small entrepreneurs currently face," says Passera.

The €100 million loan from the European Investment Bank signed with illimity in April will enable b-ilty to invest that amount in small businesses based in the Mezzogiorno and in companies that help fight climate change.

It’s the second time the innovative company came to the EU bank for financing. In 2021 Stasi and Tsintsadze worked on a deal proving over €1 billion for liquidity needs of Italian small businesses under a programme designed to counter the economic impact of COVID-19.

>@EIB

Rome, June 2023 - Roberto Stasi (EIB) and Amiran Tsintsadze (Illimity) in a panel discussion at the conference on “Sustainable finance and green economy”, organised by the EIB.

Digital banking comes to Italian corporate banks

While Italian retail banks embraced digitalization some time ago, corporate banks are only now coming to terms with digital.

Launched in February 2022, b-ilty’s digital banking platform includes a whole range of services for small businesses:

  • Account opening
  • Streamlined loan applications
  • Simplified customer signing processes
  • Efficient cash account management
  • Access to essential working capital facilities
  • Seamless accounting and reporting.

Companies have a comprehensive view of all their assets and can access their financial metrics in a matter of seconds.

“Small businesses are able to focus on important business-critical tasks, rather than on time-consuming paper-based banking processes,” says the European Investment Bank’s Stasi.

b-ility’s digital bank reach in southern Italy

The favourable conditions of the European Investment Bank loan to b-ilty are passed on to small businesses:

  • 30% of the resources will benefit small companies in EU cohesion regions (in particular Molise, Campania, Puglia, Basilicata, Calabria, Sicily, Sardinia, Abruzzo, Umbria and Marche)
  • 20% of the funds will be dedicated to investments by small businesses that produce green energy, reduce greenhouse gases emissions, and improve energy efficiency.

“For us that’s a great way to help a European regional bank grow and to foster more green finance for smaller projects,” says Tatiana Bosteels, the European Investment Bank economist working on the deal. “We would like to engage in a long-term relationship with b-ilty to finance more and larger climate action projects in the future."

Digital bank with a human result

According to The European Small Business Finance Outlook 2022, small companies accounted for 99.8% of all non-financial enterprises and 64.4% of total jobs in 2021.

It’s crucial to tap the enormous potential of small businesses. So illimity doesn’t just loan them money, but actively participates in their growth strategies. b-ilty focuses on the needs of the historically underserved one million small businesses in Italy.

b-ilty can provide support to various businesses across Italy, without the overheads created by physical branches. The platform can quickly analyse dozens of indicators, providing clear credit answers to small entrepreneurs.

“Within a few days a company will know whether it’s entitled to get a loan or not, and why,” says Tzindzade. Within three or four weeks, a company will be able to use the bank account that it opened in 30 minutes, instead of the 30 days it takes with a traditional corporate bank.

“We like doing nice, good things and doing them fast,” says Passera.