This article serves as a basic definition of the corresponding keyword on the site socioeco.org.
The solidarity finance is understood as a financial system which is conceived to contribute, by way of specialised structures and tools, financing services to projects which create sustainable economic development and social integration.
The solidarity finance is a group of institutions which appplies solidarity economy's principles to the financial sector. Some financing organisations with specific statutes provide loans or capital participation to other structures of solidarity (non-profits, cooperatives etc.), or even to those who are excluded from the classical financial and banking circuits. They receive the saving of those who want their funds to be put on the basis of solidarity, acceptingless financial return.
The solidarity finance should be distinguished from Socially Responsible Investment (SRI), which is less demanding and much more developed in terms of its amount, consisting of choosing evaluated businesses to which deposits are loaned in relation to their fulfilling minimum criteria for social responsibility. They are also different from microcredit as they stick to the collective destination, not individual one, of the deposit they collected. The best definition of the goal of solidarity finance is that they try to increase the loantakers' social capital. The microcredit is based on the concept of scale ("micro"), and not of quality ("solidarity"), and is sometimes happy to be an individual palliative to the exclusion from the traditional banking system.
The solidarity finance according to the Solidarity Finance Workshop at WSSE
In April 2001, the workshop Solidarity Finance tried to define the solidarity finance as "a 'label' of ethical, responsible and sustainable finance which can be only applied to a certain categories of institutions which respect certain approaches and methods and will provide services with the aim to reinforce social bonds and to the production of social capital."
A more elaborated definition of solidarity finance has been published at the Proposal Notebook for the 21st Century of the Solidarity Finance Workshop;:
"The solidarity finance is defined as a number of levels such as vision, mission, identity, skills, behaviors ane environment.
- The long-term vision of the solidarity finance is to increase the social capital.
- Its mission is to leverage the financial tool for an equitative and sustainable development.
- Its players are multiple, but, even though each one has different methods and behaviors and acts differently, together, they help for the emergence of a specific identity of solidarity finance.
- Its capacities consist of thinking globally, achieving to make up a federation of individuals and of players around financial activities, to see the needs of each enterpreneur and of communities regardless of their economic and social conditions.
- The service of solidarity finance consists of financing activities and people, within a framework of general interest, overseeing in terms of social capital.
- The solidarity finance works within an environment of poverty, of exclusion and hardship of access to financial services.
The solidarity finance tries to show an answer to three major crises of the society: the crisis between a human and himself/herself, the crisis between people and the crisis between people and their environment. Under these crises, as they reinforce the social capital, i.e. that they make the society match to personal values, the solidarity finance contributes to create conditions of a sustainable development."
Within these two definitions, what distinguishes the solidarity finance from other sorts of finance is its vision and its capacity to increase the social capital. In other words, the solidarity finance is a financing system which increases the capacity of a particular group of people to cooperate and to act together to face with the problem of exclusion from the existing (traditional) financial system and to achieve to a sustainable and equitative development.
- Community Finance: a term popular in United States.
- Microcredit: a term used for those tiny loans given to the financially excluded, such as women in the developing countries.
- NPO Bank: a term commonly used in Japan to refer to tiny organisations whose main activity is to provide small-scale loans (around US$3,000 to 10,000) for social or environmental projects.
Initiatives and Networks all over the World
- INAISE: Global network of solidarity finance
- Grameen Bank: The first Microcredit initiative in the world, located in Bangladesh.
- Japan NPO-Bank Network: a network of NPO Banks in Japan.
- Social Solidarity Bank: in Korea.
- La NEF(France)
- Banca Etica(Italy)
- FIARE (Spain)
- Triodos Bank(the Netherlands)
- JAK Bank(Denmark and Sweden)