In December 2003, the municipality of Neuss in North Rhine-Westphalia joined the
support association for Oikocredit, a solidarity investment fund that finances
360 projects in 31 countries, in Latin America, Africa, Asia and eastern Europe.
It mainly offers micro-credits, including a loan to a transporters’ co-operative
in the Ivory Coast for the purchase of vehicles and a loan to rural women in
Peru.
One cent per inhabitant. Oikocredit, based in the Netherlands, has a total of
550 members around the world: they include churches and religious organisations,
loan recipients and support associations, including the one in Bonn, which
prompted the Neuss municipal council to become involved. This municipality,
which already supports fair trade through its procurement contracts, hopes to
encourage its citizens to direct their savings towards solidarity funds. The
council has invested one euro cent per inhabitant, coming to 1,500 euros. This
sum has been put into a single fund, Oikocredit, which can receive money from
private individuals, religious organisations, NGOs, its support associations and
now local councils. In Germany, the municipality of Rheda-Wiedenbrück has
followed the Neuss council’s example, and the Bonn municipal council plans to do
the same.
Andreas Tschulik
Federal ministry of the environment, Department VI/5
Stubenring 1
A-1010 Vienna
Tel. : (00 43) 1 515 22 1250,
E-mail : [email protected]
In 2004, the first financial ecological seal of approval was introduced in
Austria. It helps consumers to identify socially responsible funds, on the basis
of exclusion criteria: investments that might promote nuclear production,
armaments or GMOs are excluded. It highlights good ecological and social
practices, as well as transparency (based on the EUROSIF guide published by the
European Social Investment Forum NGO). An independent expert verifies compliance
with the criteria. Ten funds have received this official seal of approval to
date.
Review of financial products. This seal was created by the Federal
Ministry of Agriculture, Forestry, the Environment and Water Management, in
response to a request from the Austrian consumers’ association Verein für
Konsumenteninformation (VKI), which in 2001 had conducted a critical review of
self-proclaimed sustainable financial products in Austria. The Environment
Ministry, the national agency responsible for the seal of approval, employers’
and workers’ representatives, environmental NGOs and six independent European
rating agencies formed a working group. Twelve Austrian solidarity venture
capital companies offering socially responsible funds took part in these
discussions, which gave rise to selection criteria and monitoring procedures
published in 2004. These can be revised every three years.
The Alternative Financing Network (RFA), founded in 1987, brings together
non-profit associations seeking to promote ethical and solidarity-based finance.
It has 70 member associations involved in the social economy, environmental
issues, efforts to combat exclusion, human rights, education and training and so
on. With a budget of 500,000 euros, the network carries out research and
conducts campaigns aimed at alerting savers and investors, political authorities,
financial institutions, the voluntary sector and academic circles to ethical and
solidarity issues in money-related matters.
Savings and unit trusts. The network also develops both ethical
and solidarity-based financial products: savings accounts, unit trusts and life
insurance policies. Solidarity products include shared-return products, with a
solidarity commission paid back to the network’s member associations.
The RFA is in contact with local authorities that invest in ethical funds. It is
currently conducting a survey of local authorities in order to ascertain their
expectations of socially responsible investment, prior to launching a massive
awareness-raising campaign targeting such authorities, inspired by the
solidarity weeks organised by Finansol in France.
The move towards a universal banking service. The RFA has very
actively lobbied the Belgian government, with positive results. Under the 2003
Universal Banking Service Act, no bank can refuse a customer in Belgium on the
grounds of his or her financial situation. This Act, which is still unique in
Europe (similar legislation is under consideration in France), was passed
unanimously by the Belgian parliament in the wake of research carried out by the
network.
Other campaigns have also been conducted. In 2004, the campaign against bank
investments in the armament industry led to the enactment of a law prohibiting
unit trusts from investing in anti-personnel mines. A 2004 private bill seeks to
ensure that environmental aspects are taken into consideration in companies’
annual accounts and management reports. Another private bill calls for the
granting of official aid to be invested abroad to be subject to social and
environmental responsibility criteria. Yet another private bill demands tax
concessions for investments promoting sustainable development.
The aim of the Un Sol Món foundation, run by the Caixa Catalunya bank and its
microcredit support network XESMIC (Xarxa de Suport al Microcrèdit), is to
promote microcredit as a way of combating exclusion by helping unemployed people
start their own businesses. This organisation is made up primarily of
municipalities within the autonomous community of Catalonia.
Role of savings banks. The microcredits programme launched in 2000
uses the network of local savings banks in Catalonia in order to direct
investors’ savings towards people on employment integration schemes. Like the
Caixa Catalunya, these savings banks have very close links with local and
regional authorities, and often have representatives of the latter on their
boards of directors.
600 microcredits were granted between 2001 and 2004, for sums ranging from 5,000
to 8,000 euros, making up a total portfolio of 5.6 million euros. Repayments
must be made within a period of three years, which can be adjusted according to
the recipient’s needs; the microcredits carry a commission-free annual interest
rate of 6%.
Local community-based services. The Un Sol Món foundation, which is
heavily involved in employment integration (see page 31), also helps people
starting their own businesses with administrative formalities and project
monitoring and evaluation. Most of these business start-ups offer local
community-based services, such as small grocery shops, restaurants and
hairdressing salons. A loan might be used, for example, to purchase second-hand
trucks in order to start a small business transporting building materials.
The foundation also runs microfinance programmes in developing countries:
Ecuador, El Salvador, Mozambique and Morocco. Its director is currently
vice-president of the European Microfinance Network, set up in Barcelona in June
2003. In 2004, it was designated the best initiative by a Spanish savings bank
for its work in this area.
Founded in 1997 at the instigation of Marie-Christine Blandin, then president
(Green Party) of the Nord-Pas-de-Calais regional council, the Caisse Solidaire
offers its clients the opportunity to invest in funds designed to finance small
business projects by people who do not have access to credit. Its purpose is
thereby to create jobs in a traditionally industrial region hit hard by
unemployment. The Caisse Solidaire du Nord-Pas-de-Calais is a co-operative
financial company with variable capital. Its shareholders comprise three boards,
each holding one third of the capital: an institutional board that includes the
regional council, a financial board formed by Crédit Coopératif and the Deposit
and Consignment Office, and a partnership board that includes the Fédération des
Clubs d’Investisseurs pour une Gestion Alternative et Locale de l’Epargne
Solidaire (CIGALES).
0-2%. The Caisse offers private individuals and businesses
solidarity savings accounts for a duration of two years at a rate of 0-2%, and
solidarity savings books at a rate of 0-1%. It lends businesses between 5,000
and 75,000 euros over two to five years at a rate of 6.9%. It thereby supports
activities contributing to rural development, environmental conservation and
efforts to combat exclusion. In 2003, the Caisse received more than 1.5 million
euros from 165 savers; it grants an average of 150 loans per year, making it
possible to create or maintain more than 250 jobs in the region.
Agreement between social co-operatives and the Veneto
Regional Council
Social co-operatives in Italy often face cashflow problems arising from their
numerous contracts with local authorities, which have much longer terms of
payment than commercial contracts. In order to address this problem, in June
2003 the Banca Etica (Ethical People’s Bank, see box) and the Veneto regional
council signed an agreement designed to support social co-operatives in that
region, including both type A (social and health work) and B (integration) co-operatives.
It provides for loans to be made available to co-operatives wishing to expand or
to improve the quality of their services, provided that the quality of those
services is accredited by local authorities. These are interest-free,
non-mortgage loans, whose cost to the bank is offset by regional council
subsidies. A loan of up to 36,150 euros can be made to each organisation.
A guarantee co-operative. The social co-operation department
within the Veneto regional council has been involved in the development of this
project from the outset, as have the Confederation of Italian Co-operatives
(www.confcooperative.it) and the National League of Co-operatives and Friendly
Societies (www.legacoop.it), which helped to define the terms of the agreement. SolidarFidi Veneto is also a key partner in the operation. This is a bank
guarantee co-operative made up of social co-operatives, set up in 1995 to
facilitate the granting of credit to the latter.
With support from SolidarFidi, the Banca Etica co-ordinates each phase of the
operation: agreement between the partners involved, establishing the
administrative procedure, overseeing relations with social co-operatives,
distributing funding and drafting annual reports on the project. Through the
intermediary of SolidarFidi Veneto, social co-operatives submit loan
applications to the Banca Etica. SolidarFidi Veneto carries out a preliminary
assessment and submits a comprehensive dossier to the Banca Etica, which
undertakes the final assessment and decides whether or not to grant the loan.
The bank then forwards funding applications to the relevant administrative
departments within the Veneto regional council, which make payments to the
co-operatives. Out of 63 applications, 56 have received a positive response. 5
million euros have thereby been granted.
The Riparte co-operative works with homeless people in the city of Carpi, in
Emilia-Romagna, including ten or so fairground families, comprising about a
hundred people living in makeshift camps in fields. In 2002, five of these
families expressed a desire to move elsewhere. Riparte then established a
partnership with the municipality: the Mag 6 home ownership programme (www.mag6.it),
named after a regional solidarity credit body.
Help with moving house. A loan of up to 25,822 euros is granted to
each family, to be repaid within eight years. Mag 6 has made available a total
sum of 105,800 euros for this purpose. The municipality and the Riparte co-operative
act as guarantors towards Mag 6, provided that the family in question produces
evidence of at least one stable income or a regular pension. The municipality
makes advances against the interest on the loans, coming to a total of 35,350
euros. Two Riparte employees help the families look for housing and assist them
both during and after their move with a view to easing their integration into
their new neighbourhoods.
In 1996, the Charities Aid Foundation (CAF) launched the Investors in Society
pilot project, in order to trial the possibility of setting up a financial
institution aimed at charities. The loans granted by this body went primarily to
associations in disadvantaged urban areas. After several years of operation, the
foundation realised that its work would be more effective if it obtained the
status of a bank. The Charity Bank was consequently set up in 2002; it is the
first financial institution to be recognised by both the Financial Services
Authority (FSA), which regulates British financial institutions, and the
Charities Commission.
Loans at preferential rates. The Charity Bank allows private
individuals and businesses to open savings accounts, then uses these funds to
offer accessible loans (at 6% interest, compared with 9% from conventional banks)
to associations. All operating profits are reinvested in the voluntary sector.
In 2003, it granted 123 loans to associations working in the fields of education
and the arts, health, housing assistance and community life.
Tax relief. In 2002, the British government introduced a
measure granting tax relief for all investments in projects aimed at
rehabilitating disadvantaged urban and rural areas, known as Community
Investment Tax Relief (CITR). The Charity Bank, which was the first institution
to be accredited by the government for savings products coming within this
programme, has launched CITR accounts enabling savers – private individuals or
businesses – to take advantage of annual tax relief of 5%, in return for locking
in their funds for five years. The bank is thereby helping to combat the
depopulation and marginalisation of certain regions. Along with a number of
loans granted to community centres, it has, among other things, helped the
Bexhill (Sussex) city council to finance the opening of an adult training
centre, and the Mull Fishermen’s Association – thanks to a loan of 10,000 pounds
(nearly 15,000 euros) – to renovate port facilities in Tobermory Bay, Scotland,
with a view to ensuring the survival of the small fishing community on the Isle
of Mull.