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Ethic financing and social investment

Ethic financing and social investment. A European overview INAISE : International Association of Investors in the social Economy.

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Ethic financing and social investment

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  1. Ethic financing and social investment A European overview INAISE : International Association of Investors in the social Economy

  2. Created in 1989,I N A I S E has grown rapidly as the movement of social investors gained importance, volume and visibility in a number of European and non-European countries. 1992 : secretariat in Brussels- to collect and disseminate information on social finance- represent the members and the social finance sector- contribute to research projects2002 : 50 members in 19 different countries

  3. Member organisations invest in the following sectors: • Environment and sustainable development:renewable energy such as wind, solar and hydro-energy; energy efficiency; organic agriculture, food processing and retailing; nature conservation; eco-building; clean technology.

  4. Social economy:co-operatives; community enterprises; employee participation; employee buy-outs; micro and small enterprise creation and development, especially among unemployed, migrants, women. Health-care:health centres; community care; clinics and hospitals; programmes for the disabled; preventive therapies.

  5. Social development: social housing; community housing; employment generation; social services, community transport; charities; community groups and the voluntary sector. • Education and Training:school buildings; training courses; organisational development; alternative schools.

  6. North-South: fair trade; small-enterprise start-ups through micro credit programmes; small business training and counselling; crafts, farming, small scaled- industries. • Culture and arts:artists; exhibitions, theatre; film; dance; local radios.

  7. Members of INAISE : 4 main categories 1. Neighbourhood savings structures 2. Banks 3. Venture capital companies 4. Micro Finance Institutions

  8. 1. Neighbourhood savings structures • collection of savings made locally and investment in local projects • advice the entrepreneur and follow the project through • low or zero interest on the savings  low interest loans • risk is limited : close follow up of the project

  9. Société financière coopérative de la NEF • Collects savings and grants short, medium or long term loans to projects • Support the creation of projects in - organic farming - health care - crafts & business (benefit society in general) - ecology & environment - education, art & culture - social rehabilitation & struggle against exclusion In 1000 EUR

  10. Réseau Financement Alternatif - Netwerk • « cricket savings accounts » • 1987 : bonus of 1% of the total amount deposited on «cricket accounts» • 1999-2002 : fixed bonus depending on the benefit margin of the partner bank • 2001 Netwerk 619,734 EUR • Réseau FA 371 800 EUR • 2002 Réseau FA 190 314 EUR • 2002 : total amount deposited on cricket accounts in Walloon region & Brussels = 44.8 millions EUR

  11. 2. Banks • do not aim at profit : finance sustainable projects + are transparent organisation • banking licence more services • select the project or sector • specific funds : wind fund, solar fund, north-south …. 8 on 10 banks member of INAISE • = 1 491 millions EUR (equity + entrusted funds) = 780 millions EUR (lending)

  12. Resources and lending (31/12/2002)8 banks member of Inaise

  13. 1980 : start of the bank in the Netherlands 1993 : branch in Belgium 1995 : branch in UK 2004: branch in Spain

  14. Investment Funds • Triodos Green Fund : organic farming, renewable energy… • Triodos Added Values Fund: enterprises listed on the stock exchange • Triodos Fair Share Fund: micro finance banks in developing countries • Triodos Renewable Energy Fund: wind energy, solar energy

  15. International Funds • Triodos-Doen and Hivos-Triodos Fund: funding to small banks in developing countries • Solar Development Group: solar companies or individuals in developing countries • Triodos Venture Capital Fund: growing companies (organic food and renewable energy) • Triodos Climate Clearing House: sustainable forestry and renewable energy projects

  16. Total entrusted funds: 729 millions EUR Total lending in 2002 : = 386 587 millions EUR = 2 704 projects

  17. 3. Venture capital companies • CIGALE : • club of 5 to 20 persons - 5 year period • invest their savings (8 - 45 EUR) in equity of small enterprises • network of 110 active Cigales • 1500 members • since 1983 : 1.981 million EUR invested • 2/3 in services - 1/3 in craft industry & agriculture

  18. 4. Micro Finance Institutions • In Europe : * ADIE, WEETU… * Crédal, Mag 2 Finance… • In developing countries : Buro Tangail (Bangladesh)

  19. WEETU (UK) : micro credit to help low income women start up business • Full circle : peer lending • 2 years : 100 persons involved in peer lending groups, reimbursement rate 100% • Training, networking and support • Funds : local authorities, foundations, NGO ’s, European funds...

  20. Research…. • 1997-1998 : Job creation • 1999-2000 : Upscaling social investment • 2001 : Getting the framework right

  21. Upscaling social investment 1999-2000 • Publications : newsletter, conference reports, case studies, book « Banking and social cohesion »… • First European Forum on Social Investment • Discussion list : social banking, sofilaw (legal issues) • INAISEWeb site : update information on member ’s activities, social finance… www.inaise.org

  22. Getting the framework right - 2001 • Partnership with New Economics Foundation (UK). • Good practice of government support measures for local and micro-finance to create local employment. • Handbook : illustrate good practice and provide tools for officials and practitioners to assess the potential of different measures. • Dissemination of the results and network with regional, national and EU officials through a website www.localdeveurope.org

  23. WWW.INAISE.ORG

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