The Invisibles – a research for the first time about vulnerable groups in Romania

Over 60% of Romanians self-evaluate negatively from the point of view of their personal value to society and 8 out of 10 say that they have felt discriminated at least once in their life. Moreover, 86% of respondents feel that they have been unfairly denied a loan at least once in their life, including because of their social status.

These are the conclusions of a quantitative and qualitative research carried out by Novel Research and Izibiz on behalf of Provident Financial Romania on 800 respondents during April-September 2022. The objective of this research was to extract from the general picture of the Romanian population a clear picture of the vulnerable and invisible categories in Romanian society, the problems they have, but also the possible solutions. The study, which looked in depth at six vulnerable groups, also found that the frequency of perceived discrimination is twice as high for people from invisible groups.

At the same time, 57% of the working population is confident that they will have a decent living after retirement. However, a similar percentage feel that retirement age is too far away to worry about now, and only half of respondents expect to live to that age and therefore consider it worthwhile to put money away for retirement.

The six invisible groups analyzed were: subsistence farmers, small entrepreneurs, single-parent families, informal workers, the unemployed aged 55 to 64 and pensioners at risk of poverty and social exclusion. According to the data obtained from the research, millions of Romanians belong to at least one of these groups and their inclusion in the formal economy could entail cumulative contributions to the national budget of approximately 4 billion lei per month.

“We strongly believe that social status should not prevent people from accessing a legal form of finance. A good part of our customers take a loan from us for the first time, and this helps them to take out loans from another side: more than 30% of new customers last year had no credit history and, every year, thousands of clients exit our portfolio through refinancing at other financial institutions. This is the role we want to play in the financial industry in Romania, and we feel that we have both the responsibility and the ability to contribute to raising awareness of the problems faced by vulnerable and invisible groups in Romanian society, including from the perspective of access to products and financial services. Separately, we are calling for a grant worth 100,000 euros, intended for a program aimed at helping the invisible categories in Romania to improve their living standards, giving them the knowledge and self-confidence they need to move forward,” said Florin Bâlcan, General Manager of Provident Financial Romania.

Who are vulnerable adults?

Subsistence farmers. Currently, there are over 548,000 subsistence farms in Romania, which generate a gross income per household of 553 lei. Despite the fact that subsistence farmers are perceived positively by society and that their products are considered better and cheaper than those from the supermarket, they are considered one of the most vulnerable social categories. The research found that in order to improve their living standards, members of this group need management skills and an understanding of the law, along with the resources to increase their degree of association and access markets with a steady flow of sales.

Small entrepreneurs. 36% of Romanians say that they have used at least once services delivered by entrepreneurs from the gig economy area. 84% of Romanians have a very good opinion of entrepreneurs, a percentage that increases to 91% among young people. Equally, entrepreneurs have the highest level of self-esteem, but they feel among the most discriminated among all social segments analyzed, along with black workers.
In Romania, there are over 272,000 single-parent families, and single parents feel a great deal of time pressure: they are stressed that they are not with their children enough, but at the same time, they need to be integrated into the labor market full-time for to meet the expenses. Thus, the main problem identified in this category is the lack of institutions that can ensure the supervision of children in accessible conditions or the incompatibility between their schedule and the regular work schedule.

At the declarative level, 19% of respondents know someone who works undeclared and, according to estimates, there are more than 537,000 people performing undeclared work. At the level of 2022, Romania’s informal economy is estimated at 29.03% of GDP. Those in this category do not have access to social or health services, and most live from day to day and have difficulty accessing financial support or attending long-term training courses. From a socio-demographic point of view, the risk of working in the dark is significantly higher among men, among young people, in Bucharest and in large urban areas (over 200,000 inhabitants), but also among single-parent families. Black workers, along with subsistence farmers, they register the highest level of distrust in the pension system (56%).

More than 78,000 Romanians who are between 55 and 64 years old are unemployed and half of them do not know anything about how much their monthly pension will be, although they are close to retirement age. Additionally, 44% of those in this age group would rather have a better lifestyle today than save for retirement. The unemployed in this category have the greatest difficulty in finding a job and have the lowest level of understanding of how the pension system works. A large part of the unemployed over 55 category lacks skills relevant to the current labor market, such as digital skills and those of navigating the hiring process and managing the relationship with the employer. Without a partner to mediate the process, they can hardly get out of the category, the research findings reveal.

Of the more than 5 million pensioners, 1.46 million have a monthly income of 1,122 lei and are at risk of poverty and social exclusion. 56% of Romanians have little or very little confidence in the fact that the state pension system will provide them with a decent living. Moreover, thinking about their ability to ensure a decent living in retirement, more than 4 out of 10 Romanians have little or very little confidence that they will succeed. Beyond the lack of money, retirees at risk of poverty and social exclusion also feel amplified other problems that come with retirement age: the lack of sufficient economic and material resources; lack of respect and support from others; lack of opportunities for socializing and spending free time; access to care services.

farmersinformal workersInvisiblesloanNovel ResearchpensionerspovertyproblemsProvidentresearchriskRomaniasingle-parent familiessmall entrepreneurssocial exclusionsocial statusunemployedvulnerable groups
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