Andrea and a Five Year Long Thesis
Andrea Pinto's thesis, which was awarded on Monday 8 May in front of Enrico Letta and Mario Monti during the annual "Europeans" conference (an initiative to discuss European open issues with the young), has deep roots. "I started thinking about it during the first year of university", Pinto says, "when I found myself in disagreement with a statement heard in the classroom, that commercial banks would be shifting their business model from credit providers to service providers, especially with regard to SMEs, which are notoriously too risky for the banks to maintain acceptable margins. I was convinced that it would have been better to intervene in order to make financing easier and more profitable".
Pinto, a 25-year-old from Rome, graduated last year at the Master of Science in International Management at Bocconi, and has been awarded for a thesis, SME Alternative Funding Channel: The Syndicated Credit Pooling, which suggests a new funding channel for European small and medium-sized businesses. The syndicated credit pooling model would be able to mitigate the so-called "SME financing gap", the fact that many legitimate funding requests by small and medium-sized businesses remain unmet not so much because of their lack of "bankability", but because some characteristics of SMEs, such as small size, poor diversification, financial structure and lack of guarantees, make the loan not profitable from the point of view of the bank's Return on Economic Capital Absorption (RoECA). "The idea", says Pinto, "is to change the point of view with which you look at the problem. The key is not to disintermediate the banking system but rather to use banks as information brokers and financial institutions as capital financiers. The key is to create a model based on information produced by banks (soft capital) but to allow financial institutions to directly participate in the issuing (hard capital). To make the system efficient and credible a supranational and European authority should be involved and the major European countries should participate, so as to diversify both systemic and non-systemic risk".
Pinto has molded his entire university course in order to realize the idea that he then finally translated into the award-winning thesis: the choice of optional exams, the participation in the Cems program with the exchange at the Louvain School of Management and the internship at the European Commission between 2015 and 2016, in a unit that deals specifically with major European financial intermediaries (EIB, EIF, EBRD).
"I have devoted a lot of energy to this idea", says Pinto, who is now associate consultant at Bain & Company, where he provides strategic consulting for the financial industry, "and I also interpreted participation in the award as a possible external validation, which allows me to further deepen the model. To go further, at this point, it would be necessary the collaboration of the European institutions to undertake a pan-European feasibility project through the participation of the major European systemic banks".