Since the 1980s, so-called solidarity-based financial organisations have followed the social economy trend and developed outside the traditional banking system. Their aim: to offer loan services to poorer people who are shunned by traditional banks and direct the collected savings towards ethical solidarity-based activities. Solidarity-based financial organisations should not be confused with microcredit organisations. Indeed, solidarity-based financial organisations favour a collective approach to saving by basing themselves on the main principles of a social and solidarity-based economy: autonomous democratic and participative management in which the wellbeing of the community and the members of the organisation come before profit. This is Nef’s vocation (new fraternal economy).
To remedy the failings of the traditional banking system.
When the association Nef (which stands for “nouvelle économie fraternelle”*) was created at the end of the 1970s, it aimed to support alternative projects that could not find any backing within classic banking networks. It was an anonymous cooperative company with variable capital and it belonged to its users, savers and borrowers who were called “members”. They each held a social share of the company worth 30 Euros. Some members volunteered and became correspondents: they took part in animating the local life of the cooperative.
Today, Nef has a double activity: it collects savings and distributes funds supplemented by the Banque de France. As in traditional banks, time deposit accounts and savings accounts offer interest rates that vary depending on the length of the investment. The difference is that it allows its members to direct their savings and share the interest with partner structures of their choice that are working for Man and Nature through the “Nature Savings Account” or the “Integration Savings Account” for example.
The bank for the local alternative economy
Thanks to the savings that are collected, Nef has been granting loans to projects according to their environmental, social and cultural use for over twenty years. Its borrowers: companies and associations working in the environmental field (organic field, renewable energy, eco-construction), the social field (local authority housing, social integration, fair trade, rural tourism) and the cultural field (publishing, teaching, the arts), as well as individuals who invest in environmental installations.
Nef is a local retail bank established in the field, and it has four regional delegations in Paris, Nantes, Villeurbanne and Villeneuve-sur-Lot which employ 40 people in total.
The Nantes branch is very recent and was set up in September 2007 to cater for the increasing number of projects that were seeking funding in the Western part of the country. This includes Brittany, Lower Normandy, Pays de la Loire and Poitou-Charente. It represents 15% of Nef’s members and borrowers and has four permanent employees who manage 140 loans.
“Know where your money is going”: a transparent bank
Even if one understands what motivates those undertaking projects to call on Nef, it is harder to pinpoint what the motivation of those saving is. It is often believed that solidarity-based investments aren’t lucrative. “That’s not true” argued Julien le Couturier. “Even though savers earn less interest than in traditional banks, they are sure of the projects their savings are invested in”. The key to development and success of solidarity-based finance lies in this transparency. The number of members increased by 14 % in 2009 mainly through word of mouth and reached 24 500 members including 80 % of individuals.
When we asked Julien Le Couturier about his career and what led him to work for Nef, he explained that he wanted his work to mean something: “I find this activity’s structure appealing. We don’t fund just any project! ”
“Money should be the prime tool for human development but it has become the prime objective for the economy. It now runs the risk of making economic activities lose all their meaning.”
Taking it further
The ethical European Bank
Since January 2008, Nef has been working with its Italian partners from Banca Etica and its Spanish partners at Fiare to constitute the first European Cooperative Ethical Bank, the BEE. The three entities will merge to create the bank by 2013. It will promote a new model of human relations within the economy, starting with financial activities, by giving a predominant role to ethics, the exercising of responsibility and an interest in others. It will not be created in opposition to traditional banks but will aim to show concretely that it is possible to handle the responsibilities of a real fully licensed bank whilst being transparent and respecting people and the environment.