Developing social banking

Creating and operating financial institutions inspired by the spirits and techniques of the social economy. In effect, these social and environmental investors largely finance those sectors, projects and soical groups that the mainstream banking sector has not financed.

Deregulation and the increasing globalization of the financial services marekt has helped to expand the overall availability of financial credit but, paradoxically, more people than ever are also excluded from banking services. There is a decreasing willingness and ability to serve "expensive" savers on the deposit side (such as poorer households, unemployed people, people with low or irregular incomes, etc) and especially, a decreasing tendency to fund less profitable and "risky" borrowers on the lending side: small enterprises, non-profit organizations, service sectors, economically declining regions, emerging activities such as the environmental sector and the social services sectors. There are increasing sectors of unment needs. This is especially the case fro new activities related to a more dsustainable development (organic agriculture, renewable energies, green technologies, etc). With the dismantling of the welfare state, has been added a range of social service needs (childcare, care for the elderly, neighbourhood services, colectives transport, help for young unemployed, etc). Also regions of industrial decline, disinvested cities and neglected suburbs may have initiatives and strategies in terms of local regerneration or mall and endogenous business development that have funding needs which are hardly matched by the classical banking sector.

The International Association of Investors in the Social Economy (INAISE) was created in 1989 as a network of several non-profit financial organizations (40 in 1998). The keynote is quality and is strategically expressed as a blend of money, proximity and financial professionalism. Growth rates are strong (annual rates of 30-50% being the rule) but currently insufficient to become mainstream.

ACCION International is a nonprofit organization that works to reduce poverty in the Americas by lending exclusively to owners of small business. Its affliated routinely achieve loan-collection rates of 98 percent, in part becuase borrowers are organized into solidarity groups which create a kind of "moral guarantee". The credit programme is built on sequential short-term loans, some for as little as $100.

Shared Interest is a not-for-profit social investment fund designed to enhance low-income South Africans' access to credit previously denied them because of their race, gender, or income.