Ethic financing and social investment

A European overview

INAISE : International Association of Investors in the social Economy

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 projects

2002 : 50 members in 19 different countries

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.

Health-care: health centres; community care; clinics and hospitals; programmes for the disabled; preventive therapies.

Social economy: co-operatives; community enterprises; employee participation; employee buy-outs; micro and small enterprise creation and development, especially among unemployed, migrants, women.

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.

Culture and arts:artists; exhibitions, theatre; film; dance; local radios.

North-South: fair trade; small-enterprise start-ups through micro credit

programmes; small business training and counselling; crafts, farming, small scaled- industries.

Members of INAISE : 4 main categories

1. Neighbourhood savings structures

2. Banks

3. Venture capital companies

4. Micro Finance Institutions

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

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

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 EUR2002 Réseau FA 190 314 EUR

2002 : total amount deposited on cricket accounts in Walloon region & Brussels = 44.8 millions EUR

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)

2. Banks

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

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

Triodo

s (Neth

erlan

ds, ..

.

GLS Gem

einsc

hafts

ban..

.

Banca

Etic

a (Ita

ly)

Merk

ur (D

enmark

)

Freie G

em.(S

witzer

land)

Caisse

Des

jardin

s

Ekoba

nken

Charit

y Ban

k (UK)

Total

Resources 2002 (1000 EUR)

Credit 2002 (1000 EUR)

1980 : start of the bank in the Netherlands

1993 : branch in Belgium

1995 : branch in UK

2004: branch in Spain

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

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

Total entrusted funds: 729 millions EUR

Total lending in 2002 : = 386 587 millions EUR = 2 704 projects

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

4. Micro Finance Institutions

In Europe : * ADIE, WEETU…* Crédal, Mag 2 Finance…

In developing countries : Buro Tangail (Bangladesh)

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...

Research….

1997-1998 : Job creation

1999-2000 : Upscaling social investment

2001 : Getting the framework right

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)

INAISE Web site : update information on member ’s activities, social finance…

www.inaise.org

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

WWW.INAISE.ORG