|
|
Doc. 9696
13 February 2003
Women and micro-loans
Report
Committee on Equal Opportunities for Women and Men
Rapporteur: Ms Pericleous Papadopoulos, Cyprus, LDR
Summary
Micro-finance has become a key instrument in combating poverty, affording women and men on low incomes the opportunity to play an active role in their own economy and enhance their social status.
Women make up a large proportion of their customers; this can be explained by the fact that almost 70% of the world population living on less than one dollar a day are female.
Accordingly, the Assembly invites the member states to adopt measures to foster the development of micro-finance institutions by encouraging co-operation between all the players on the ground: social services, non-governmental organisations, associations and private ventures such as banking institutions, all of which have some experience to contribute in this field.
The Assembly recommends that the member states adopt measures to ensure that micro-finance is accompanied by proper training with a view to supporting borrowers in their activities.
I. Draft resolution
1. As a result of the spread of poverty, a growing section of the world population is experiencing precarious living conditions. This endemic phenomenon affects all European countries and has a particular impact on women and some categories of people made vulnerable by the economic situation.
2. Poverty is sometimes felt as something for which there is no remedy, owing to the individual’s supposed dependency on social welfare. What is needed is a Europe-wide economic development that benefits everyone and enables all citizens to participate in their country’s economic growth.
3. The Assembly, which is anxious to tap the potential of those people who have been marginalised, notes that women are often the chief victims.
4. The Assembly, mindful of the fact that social welfare should not be more than a stopgap solution, wishes to see poor people given easier access to sources of micro-finance. It also wants to see all borrowers provided with a personalized assistance to enable them to make maximum use of the sums borrowed.
5. The participation of a woman in a micro-finance scheme could be a means of escaping from an eventual abusive relationship with her partner.
6. In numerous instances, micro-credit has helped alter perceptions regarding women’s contribution to economic and social development and their role in this regard. More specifically, micro-credit has led to greater recognition of women’s capacity to devote themselves to a work producing some income.
7. The Assembly therefore invites member states to devise collective strategies for action at local and national level, aimed at co-ordinating co-operation between the various components of civil society and at mobilising human and financial resources in a bid to combat poverty and the lack of access to financing for anybody wishing to undertake an economic activity.
8. The Assembly therefore recommends that the member states of the Council of Europe:
i. create a framework conducive to the development of small and micro-enterprises with a legal and regulating structure ;
ii. establish an attractive legal and adapted framework to entice micro-enterprises out of the informal sector and thus ensure the inclusion of employment in social protection;
iii. legalise informal employment and provide an institutional framework enabling assistance to reach a larger number of people;
iv. adopt regulatory and promotional measures and provide guidance in order to channel investment into micro-enterprise through a policy of tax incentives;
v. promote a reduction in interest rates on small loans in order to make them more attractive and less onerous with the help of subsidies in a proportion which will not endanger the viability of this kind of loan;
vi. work with social actors and the conventional financial institutions to negotiate a workable balance between the payment schedules and conditions imposed by banks and the ability of borrowers to honour repayments;
vii. make the regulations governing dealings with micro-enterprises more flexible and to facilitate also the circulation of information and the transfer of competence in Europe in order to share the experiences and to reinforce, in the long term, a booming sector;
viii. make it easier for micro-enterprises to join forces in negotiations with suppliers and customers in order to increase their bargaining power;
ix. provide for training to equip borrowers for their role as entrepreneurs;
x. ensure in particular that women have free access to micro-credit, and combat any form of discrimination which might prevent them from gaining access to this kind of financing;
xi. seek to promote commitment to democratic participation in the decision-making process by everyone who is involved;
xii. encourage the provision of complementary financial services (insurance, saving schemes) in order to shield borrowers against unforeseen circumstances.
9. The Assembly decides to forward this Recommendation to the Council of Europe Development Bank, to the EBRD, the World Bank and the European Association of Banks.
II. Explanatory memorandum by Ms Pericleous Papadopoulos
Introduction
1. Poverty is the main factor in the marginalisation of a large section of the population. This situation poses a threat to economic and social cohesion everywhere in Europe. A concerted effort is needed in order to resolve, or at least alleviate, the problem.
2. The precarious situation of a significant proportion of the population is the result of a bleak economic picture. The former Soviet bloc countries have had to undergo a painful transition from State control to a market economy. The countries of western Europe, meanwhile, have faced an economic recession.
3. Despite welfare benefits aimed at cushioning the material impact, a large proportion of the population, mainly women and children, remains vulnerable.
4. One of the Council of Europe’s chief objectives is to achieve prosperity and well-being for all the citizens of Europe. The organisation includes virtually all the European countries in its ranks, and should therefore be in the very forefront of the struggle against this scourge.
5. In the light of the problem and its implications, work has commenced on a project seeking to give effective help to poor people while at the same time restoring their confidence in their own abilities. The social and economic dimensions of poverty need to be addressed without overlooking the human aspect of the problem.
6. To ensure effective action, we need to refer to existing experience, which shows that micro-credit has produced positive results in tackling poverty.
7. Priority with regard to micro-credit should be given to the most vulnerable and those likely to produce the best return. On the basis of these two criteria, there is a strong argument for placing the spotlight on women.
8. Women frequently face greater difficulties than men in obtaining credit, and should therefore be given greater support.
9. This report is designed to draw the attention of the member States of the Council of Europe to the need for joint action to tackle a growing problem. One of the best tools for dealing with the phenomenon would seem to be the promotion of micro-credit institutions, whose grassroots involvement and efficiency towards the economic and social insertion of the people concerned make them better equipped to combat poverty.
I. Micro-credit as a tool for development
1. Responding to the high level of demand
10. The principle underlying every loan is its repayment. Conventional banking institutions do not lend to poor people for fear that they will be unable to make their repayments on time. Therefore, the poor are refused access to credit, as they are unable to provide sufficient guarantees to secure a loan.
11. The success of micro-credit schemes reflects a far-reaching change in the field of micro-finance, challenging the notion that people who are financially disadvantaged do not refund.
12. In Bangladesh, for example, there are more than four million borrowers, both male and female to financial institutions. Despite the country’s intense poverty, well-managed programmes achieve very high rates of repayment, sometimes in the region of 95%, this means above the rate of repayment of the credits
13. Clearly, therefore, lending can be an effective tool in combating poverty. Unlike donor aid, loans, once they have been repaid, can be used again to help other borrowers. All that is required is an initial sum to kick-start the lending activity.
14. Micro-credit is based on the principle of giving the poorest people the chance to gain access to loans at normal rates, something they are routinely denied. This enables them gradually to improve their standard of living, in particular by helping them become self-employed and thus to some autonomy.
15. Access to micro-credit is no simple matter for poor people, a fact that hampers their efforts to develop income-generating activities and raise their standard of living. A study of six Latin American countries carried out in 1995 by the Swiss funding agency FUNDES revealed that the main problem facing 70% of small-scale entrepreneurs was lack of access to credit.
16. The amounts involved in these micro-loans, which go to finance small-scale production projects, are not very significant. The average amount borrowed from the Grameen Bank is around 60 euros. This amount, which may at first appear derisory, has been enough to enable numerous poor people in Bangladesh to start up or expand an activity producing some income.
17. In Europe, the basic investment needed is clearly greater as a result of the difference in living standards compared with the countries of the South. Nonetheless, a large number of micro-finance institutions do exist. In this regard, the work of the Association pour le droit à l’initiative économique (ADIE) is worthy of mention, it offers “solidarity loans” up to a ceiling of 5 000 euros as well as graduated loans starting at 1 000 euros to people already engaged in an income-generating activity.
18. An approach of this kind in the industrialised countries would provide a point of entry and a creative alternative to social welfare.
2. A grassroots approach for a variety of settings
19. Local needs are best met by having a large number of credit institutions locally, in a system not dissimilar to the branch network of a conventional bank. The Grameen Bank provides a classic example, being represented in over 33 000 of the 68 000 villages in Bangladesh.
20. Micro-credit is succeeding in reaching an ever-growing number of people. For instance, the Grameen Bank has lent some 2 billion dollars to 2.3 million people, over 90% of them poor women. The Micro-Credit Summit in Washington in February 1997, which was attended by 2 900 delegates from 137 countries, kicked off a nine-year campaign to deliver loans for job creation to 100 million poor families worldwide, and to women in particular.
21. The grassroots approach also takes the form of borrowers joining forces in small groups, creating a sense of solidarity among the members. This system has its roots in the tightly-knit social fabric that already exists in some sectors of the population. While this model may be more prevalent in developing countries, it is not unknown in Europe, existing, for instance, among some minorities such as the Roma/Gypsies.
22. While the solidarity existing within a small group frequently forms a basis for micro-credit, other approaches exist which are equally effective. For example, the BRI programme in Indonesia disburses loans to individuals, but makes use of other channels to obtain what we might describe as information reserved for participants. Other schemes, including SANASA in Sri Lanka, MYRADA in India and the SAP agglomerates development programme in Sri Lanka, highlight the importance of floating capital (i.e. money from local savings earmarked for loans). These schemes place their chief emphasis on savings and in some cases, particularly that of SANASA, reduce the need for other sources of money (external capital) to a minimum. This approach means that members’ savings serve to guarantee the loans. The most important consequence is that, since the funds are provided by the community and must be repaid in the name of solidarity.
23. Separate studies by Rogaly and Copestake confirm this finding and highlight the crucial importance of a sense of ownership and mutual interest in ensuring the survival of the organisation. Many savings and credits cooperatives in Western Africa illustrate this aspect.
24. The issue of people who feel they lack entrepreneurial spirit also needs to be addressed. This does not mean they should be left out. Organisations working in the micro-credit sector are attempting to devise programmes enabling their main instruments to reach those who have so far been excluded. A specific programme, which is concerned with income generation for vulnerable group development (IGVGD), attempts to reach the poorest women by offering concessional loans, combined with emergency rations provided by government. The idea is for the members of the IGVGD to be integrated gradually into mainstream rural development programmes, within which they obtain increasingly substantial loans.
25. NGOs in South Asia, also offer programmes aimed at creating paid employment. Others, like the Orangi pilot project in Pakistan, help small enterprises create jobs for poor people. However, as in the case of existing production projects, these measures are mainly of assistance to male entrepreneurs. Very few studies have examined whether these businesses will also create jobs for the poorest women.
3. The desire to provide support instead of handouts
26. After obtaining a loan, borrowers must not be left to their own devices, but must be able to seek advice in order to make the loan more effective. This will enable borrowers to focus their efforts to the best effect and thus derive maximum benefit.
27. The Emprender foundation in Argentina has played an important role in the development of micro-credit in that country. In addition to granting more than 12 000 loans totalling 16 million dollars over a three-year period, it offers training for micro-entrepreneurs in the form of seven meetings dealing with various aspects of managing a micro-enterprise.
28. In France, the Association pour le droit à l’initiative économique offers its clients individual support free of charge before and after start-up, and organises groups of entrepreneurs to enable them to share experiences and acquire the appropriate information and training.
29. In Belgium, an alternate credit cooperative (CREDAL) offers first managing help to the borrowers.
30. Practitioners also highlight the importance of access to financial services aimed at income protection (savings, insurance and other mechanisms for reducing vulnerability) as a necessary adjunct to increasing income. The Dhaka Declaration (ratified by 21 South Asian NGOs in 1996) stresses the importance of offering a wide range of financial services in order to meet the varying financial needs of the poor and the very poor.
31. Micro-credit works best in combination with other measures. The wide range of community-based projects carried out in South Asia demonstrate the fact that other forms of assistance are required. In this regard, it is important to assess impact from an overall perspective, looking beyond the narrow confines of short-term income growth.
32. The experts must examine not whether micro-credit is useful, but in what instances, for whom, and in combination with what other measures. BRAC, in common with numerous other NGOs, concedes that credit on its own has distinct limitations as a development instrument (BRAC, 1992). BRAC also makes use of alternative schemes to yield the best results.
33. These findings provide ample justification for taking account of the overall financial needs of poor women and men. Savings, consumer loans and insurance all have a key role to play within strategies designed to tackle the problems facing poor people and lessen their vulnerability. At present, most micro-credit schemes go only part of the way towards meeting the financial needs of men and women. It is no surprise, therefore, that micro-finance institutions rarely replace all other informal sources of credit.
34. Despite the current trend towards offering minimal credit, a large number of Asian NGOs have put in place a wide variety of financial services for poor people. For example, the WRATC (Women’s Regional Association of Thrift Cooperatives) in Sri Lanka administers a life assurance scheme covering current loans. The SANASA co-operative development foundation, imitating informal lenders to some extent, offers easily accessible consumer loans. These different financial services reinforce the positive impact of micro-credit by seeking to shield borrowers from unforeseen circumstances which might affect their ability to repay.
II. Women: a precious resource
1. Why women merit special treatment
35. Attempts to tackle poverty will avail nothing unless accompanied by efforts to reduce inequality between men and women. It is increasingly clear that moves towards greater gender equality are a crucial element in any long-term development strategy.
36. According to some studies, women account for 70% of people living on less than one dollar a day. Not only do women represent the majority of the poorest individuals; they are also more vulnerable than men. Hence, despite the social welfare schemes which exist in some European countries, some women, for instance single mothers or divorcees, may face serious difficulties in providing for themselves and their children.
37. In Nicaragua, a study by the International Foundation for Global Economic Challenge (FIDEG) shows that in the towns 47% of the families are headed by women and and 36% in rural households. However, men have easier access to credit and obtain the largest loans: 84% of loans in excess of 1 600 dollars go to men. The banks, according to the survey, disburse 94% of the credit available for production and consumption to men, and only 6% to women.
38. These findings relating to poverty and vulnerability among women appear to demonstrate a clear need to act on their behalf. One of the methods we can use is to target them better via micro-loans and thus equip them with the means to help themselves.
39. Such an approach is not only necessary but has been shown to work in other countries.
40. One of the main criteria guiding any development aid must be its effectiveness and its actual impact on the recipients.
41. Existing micro-finance schemes show that women as a rule are better than men at repaying loans, especially in the context of schemes based on a group or on mutual solidarity.
42. In addition, it appears that loans to women have a greater knock-on effect, as women see to it that children benefit from the increase in the mother’s income. In particular, women devote more resources to housekeeping, education and food. Hence, in a micro-credit scheme funded by UNICEF in Vietnam, 97% of the daughters of borrowers attended school, compared with a figure of 73% for the rest of the population.
2. Recognising one’s potential
43. Giving women access to financial services enhances their decision-making capacity. When they participate in a credit scheme, women are forced to make certain decisions, relating among other things to their income-generating activities. This is true, for instance, where a loan is used to expand a micro-enterprise. Little by little, this change in terms of decision-making extends to other areas of day-to-day family life.
44. This situation results in increased self-confidence. Although this concept is difficult to quantify, women who have access to micro-credit will become more aware of their abilities, and take legitimate pride in their achievements.
45. It is often noted that in families with small income, the man tends to dominate the woman, keeping her in a situation of financial dependence. By developing her micro-enterprise, the woman generates her own income, contributes to the family’s income and thus acquires a certain measure of autonomy as regards her spending. Access by women to credit thus seems to have implications for gender relations within the home. Change on this front may be slow, but it represents a step in the right direction towards greater equality between men and women.
46. Hence, micro-credit may have a favourable impact on domestic violence. In practice, while a woman’s increased autonomy may not always meet with her husband’s approval, this is rarely reflected in an increase in domestic violence. On the contrary, we must take into account the fact that participation in a micro-finance scheme may provide a woman with a means of escaping from an abusive relationship.
47. However, impact evaluation raises certain problems and often entails weighing up the costs and benefits in social terms. For example, a woman’s participation in a credit scheme may produce both an improvement in her situation and an increase in workload. Assessing the benefits of peer group participation also poses a challenge. As already mentioned, it is generally agreed that, in many countries, participation by women in groups of this kind affords them greater contact with others, provides them with more information and increases their mobility and self-confidence and their sense of solidarity. The meetings empower women, provided that they are able to discuss, for instance, their personal problems as well as issues relating to repayments and management of the scheme. Furthermore, meetings encroach upon the time normally devoted to other activities. Ultimately, the nature of the meetings will be decisive in determining the outcome.
3. Micro-finance as a mean of economic and social autonomy
48. In numerous instances, micro-credit has helped alter perceptions regarding women’s contribution to economic and social development and their role in this regard. More specifically, micro-credit has led to greater recognition of women’s productive role.
49. For instance, a Pakistani woman entrepreneur, underlines the value of micro-credit for women, saying that they are able to use the money they earn as they see fit and that they gain izzat (pride and respect) because that money is proof of their contribution. Without it, they work like slaves without their help being recognised. Even their own husbands, she adds, claim that they don’t work. When they have their own money, women are no longer mohtaj (dependent to the point of being at the mercy of another person: the term is often used to refer to someone with a physical disability).
50. Efforts to improve the socio-economic situation of women must be placed in their proper context. For example, a study of the members of the SEWA urban micro-credit scheme in India revealed that, in that setting, considerations of mobility and visibility ranked far below other considerations. In sharp contrast to the rural women participating in the BRAC and Grameen Bank schemes, the self-employed entrepreneurs in the urban SEWA scheme had always enjoyed a degree of visibility, mobility and independence. While women in rural areas tend to work in isolated conditions, women street vendors in Indian cities, to take just one example, have daily contact with traders and middlemen. Accordingly, the way in which women’s role in society evolves, and the pace of change, will vary according to the specific setting.
51. Whether or not they are poor, women may take advantage of their new-found financial autonomy to assert themselves, defend themselves against violent partners or act as role models in the community.
52. Moreover, micro-credit schemes have, in numerous instances, increased women’s mobility and consolidated links between women formerly confined to the home. Women who borrow money establish links of solidarity through their involvement in lending circles and in village organisations. This phenomenon is particularly important in Bangladesh, where women’s mobility is limited. The weekly meetings give them an opportunity to meet outside the home to discuss their problems. Some studies suggest that greater financial autonomy may have wider social implications, notably in terms of a greater say for women in family matters, including the family finances.
53. In the context of wider efforts to raise women’s consciousness and mobilise them, credit may have an important contribution to make as a first step towards empowerment. Initially, women widen their contacts and consolidate their links with other women via the meetings. Next, their ability to command and repay loans and accumulate savings is likely to boost their confidence and self-esteem. Finally, the studies in Bangladesh show that participation in credit schemes may result in an improvement in a woman’s status at home and in the community.
54. A number of organisations in South Asia have devised their programmes so as to allow women to take on leadership roles and act as role models, often in non-traditional occupations. BRAC and BRDB provide help and technical training to women who assist professionals (or technical staff in the case of BRDB). The women who receive this help and technical training pass it on to others in the region. In this way, people are trained to provide travelling veterinary and para-legal services. BRAC also offers women training in non-traditional trades such as carpentry, brick-making and silkworm breeding. The AKRSP scheme, meanwhile, teaches women in the community to become specialised trainers, implement new techniques and practise new skills.
55. Income is just one factor in the equation when it comes to assessing the impact on equality between the sexes.
56. This is true because women rarely pursue a rise in income as their sole objective. In addition, other changes, for example those which raise the profile of women and allow them to articulate their concerns, may provide a means of exercising long-term influence in order to improve their situation and achieve greater gender equality. For instance, women in non-traditional roles and trades are challenging established norms and paving the way for future generations.
57. Credit may have an important role to play in the context of wider efforts to raise women’s consciousness and mobilise them. It can serve as a starting point for consolidating women’s networks, increasing their mobility, broadening their horizons, giving them greater self-confidence and raising their status within the family.
58. The women involved act as role models in the village, challenging the prevailing norms regarding the mobility and visibility of women.
III. The implications of this approach
1. Choice of partners
59. The choice of partners, each of whom has particular skills to contribute to the success of the project, is important. A variety of structures can be used, falling into four main categories:
60. Tontines are the most effective traditional mechanism for providing savings facilities and sometimes small loans. Just like local savings banks and mutual benefit associations, they are not linked to large organisations or to the main banks, but operate autonomously for a group of villages or an urban district. They take in members’ savings, and set their own interest rates without reference to the law or the financial markets. They are informal in nature: members lend one another the money saved. They rarely have recourse to the financial market and receive no external aid. The functions they perform are vital. They are perfectly adapted to local needs, and repayment rates are excellent, as everyone knows everyone else and the self-monitoring system means the risk is low.
61. Numerous local savings banks and credit institutions have joined forces in order to obtain credit in addition to that financed by their savings and thus meet local demand, or in order to invest savings that have not been lent out. They have formed unions and federations, some of them quite powerful, e.g. APRACA (Asia Pacific Rural and Agricultural Credit Association), AFRACA (African Rural and Agricultural Credit Association) and the COOCEC and COOPEC cooperative unions and savings and credit unions. In West Africa, national organisations such as Nyesigiso and Kafo Jiginew in Mali, ACEP in Senegal, FCPB in Burkina Faso and FECECAM in Benin, have tens of thousands of members either saving or borrowing, and represent effective and powerful partners in delivering credit to farmers and artisans in the urban informal sector.
62. These unions and federations, then, have millions of members, especially among farmers, civil servants and small traders. They are firmly anchored in the community and are run along mutual insurance lines in order to cover the risks. They provide extensive training for their managers, who often come from local banks, and for their members. They are well run. Rates of interest on savings or on loans to farmers, traders or women entrepreneurs vary according to the circumstances, but are frequently below the market rate. External aid often plays an important role in financing them in order namely to cover their training costs.
63. The past twenty years or so have seen a vast number of foundations, associations or NGOs set up for the purpose of distributing and managing micro-credit in Latin America, Africa and Asia. These organisations act as intermediaries between the funding agencies (development agencies, Northern NGOs, banks, etc.) and the credit applicants, whether individuals or small professional groups.
64. The decline in non-repayable international aid to fund development projects and the channelling of these monies into loans or loan funds to Southern NGOs have led to the emergence, particularly in Latin America, of development foundations (“fundaciones de desarrollo”) which administer loans to local producers or to traders in the informal sector in the town and in the rural area.
65. These foundations and NGOs have played, and continue to play, a vital role in the development of micro-credit, with millions of small producers and traders depending on their activities. The organisations themselves have become very professional and now offer high-quality financial mediation services.
66. Working closely with the recipients and keen to see them progress, these foundations, associations and NGOs are vital to the smooth operation of micro-credit in the South, and now also in Eastern Europe and in some urban areas of the rest of Europe and North America.
67. In the last few years, following in the footsteps of the Grameen Bank in Bangladesh, the major micro-credit foundations and NGOs in several Southern countries have set up their own banks. Constrained by a shortage of funds and often by national administrative rules, and faced with a high level of demand for credit not only from small producers and traders in the informal sector, but also from new and expanding small and medium-sized enterprises, these organisations have promoted financial instruments which - with the agreement of the governments concerned and the recognition of the central banks - have set a trend towards the establishment of formal financial institutions and banks specialising in micro-credit. Several of them manage micro-credit portfolios in excess of 10 million US dollars.
68. Thus, professionals in the micro-credit field have equipped themselves with the financial instruments and banks they need in order to attract and manage people’s savings and, in many cases, offer loans to customers, and to qualify for credit lines from the international development banks or bilateral development agencies. This represents a major step forward.
2. Providing a framework for the process
69. In order for women to have greater control over credit, more resources need to be devoted to management and to perfecting skills, and to social development, opening up markets and changing attitudes regarding women’s financial independence.
70. The focus should be not just on the division of labour, but on the distribution of benefits between the sexes. Three forms of supervision exist:
• monitoring of the funds borrowed
• monitoring of the income-generating enterprise or activity
• monitoring of spending or the use of profits
71. Access to credit can be made subject to compliance with certain requirements geared to long-term development. For instance, a requirement that any children, including girls, attend school is a means of both combating child labour and promoting literacy and education for future generations. In one micro-credit scheme in Egypt, women whose children had been working were granted a loan once the children began to attend school.
72. Approval of a loan may also be tied to compulsory savings to ensure that the borrower has the necessary funds to cope with unforeseen circumstances, or to provide funds to finance future investment.
73. The use to which a loan is to be put is of vital importance in ensuring that it meets its primary objective of raising living standards in a climate of sustainable development. As a result, exclusive focus on household income is liable to give a false impression of impact, as there are costs inherent in development which may affect the entire community.
74. It is important to stress that while social costs are borne by everyone, women and children, who are more exposed, will be affected disproportionately. Preventive action is therefore needed. The costs in question are rarely taken into account in evaluations, but may manifest themselves in the following areas:
• the environment (e.g. a kiln which pollutes the environment)
• health and safety (e.g. a fireworks enterprise which poses a threat to safety)
• an increased workload, producing, at best, a slight rise in income (e.g. more work for women and children, but little control over the income generated)
• repercussions on other activities that are neglected (e.g. less time is devoted by parents to childcare, hygiene and other socially beneficial activities).
75. The best way of avoiding drawbacks of this kind is to offer borrowers advice on how to make use of the loan. That entails taking account of their skills and wishes as well as the needs of the local community.
76. While the aim of micro-credit is to help an individual and his or her family improve their standard of living, this must not occur to the detriment of the other members of the community. Accordingly, providing entrepreneurs with information on the options available to them enables them to employ techniques that are more productive and more environmentally sound. This information should be provided via the NGOs or local associations which are familiar with the situation on the ground, working in tandem with the lending agencies.
3. Evaluating the impact of micro-credit
77. What impact does micro-credit have? Before lending support to any development project, it is important to be sure that it will be effective. There is no doubt that poor people have benefited from micro-finance, for instance through improvements in health care and spending on education.
78. Research shows that households that have access to credit are better able to make use of technology, raise their incomes and increase spending on food, health and education than those without access to credit. Studies show that micro-financial services produce a rise in nutritional standards and a drop in infant mortality.
79. In Bangladesh access to credit through the Grameen Bank has had a positive impact on the use of contraceptives and the emancipation of women.
80. Studies have proved that micro-finance enables poor people to gain confidence and become more familiar with financial institutions. Savings offer the poor enhanced security and a greater capacity to meet pressing needs in times of crisis.
81. Other studies have demonstrated that providing financial services to women helps increase their confidence, their mobility, their access to markets, their independence and their readiness to take decisions.
4. Improved quality of life
82. Taking part in meetings allows borrowers not only to pool their experience, but to talk about the difficulties they face. Thus, the strengthening of collective solidarity serves to promote human rights generally and women’s rights in particular.
83. The impact of micro-enterprise schemes in terms of empowerment highlights the effects on collective solidarity. Examples of collective action abound: the women in MASES, an organisation in Bangladesh, collectively confronted a husband who was beating one of their members. The same group took collective action to settle a dispute with the landowning class in the village, and in the context of the local elections. The programme to develop agglomerates in Sri Lanka grants aid to individuals, and in particular small family firms. However, thanks to the emphasis on community action, members are collaborating increasingly on marketing, community projects and the bulk purchase of consumables.
84. This willingness to work together creates the conditions needed for increasing the involvement of all citizens in public life. People become aware of their rights and seek to have them respected. The desire to have one’s opinions taken into account fosters a mentality that eschews arbitrary action and campaigns for and promotes democracy. This change of attitude benefits women in particular, enabling them to recognise their strength and demand the status that is rightfully theirs.
85. Involvement in the public sphere has also been reflected in action to support wage demands. In some regions, a further means of boosting poor people’s incomes and promoting gender equality consists in lending support to labour movements in the new economic sectors where poor people, and especially women, make up a large proportion of the workforce. In the wake of the liberalisation of trade and accelerated economic growth in many Asian economies, there has been an upsurge in badly-paid work and piecework, both within and on the periphery of the free-trade zones. This phenomenon has both advantages and disadvantages, especially for women. In many places, women’s organisations set up to negotiate fair wages, proper benefits and acceptable working conditions make a valuable contribution to combating poverty and promoting gender equality.
86. Groups of women borrowers should not just act as a forum for discussing issues related to the repayment of loans, but should give women the opportunity to share experiences.
87. These meetings can also provide a means of informing women. Mindful of this possibility, the Grameen Bank decided to become involved in other aspects of people’s lives. This led to the “sixteen decisions”, a list of principles for living designed to guide the efforts of disadvantaged rural communities to improve day-to-day life and work towards sustainable development. The issues dealt with range from the importance of nutrition and hygiene to the education of children.
88. A similar approach would be of great benefit in providing information for poor women in Europe. For instance, meetings of this kind could be used to alert girls in central and eastern Europe to the dangers of forced prostitution. Information could be channelled more successfully to populations in rural areas. Women could be informed of their rights, and given access to training in basic hygiene and diet and other information designed to make their lives easier.
APPENDIX
List of European players
|
Country |
Name |
Address |
Description |
|
Austria |
AFW (Alternativ-Fernwärme GmbH) |
Fleischmarkt 22/2/47 1010 WIEN Tel.43 1 5120147979 Fax 43 1 51201497 7 |
Set up as recently as 1993, AFW is a large investment club, with 240 members contributing an average investment of 10 000 ECU each. The emphasis is on renewable energy and energy-saving projects. AFW differs from traditional investment funds in its policy of investing directly (not in securities) in a handful of model projects, selected on a democratic basis by the savers. Attention is paid to the risk profile of the project and its likely return. At present the bulk of resources is going to fund a pilot project for an innovative high-tech, non-polluting district heating system. Clubs of this kind, concentrating chiefly on environmental projects, have proved very successful in the German-speaking countries (where ten or so new projects are running) and in the United States. |
|
BCI (Barter Clearing & Information) |
Rennweg 17 Postfach 103 1030 WIEN Tel. 222 71788 0 Fax 222 71788 46 |
A multilateral exchange system for SMEs managed through a central clearing mechanism using the system’s own unit of account. It could also operate as a straightforward mutual credit system. BCI was set up in Vienna in 1986 and modelled on an American system. It now incorporates 2 300 small enterprises which exchange the equivalent of more than 40 million euros annually through the system, on the basis of interest-free notional credit. Since 1992, the system has caught on in a number of eastern European countries (Slovenia, Slovakia, Hungary and the Czech Republic). | |
|
Belgium |
CREDAL (Crédit Alternatif) |
16 Place de l’Université 1348 LOUVAIN-LA-NEUVE Tel. 32 10 48 33 50 Fax 32 10 48 33 59 |
Dissatisfied with the use to which their savings were being put, a group of individuals and associations set up Crédal in 1984. Its customer base consists mainly of not-for-profit associations and co-operatives which operate along social economy lines and carry out projects aimed at creating jobs and combating social exclusion. Crédal provides investment loans and bridging loans or working capital. It also supports micro-enterprises started up by the unemployed, and offers advisory services. |
|
HEFBOOM vzw |
Vooruitgangstraat 333/5 1030 BRUSSEL Tel. 32 2 201 04 10 Fax 32 2 201 04 00 |
Hefboom was established in 1985, prompted by similar concerns to those which gave rise to Crédal. Its aim is to attract financial resources and use them to fund co-operative enterprises which create high-quality employment on a sound environmental footing. Hefboom provides loans and equity financing and, since 1991, has offered bridging loans to not-for-profit associations. It has also supported micro-enterprise projects started up by the unemployed, in addition to offering a range of other services. | |
|
SOWECSOM (Société Wallonne d’Économie Sociale Marchande) |
13 avenue Maurice Destenay 4000 LIEGE Tel. 32 4 221 98 48 |
Set up in 1995, SOWECSOM is a State-owned instrument which seeks to promote the development of the market-oriented social economy by part-financing projects in the sector. It provides loans, guarantees and equity financing. SOWECSOM supports commercial ventures only if they respect the principles of the social economy. It is also involved in job creation, mainly for unskilled workers. If necessary, it will also assist in the preparation of a business plan. | |
|
Denmark |
MERKUR |
Vejgaard Møllevej 3 AALBORG Tel. 45 98 10 18 35 Fax 45 98 10 18 53 |
Merkur’s establishment in 1982 was prompted by the difficulties encountered by an organic bakery in securing financing from the mainstream banks. Technically, Merkur resembles a conventional bank, but its lending policy makes it very different. It lends only to individuals or companies which pursue social, “alternative” or environmental objectives. It has enabled numerous ecological companies without access to conventional banks to develop labour-intensive projects. Merkur’s strength lies in its knowledge of the sector and the services it can provide. |
|
AKF (Arbejderbevægelsens Kooperative Finansieringsfond |
Rewentlowsgade 14 1651 COPENHAGEN V Tel. 31 31 22 62 |
AKF was established in 1953 when a number of trade unions decided to pool their shares in co-operatives. It provides mainly equity financing. As a very low-yield holding company, AKF has only limited scope for supporting existing co-operatives or taking shares in new co-operative projects. It maintains close links with the small co-operatives in its portfolio, allowing them to benefit from the skills and experience of AKF staff. | |
|
Finland |
Taku-Säätiö (Guarantee Foundation) |
Yrjönkatu 30 A 00100 HELSINKI Tel. 358 9 644 142 Fax 358 9 644 204 |
Set up in 1990 against a background of severe economic depression, the Guarantee Foundation is aimed at people in debt, particularly those in difficult social circumstances (ex-prisoners, former psychiatric patients, large families, etc.). The foundation was set up using the proceeds from a charity collection. Since 1995, the Social Affairs Ministry and the Gaming Association (slot machines) have taken over the funding. The Foundation’s policy of renegotiating and rescheduling debts has been welcomed by creditor banks. Almost 700 cases have been dealt with to date, involving 2 500 people. |
|
Eko-osuuspankki |
Käenkuja 3-5 L-Porras 00 500 HELSINKI Tel. 358 9 701 1722 Fax 358 9 766 135 |
A. Eko-osuuspankki is a scheme to set up an ethical bank, the launch of which has been held up by the introduction of the new European banking directive. Since 1991, the scheme has been trying to summon the minimum amount of capital required by the Finnish banking authorities, but is still far short of the required threshold. In the meantime, it may invest its capital only in government bonds, while remaining subject to the cumbersome banking accounts procedures. B. The delay has prompted some of the members to launch a pilot project (under a different legal format from that of Eko-osuuspankki) modelled on the remarkable Nettverkskreditt scheme in Norway. This is an experiment in micro-credit targeted at women, based on the pioneering model of the Grameen Bank in Bangladesh. The women are organised into groups of five to act as guarantors for micro-loans granted to each member in turn, while overseeing the development of each project. The first phase began in 1991 with 15 women, and enabled 14 micro-enterprises to be started up in very remote regions. A second phase is currently under way, involving almost 200 women throughout Norway. | |
|
France |
NEF (Nouvelle Économie fraternelle) finance company |
46 rue de la Burge 03160 BOURBONS L’ARCHAMBAULT Tel. 04 70 67 18 50 Fax 04 70 67 18 54 |
In 1987, the association NEF set up a finance company in order to adapt its legal form and technical facilities to cope with the rapid expansion of its activities. NEF’s finance company is a co-operative financial institution which operates all over France. Accredited by the Banque de France, it takes in savings from activists and lends the money to new or developing companies with a clear social vocation which have fallen through the net of the conventional banking system. Since its inception, over 500 loans have been granted and more than 650 jobs created or saved. |
|
Herrikoa |
Résidence l’Alliance Centre Jorlis 64600 ANGLET Tel. 02 59 52 40 30 Fax 02 59 63 71 56 |
This is a public limited venture-capital company based in the northern Basque country which seeks to promote local job creation. Herrikoa provides assistance with capital and current expenditure to companies wishing to start up or expand or which are taken over. It also assists with recapitalisation and capital enhancement. Its funds come from 3 300 local shareholders. In its 13 years of operation, 1 300 jobs have been created in the companies financed. | |
|
ADIE (Association pour le droit à l’initiative économique) |
111 rue Saint Maur 75011 PARIS Tel. 01 43 55 98 94 Fax 01 43 55 98 83 |
Not-for-profit association which provides loans (to a maximum of 30 000 francs) in most regions of France to would-be entrepreneurs excluded from the banking system. It also provides follow-up for fledgling micro-enterprises, with the help of local agencies. In recent years, it has built partnerships with local banks, which manage the financial aspects of the loans while ADIE provides the guarantees and oversees the companies’ development. Funding comes largely from official sources (European Union, French Government, regions). | |
|
CIGALE Chemin Vert (Club d’Investissement pour une gestion Alternative et Locale de l’Épargne) |
179 rue de Charonne 75011 PARIS Tel. 01 49 91 90 91 Fax 01 43 70 38 34 |
Cigale Chemin Vert was founded in 1986 by a group of friends in the 11th arrondissement in Paris. It ceased operating in 1996. This twelve-member investment club took in a proportion of its members’ savings (30 ECU per person per month on average) and fostered job creation by providing equity financing for small enterprises. The aim was to promote greater convergence between savings and investment in the interests of development and economic equality. Ten companies were financed in ten years. There are now about fifty active Cigale clubs in France. | |
|
FFA (Fonds France Active) |
201 rue du Temple 75003 PARIS Tel. 01 44 61 88 50 Fax 01 42 72 47 69 |
FFA is an offshoot of several large institutions including the Caisse des Dépôts et Consignation, and specialises in financial engineering to further social integration by economic means. It invests directly and via local funds set up in partnership with the local authorities, guaranteeing bank loans for companies taking on unemployed people. | |
|
FGIF (Fonds de Garantie pour la création d’entreprises à l’initiative des femmes) |
139-141 avenue Charles de Gaulle 92200 NEUILLY-SUR SEINE Tel. 01 47 45 90 13 Fax 01 47 45 90 19 |
The FGIF is a guarantee fund exclusively for women wishing to set up, take over or expand companies. It is managed by a private agency (IDES) in partnership with the State. Its funds come from a government grant. With funds amounting to 1.4 million euros, it has provided 455 guarantees in seven years. | |
|
Genèse |
3 bis rue Clément 38000 GRENOBLE Tel. 04 76 96 48 27 Fax 04 76 21 40 06 |
Genèse is an open stock co-operative company that pools the savings of the heads of some fifteen small companies which share premises. It provides small loans where they are most needed, with priority given to projects run by members of the co-operative. | |
|
SOCODEN |
37 rue Jean Leclerc 75017 PARIS Tel. 01 44 85 47 30 Fax 01 46 27 44 27 |
SOCODEN is the financial instrument of the French salaried workers’ co-operatives (SCOPs). It finances their long-term liquidity in a bid to support and develop them. It engages in some 100 to 120 operations each year, to a total value of 20 million francs. SOCODEN is funded by means of a 1% levy on the co-operatives’ turnover. | |
|
Germany |
GLS Gemeinschaftsbank |
Postfach 10 08 29 Oskar Hoffmanstrasse 25 44789 BOCHUM Tel.49 2234 30 79 30 Fax49 234 307 93 33 |
The Bochum community bank, set up in 1974, is the oldest of the modern ethical banks such as Merkur, Triodos Bank and NEF. It has 17 000 savers and members. Its main focus is on funding projects in the fields of education, organic farming and renewable energy, with a particular emphasis on pioneering and model projects. |
|
Bank für KMU |
Torstrasse 6-8 10119 BERLIN Tel. 49 30 247 92 91 Fax 49 30 247 92 24 |
Founded in 1994 in Berlin, the Bank für KMU (Bank for SMEs) arose out of a concern for job creation, and is based on the model of the Berlin guarantee bank (Bürgschaftsbank Berlin), from which it sprang. It is funded by four public institutions and a large number of individuals. It makes use of local, federal and European (especially EIB) support programmes in order to provide loans at rates below those of other banks, and fund back-up services. It is also involved in mediation between savers and SMEs. The bank has undergone extraordinary expansion in a short space of time. By mid-1996, it had already financed 700 SMEs, including 200 start-ups. | |
|
Goldrausch Frauennetzwerk e.V. |
Potsdamer Str. 139 10783 BERLIN Tel. 49 30 215 75 54 Fax 49 30 216 98 52 |
A small Berlin-based finance agency run by volunteers and focusing exclusively on women’s projects. Funded by a network of 250 women donors, Goldrausch has financed 200 projects since its establishment in 1982, a large proportion of them start-up projects. The sums invested are small, between 1 000 and 2 000 ECU on average. Some two thirds take the form of interest-free loans and the remaining third are donations. The projects funded receive intensive support, including advice on putting together a dossier and obtaining funding from mainstream banks. | |
|
SHD, Senioren-Hilfe Dietzenbach (Dietzenbach Senior Citizen’s Assistance) |
Friedensstrasse 38 63128 DIETZENBACH Tel. 49 6074 35777 |
An inter-generational clearing system for providing reciprocal services. Under this system, imported from the United States by the Prime Minister of Baden-Württemberg, participants provide services, paid for in units of time, which are entered in a central accounting system. The scheme covers services as diverse as helping out neighbours, care, support for young people, psychological support, driving and help with housework, as well as seminars and leisure activities. There are over 1 000 participants, with an average age of 64. | |
|
Greece |
Lamia Co-operative Bank |
1 Diakou Road 35100 LAMIA Tel. 30 231 460 01 Fax 30 231 460 00 |
Founded in 1900, the Lamia Co-operative Bank has played a leading role in the growth of the co-operative movement in Greece. It provides loans only to members, (over 17 000 from a variety of social and professional backgrounds, but chiefly small local entrepreneurs, traders, the self-employed and artisans, who co-own the bank). Its aim is to draw in local funds and re-invest them by financing local development projects at affordable cost. The co-operative spirit has flourished over time, and the bank is now quite sizeable, with capital amounting to 16 million euros. |
|
Ireland |
Clones & Blessington Credit Unions |
Blessington Co. WICKLOW Tel. 353 45 65328 Fax 353 45 65328 Clones Co. MONAGHAN |
Clones Credit Union, founded in 1959, was Ireland’s first credit association; in the smaller town of Blessington, the credit union did not open until 1973. Few people in either town had access to conventional banking services, including consumer credit, although many of them held an account with one of the banks. The aim in setting up the credit unions was to keep money in circulation within the local community at a time of deep economic recession. Enterprise centres were set up in both towns in a bid to tackle unemployment. These centres enabled many businesses to start up by sharing rent and administration costs. Clones C.U. now has 4 500 members, while Blessington has 3 600. They account for a large majority of savers in their respective communities. |
|
Tallow Credit Union |
Tallow Co. Waterford Tel. 353 58 56289 |
Set up in 1968, Tallow Credit Union is still one of the smallest credit unions in Ireland. However, its pro-active approach to the serious problem of unemployment makes it one of the most dynamic. Its main aim is to allow its members to create jobs for themselves, in particular by providing training in business start-up and management for the unemployed. Where necessary, Tallow Credit Union also provides workspace for people setting up in business. It does not confine itself to passive management of the savings of its 3 000 members. Its strong local links allow it to offer loans based on the calibre of the project and its backers rather than on the guarantees provided. The impact on employment within the small local community is very real, in terms of both directly created jobs - full and part time - and the large number of jobs generated indirectly. | |
|
Beara LETS (Local Economy Trading System) |
Fay, Kilcatherine, Eyeries, BEARA Tel. 353 27 74 147 |
Beara LETS was set up in 1993 following the example of similar systems in Canada. Founded mainly by unemployed people with support from the Irish Government, it is still expanding and developing. It is designed as a mutual credit system using its own units of account (as a clearing system). Management of the system is transparent, with the accounts of each member being published regularly. In addition to helping to reinvigorate the local community, the LETS has served to highlight local needs, particularly as regards services on the ground. Beara LETS targets people on low incomes, enabling them to become involved in the community and in local economic life. | |
|
First Step |
Jefferson House Eglinton Road Donnybrook DUBLIN 4 Tel. 353 1 260 0988 Fax 353 1 260 0989 |
Founded in 1990 at a time of economic growth, but also of high unemployment, First Step is a not-for-profit organisation which targets unemployed would-be entrepreneurs excluded from the banking system. It provides standard interest-free loans over three years and the services of a business mentor, which are compulsory. It is funded by private companies and the Irish Government. Most of its services are provided by persons on secondment from a number of large companies and from a university, who act as mentors. Funds allocated to date total 530 000 ECU. | |
|
ITUT (Irish Trade Union Trust) |
Liberty Hall DUBLIN 1 Tel. 353 1 8787272 Fax 353 1 8787182 e-mail itut@aonad.iol.ie |
A financial instrument supported by one of Ireland’s largest trade unions (SIPTU), ITUT is distinctive in that it is financed by contributions from the trade union movement. It aims to create jobs by funding unemployed would-be entrepreneurs who agree to set up co-operatives. | |
|
Italy |
MAG 2 Finance |
Via Pacini 11 20131 MILAN Tel. 39 2 266 54 74 Fax 39 2 266 805 08 e-mail mag2-finance@compuserve.com |
One of the first alternative financing instruments in Italy, set up in 1980 in response to the lack of transparency of the traditional financial system and its management methods. MAG is a co-operative finance company based on principles of self-management, with the emphasis on: • supporting the development of co-operatives and preserving jobs • start-up assistance for companies • advancing funds for cultural projects. MAG 2 is part of a network of around ten MAGs, which formed the basis for the establishment of Italy’s first ethical bank. |
|
CFI (Compagnia Finanziaria Industriale) |
Via Vicenze 5a 00185 ROME Tel. 39 6 444 02 84 Fax 39 6 445 17 66 |
A financial instrument backed by the three principal Italian trade unions (CGIL, CISL and UIL) and the three federations of co-operatives (AGCI, CCI and the Co-operatives’ League) and supported by the Italian government. CFI was set up in 1985 under Law 49/85 (known as the “Marcora Law”), which was designed to safeguard jobs under threat in industry. The law allows the employees of a bankrupt company to buy out the company, on condition that they run it as a co-operative. CFI funds are topped up regularly from the public purse and used to provide venture capital to employees who buy out their company in this way. | |
|
COSIS (Compagnia di Investimenti Sociali) |
Via Nazionale 39 00184 ROME Tel. 39 6 474 10 83 Fax 39 6 474 11 17 |
A recently-created financial instrument (established in 1995), which differs from the norm in having been set up by a banking foundation, which is the majority shareholder (95%). It aims to finance social co-operatives as defined by Italian Law 381/91 (management of public health, welfare and education services: economic activities to integrate the underprivileged). COSIS is a sizeable undertaking (authorised capital 10 million euros) which has proved highly successful from the outset with the social co-operatives, which have difficulty in obtaining finance from conventional banks. | |
|
Luxembourg |
ETIKA |
55, Avenue de la Liberté L – 1931 Luxembourg Tel/fax : + 352 29 83 53 e-mail : contact@etika.lu |
ETIKA – is a non-profit association, the aim of which is to promote alternative financing and to reflect on how to develop “ethical money” in order to facilitate the access to loans for the initiatives, which make a priority of social and cultural utility of international solidarity and of the assistance to the ecological development actions in Luxembourg and in the South. |
|
Netherlands |
Triodos Bank, Fund for Artists |
P.O. Box 55 3700 AB ZEIST Tel. 31 30 69 36 500 Fax 31 30 69 36 555 e-mail triodos@ibm.net |
In the mid-1980s, the ethical bank Triodos and a not-for-profit organisation specialising in the arts set up a fund to finance artists, who tended to be turned down by the conventional banks and were receiving less and less government support. Most of the loans go to visual artists and musicians for setting up workshops and other workspaces. The fund is increasingly popular with artists. |
|
Stichting Werkglegenheid |
Ir. Driessenstraat 94 2313 KZ LEIDEN Tel. 31 71 514 68 78 Fax 31 71 514 95 54 |
The Stichting Werkgelegenheid (foundation for job opportunities) was established in 1983 by the municipal council of the town of Leiden, to address the problem of unemployment among certain groups (long-term unemployed, the disabled, immigrants, women) whom the local authorities were failing to reach through conventional business start-up channels. The foundation guarantees loans provided by the Leiden municipal bank. | |
|
Triodos-DOEN Foundation |
P.O. Box 55 3700 AB ZEIST Tel. 31 30 69 36 500 Fax 31 30 69 36 555 |
The Triodos-Doen Foundation was founded in 1994 by the ethical bank Triodos and the Doen Foundation, which is funded by the national postal lottery. The Triodos-Doen Foundation is known primarily for its financial support (guarantees, loans and venture capital) to countries in the Southern hemisphere for development co-operation, human rights and environmental projects. However, it also finances projects in the Northern hemisphere which have social added value but are unable to obtain finance from other banks. | |
|
Portugal |
RIM (Micro-enterprise support scheme) |
Directorate General for Regional Development Rua de São Julião 63 1100 LISBON Tel. 351 1 881 40 00 Fax 351 1 888 11 11 |
The RIM micro-enterprise support scheme, launched in 1995, is incorporated within the local development initiatives programme (IDL). Its aim is to develop local potential, create jobs and combat desertification. The RIM programme provides subsidies for investment and job creation as well as subsidised loans. A total of 411 projects had been selected up to September 1996, representing a total investment of around 24.5 million euros. In all, 15.5 million euros had been provided in financial aid, and 1 342 jobs created. |
|
SIR (Regional support scheme) |
Directorate General for Regional Development Rua de São Julião 63 1100 LISBON Tel. 351 1 881 40 00 Fax 351 1 888 11 11 |
SIR provides assistance in the form of subsidies and interest-free loans. The funds are aimed at local development, reducing unemployment and improving methods and techniques for distributing products and services from small-scale producers on domestic and European markets. A total of 1 016 projects had been selected up to September 1996, representing an overall investment of some 250 million euros. Around 125 million euros/escudos was granted in financial aid and 4 780 jobs were created. | |
|
Spain |
Ecos Capital Riesgo |
Vallehermoso 15 10 planta 28015 MADRID Tel. 34 1 593 12 34 Fax 34 1 593 96 95 |
Established in 1993, Ecos is the only venture capital company in Spain specialising in the social economy. It supports co-operatives in both their start-up and their development phases and has three full-time employees. 38 jobs have been created and 112 jobs maintained as a result of seven investments totalling 736 million euros. |
|
Caixa rural de Guissona |
Raval Traspalau 8 25210 GUISSONA (Lleida) Tel. 34 73 55 01 00 Fax 34 73 55 07 88 |
The Caixa rural de Guissona was set up in 1963 by the Guissona agricultural co-operative. It is a rural savings bank which provides soft loans and makes no distinction between its customers, most of which are co-operatives. | |
|
FUNDOSA, foundation of ONCE (Spanish national organisation for the blind) |
Sebstian Herrera 15, 30 28012 MADRID Tel. 34 1 528 20 01 Fax 34 1 528 17 22 |
Fundosa, which was established in 1991 by the ONCE foundation, offers venture capital and interest-free loans to individuals, companies, associations and institutions concerned with employment for and integration of disabled people. The funds are raised by means of a lottery. | |
|
COOP 57 |
Ronda St Pere 56,1-1 08010 BARCELONA Tel. 34 3 268 21 99 Fax 34 3 268 12 30 |
Founded in May 1995, COOP 57 is a Catalan co-operative venture capital society which grew out of the FACCTA co-operative network (independent federation of Catalan co-operatives and worker-owned businesses). It provides support and technical and financial advice on matters relating to members’ economic activities, and helps members secure financing. It aims to create a co-operative savings bank. In its first year, COOP 57 dealt with five requests for financing, four of which were approved, representing a total of around 112 000 ECU, and creating some 20 jobs. | |
|
Sweden |
EkoInvest |
Skarpskjttev 25 15336 JÄRNA Tel. 46 8 551 73041 Fax 46 8 551 73041 |
EkoInvest is the venture capital arm of the Swedish ethical bank EkoBanken. Established in 1994, it currently has only a small capital base provided by private individuals and in part by the projects themselves. EkoInvest finances large-scale community projects aimed at revitalising the local community. One of the host of projects financed is in the Solmarka community, where EkoInvest financed a farm, a school and even a waste-water treatment plant. It finances infrastructure projects by actively involving the local community, in a spirit of eco-development. EkoInvest is well-known in Sweden for financing exemplary projects which even government ministries have used as models . |
|
JAK (Jord, Arbete, Kapital) |
Vasagatan 14 54150 SKOVDE Tel. 56 500 464 500 Fax 56 500 464 561 e-mail dhofford@nn.apc.org |
JAK was created in the 1960s following the pioneering example of the JAK in Denmark, itself dating back to the depression of the 1930s. JAK is a mutual savings society which pursues an ambitious policy of interest-free credit (costs are, however, covered). The Swedish JAKs have seen their membership rise substantially since the early 1980s, reaching a peak of 32 000 members in 1993. In addition to providing loans, JAK also seeks to raise awareness of the role of credit and interest in the economy. On the ground, it operates as a network of small local mutual societies with a high degree of management autonomy. Around 90% of its finance is used for housing, but financing mechanisms for small businesses (also interest-free) are being explored. | |
|
United Kingdom |
Street UK |
Studio 12, Styleworks 50-54 St Paul’s Square BIRMINGHAM B3 1QS Tel: +44 121 230 1060 Fax: +44 121 230 1061 E-mail: info@street-uk.com |
Started in 2000,“ Street UK“ is an micro-financial institution, which provides with loans the micro-enterprises establisjed in the United Kingdom in order to allow the development of their business. |
|
CAF (Charities Aid Foundation) |
Kings Hill/West Mailing KENT ME19 4TA Tel. 44 1732 520 000 Fax 44 1732 520 001 e-mail mhayday@caf.charitynet.org |
Observing that charitable organisations lacked sufficient funds to pursue their activities, the Charities Aid Foundation (CAF) set up “Investors in Society”, an autonomous body, in 1996. Its aim is to increase the resources available to charitable organisations, in particular by improving co-operation and understanding between them and the mainstream banking system. “Investors in Society” operates mainly through loans which it grants after the project has been examined in the light of financial and social criteria. It also stages financial management training programmes for the organisations concerned. | |
|
ART (Aston Reinvestment Trust) |
The Rectory Birmingham B19 3UY Tel. 44 121 359 3567 Fax 44 121 359 6357 |
The objective of the Aston Reinvestment Trust is to overcome the chronic shortfall in investment in deprived inner-city areas, which acts as a bar to employment. ART has been in operation since 1996, and combines investment activities on a commercial and financial basis with economic regeneration efforts. It invests in micro-enterprise, the social economy, housing and energy-saving projects. It also offers back-up services in partnership with other agencies. | |
|
ICOF (Industrial Common Ownership Finance) |
12-14 Gold Street NORTHAMPTON NN1 1RS Tel. 44 1604 37563 |
The original aim of ICOF was to finance workers’ co-operatives. Since 1994, however, it has also lent assistance to ethical and community-based companies, mainly through the provision of loans. These are granted solely to ensure democratic ownership and control of companies, or for the achievement of collective goals. ICOF places great emphasis on providing additional support services to the initiatives it finances. It also helps new initiatives get off the ground. | |
|
PYBT (Prince’s Youth Business Trust) |
18 Park Square East LONDON NW1 4LH Tel. 44 171 543 1234 Fax 44 171 543 1258 |
Set up in the wake of riots spearheaded by young unemployed people, PYBT assists young entrepreneurs from disadvantaged backgrounds, ex-offenders and those from ethnic minorities, chiefly through the provision of loans. These are granted only for projects that have been turned down by the high-street banks, and are accompanied by free support from a business mentor. PYBT relies on volunteers, donations from mainstream banks and companies, and on government and European funding. | |
|
LIF (Local Investment Fund) |
44 Baker Street LONDON W1M 1DH Tel. 44 171 224 1600 Fax 44 171 486 1700 e-mail andrewR@bitc.demon.co.uk |
In 1992 the Department of the Environment agreed to contribute to the financing of an urban and social renewal programme. It put up one third of the funding, on condition that the remaining two thirds was provided by the private sector. The object of this fund, set up in 1994, is to demonstrate that lending to community-based initiatives should not be regarded as a high-risk operation. The fund is still in the experimental stage. | |
|
SCEIF (Scottish Community Enterprise Investment Fund) |
Unit 45, Society Place WEST CALDER EH55 8EA Tel. 44 1506 871 370 |
SCEIF is a grassroots organisation set up within the community in 1989 in response to the failure of high-street banks to meet the needs of community-based commercial ventures. Small loans are provided to community-based businesses which have been unable to obtain funding from conventional banks. SCEIF provides loans and does not offer other services. However, if necessary it can refer people to other organisations within the community. |
Reporting committee: Committee on Equal Opportunities for Women and Men
Reference to Committee: Doc 8893, reference N° 2571 of 26.01.01
Draft resolution unanimously adopted by the Committee on 29 January 2003.
Members of the Committee: Mrs Err (Chairperson), Mrs Aguiar (1st Vice-Chairperson), Mrs Mikutiene (2nd Vice-Chairperson), Mr Baburin, Mrs Bauer, Mrs Biga-Friganovic, Mrs Bilgehan, Ms Castro, Mrs Cliveti, Mrs Cryer (alternate: Mr Etherington), Ms Curdova, Mr Dalgaard, Ms Fogler, Mrs Frimannsdóttir, Mr Gaburro, Mr Goldberg, Ms Hadjiyeva, Mrs Hägg, Mr Juri, Mrs Katseli (alternate: Mrs Damanaki), Mrs Kestelijn-Sierens, Ms Konglevoll, Mrs Korhonen, Mrs Kosa-Kovacs, Mrs Kryemadhi, Mrs Labucka, Mr Mahmood, Mr Mooney, Mrs Paoletti Tangheroni, Mrs Patarkalishvili, Ms Patereu, Mr Pavlov, Mrs Pericleous Papadopoulos (alternate: Mr Theodorou), Mrs Petrova-Mitevska, Mr Pintat (alternate: Mr Branger), Mr Pullicino Orlando, Mr Riccardi, Mrs Roth, Mrs Rupprecht, Mrs Schicker, Mrs Yarygina, Mrs Zapfl-Helbling, Mrs Zwerver.
N.B. The names of the members who took part in the meeting are printed in italics.
Secretaries of the Committee: Mrs Nollinger, Ms Kostenko