This is a CTP of initiative: FEBEA/Fiare (Spain)
This turning point refers to the agreement established between Fiare and the Italian credit cooperative Banca Popolare Etica (BpE) which led to the consolidation of the Fiare project after two years of existence in Spain.
Fiare is a grassroots innovation initiative created in the Basque Country in 2003 and born with the aim of creating in the Spanish context an ethical bank with a cooperative base and ruled by citizens, able to finance social transformation projects.
In 2005, Fiare signed a collaboration agreement with Banca Popolare Etica through which Fiare becomes the financial agent of BpE in Spain. This event was a turning point for Fiare due to a fundamental reason: thanks to this agreement, Fiare was able to start working in the field of financial intermediation, taking a very significant step towards the establishment of a Spanish ethical bank.
Until 2005, Fiare was a foundation made up of thirty entities from the social and solidarity economy that had been collecting social capital with the aim of founding a bank, but which were until then unable to do so. From the 2005 agreement, Fiare launches its financial activity, collecting savings and lending to economic activities with a positive and economically viable social impact.
At the national level, we had to collect social capital from people and entities and at that time was the important thing. But we had to decide whether we would only raise social capital, without doing anything else until we reached the amount required by the Bank of Spain, or if we began to act as a bank instead. As a starting point we decided to make an agreement with Banca Popolare Ética. At the time we made the pact with Banca Popolare Ética, we did not have the same conception of the project that we have now. At first, the agreement with BpE is an instrument to help us to operate financially in Spain. Fiare operated as an ethical banking agency ... although our goal was to become a Spanish banking institution
This initiation in the financial market was also a learning process, especially for the Fiare leaders in each territory, involving also the structuring of the initiative. Thus, working groups and ethical commissions were created which will assess the granting of the first credits, mainly in the Basque Country, Navarra, Catalonia and Madrid.
Such financial activity is carried out alongside with the slow expansion of the Fiare project across the whole Spanish territory. Fiare actively collected the necessary social capital to establish a bank, according to the requirements established by Spanish legislation (at that time were 6 million Euros).
From 2005 to 2014 we granted credits in all the territories of Spain, was what allowed us to take the sufficient number of customers to do banking operations, even with some difficulties, because doing them on behalf an Italian bank was very complicated. We had to apply Italian regulations ... all the credits were authorized in Italy ... there were risks that were analyzed from Italy, realities that they did not know well because they were not close, and all this has its difficulties. The processes were slow but, even considering all these difficulties, it was the best way we had to be able to act as a bank following our principles. Both for the attraction of savings and the granting of credit. And we did it with a credit cooperative that fully shared our values and vision: cooperativism, transparency, construction from citizen networks, etc. It was significant because it allowed us to start acting as a banking entity
This CTP has positively influenced the impact of the initiative on the territory, meaning that after two-three years of existence it was able to finance projects of social and solidarity economy in the Spanish territory, which contributed to the initiative's visibility and reputation, and favored its growth and expansion.
Nonetheless, although the interviewee considers that Fiare would eventually reached the same goal without the agreeement with BpE, building alliances at the international scale has also become a positive output:
I think so, that the capital demanded by the Bank of Spain would have also been obtained. Of course we would have reached 6 million euros. Yes I think so. But I do not know how long would have taken us. But the question is not so much to reach the volume of capital autonomously, but to consider the opportunity to build alliances at the European level, which strengthen us and reinforce our mission. And that is what we have done
Two main actors have favored the co-production of this CTP. On the one hand we find the leaders of the FIARE Foundation, created in 2003 by 52 entities (NGOs) belonging to the social and solidarity economy sector in the Basque Country. Despite the years of economic boom in the early 2000s, there was a shared perception across the Basque society that banking activity was not conductive to equity, social cohesion or sustainability. The founding entities identified the risks of commercial banking practices that the economic crisis of 2008 would afterwards highlight.
In addition, there was an emerging European ethical banking movement, with which the founders of Fiare contacted from the outset. Through FEBEA, the European Federation of Ethical and Alternative Banking, Fiare will establish contact with other long career ethical banking initiatives such as LANEF (France), Credal (Belgium) or Banca Popolare Etica (Italy), creating trust ties that will give rise to the first agreement with Banca Popolare Etica, the Italian cooperative based in Padua, to which this CTP refers.
A second important player is Banca Popolare Ética, headquartered in the city of Padua (Italy), which has been operating as a credit cooperative since 1999. BpE is experiencing a period of expansion across the Italian territory, having also contributed to the founding of the network European FEBEA (2001).
The leaders of both initiatives agreed that the relationship between Fiare and BpE went beyond economic benefits for both parties, since both entities shared a common vision on finances and economy, a cultural positioning with common roots, as the current president of Fiare Banca Etica, Ugo Biggeri, explained a few years ago in an opinion article [1]:
"I believe that the vision of an ethically oriented economy and finances is what links us together. This cultural positioning sees as central the role of non-economic relations in financial activity: the point of attention to the social, environmental and cultural consequences of financial action. This view finds cultural stimulus and roots in critical consumption experiences, in the global and intergenerational view of the ecological issue, in academic studies on the civil economy and in the thinking of some of the Nobel Prize winners who have worked on the importance of relationships and participatory processes in economic issues. The relationship between our social realities starts from a vision that unifies economic operability with social relations networks, which is expressed through the capture of social capital. A relationship that also translates into a typical from civil society "political" position, rather than one you could find amongst financial intermediaries. We are united by an original background vision that must be made operative with innovative methods in the relation with our clients; in the saving side as well as in the credit. The 12 years of Ethical Banking in Italy demonstrate that ethical finance is possible, a route that Fiare has taken both ideally and operationally and that should lead to a structured reality over the territory" (Biggeri, 2011).
Third, there are a number of external actors that have contributed to the realization of this CTP. Firstly, the financial regulations that establish a series of highly restrictive criteria for the creation of a credit cooperative in Spain, such as raising 6 million euros in capital. These institutional barriers will motivate Fiare to seek out experienced partners in its European environment, to provide them with advice, as the interviewee explains:
There are added difficulties. For example, The Bank of Spain does not guarantee that if you have the 6 million euros you get the license ... You can reach 6 or 20 million euros and the decision of the Bank of Spain to give you a license is discretionary, that is , they can always deny it, because the decision is theirs. The Bank of Spain establishes a necessary minimum, but not a necessary minimum
References:
[1] FIARE (2011). 2010 Annual Report. Retrieved from: http://www.setem.org/setem_ftp/euskadi/FIARE%20MEMORIA%202010%20castellano.pdf
There are a number of events in Fiare's history directly related to this critical turning point. The first to be mentioned is the creation of the Fiare Foundation in 2003, after several years of preliminary discussion among representatives of these groups, to launch an innovative model of banking, which in the European context was known as "ethical banking ". In the beginning, the objective was to create a Basque Country based bank, although with an European orientation.
The project was initially Basque, with a strong identity in that sense. But soon it spread by the rest of the territory, exerting a very strong attraction to other territories, thing that gave the necessary dimension for its viability and wealth
Since its inception, Fiare partners will design a "road map" that consisted of the elaboration of an entity's Feasibility Plan and its implementation, anticipating the initial support of an European partner (which will eventually be BpE). In 2004 Fiare started to implement its territorial extension plan, integrating different networks and actors of the social economy of the territories with greater cooperative tradition, adding several movements like the environmental one.
Fiare emerges in other territories of the State following a "bottom-up" model, based on the creation of regional affiliated associations, which will join the Fiare project. The interviewee insists that the attachment to the territory has been key to extend the project to the rest of the country:
One of the things taken as an added value of ethical banking is the rooting in the territory, taking into account the territory for the construction of the project, because Fiare is built from the local. And that obviously involves promoting the particularities and diversity of each territory of Spain. A huge effort is made in this sense. The Web is in four languages. Internet banking service is four languages, communications, statutes, the social balance, important and not so important things are all translated in four languages (1)
A third related event will be the attempt to establish, during 2010-2012, an European credit cooperative that would initially consist of three entities that shared common values; Fiare (Spain), Banca Popolare Etica (Italy) and La Nef (France). Finally, this project did not see the light until 2012, then Fiare and Banca Popolare Etica will reach a new agreement whereby both institutions will merge into a single one - which will be called Banca Etica - and will enable Fiare to operate in Spain as a Spanish bank.
I remember that, in 2011, we started to talk about a European, ethical bank cooperative. We even started to explain things differently. We were no longer a national, Spanish cooperative project but it was an European project in which, at first, three banks operated. Banca Popolare Etica, Fiare and a French entity, called La Nef, which is not a bank, which in fact is a cooperative that works with the Credit cooperatif bank... There was a European project formed by three banks. We shared values, principles, etc. etc. This was a change because from the idea, the size of a national bank we passed to an European bank and that was a shift in our of discourse compared to which we had been communicating previously
(1) N.A. Fiare´s Website is available in 4 languages: Galician, Catalan, Basque and Spanish.
The interviewee did not find any expression of explicit opposition to the decision that gave rise to this CTP. The decision to establish a cooperative relationship with the Italian cooperative BpE is perceived as the most suitable alternative in order to carry out banking activity in Spain without having to wait to accomplish all the requirements established by the Bank of Spain for establishing a bank. This opinion seems to be widespread across the social base of Fiare, which, in 2005, is still quite small.
The agreement with BpE is also the result of a previous relationship with the Italian partners. The leaders of both initiatives were establishing bonds of trust, creating the right conditions for this turning point. However, the consolidation of the relations between the two initiatives has not been without difficulties.
Despite the goodwill and the core values and principles shared by both entities, the interviewee mentions that there was certain concern that the integration would lead to losing the own identity or autonomy in decision-making. This concern was especially manifested when the project management changes and the constitution of the new European credit cooperative becomes a reality:
Of course there was concern and there is still this concern. Some members, we have said, have had the feeling that this project is half Italian and that comes from outside to a certain degree, this feeling exists. And it has to be taken into account too that Spain is another country, with other realities, and so on. And we have to continue working to unite the different realities and respect the way of being, the autonomy of each one ... this feeling continues to exist and is one of the issues we have to work on
Everything seems to indicate that the lack of answer or criticism to this CTP is motivated by the trust of the partners in the people who led the project more actively, who had the broad support of the social base. Secondly, this CTP has enabled to maintain the fundamental principles and values of the Fiare project, while allowing greater visibility of the social transformation capacity of ethical banking, as the interviewee explains:
The mission has not changed that much, the mission has always been the same. No change of focus has occurred. We are an European project, but the background of the mission has never changed. This seems to me important to highlight, because you can look for other alliances, other strategies but the mission is the same ... the mission is the social transformation through credit. Put another way: promote and be the engine of social and solidarity economy ... be a lever of social transformation, in alliance with other networks, social movements…I think that has been maintained over time
Most of Fiare's partners were able to anticipate the agreement with the Italian Banca Popolare Etica cooperative would become a turning point for the initiative. Despite the inherent difficulties in the process, both banking and external (Fiare became an agent of a foreign bank), this agreement would allow them to learn, mature, grow and expand in the territory more quickly and more effectively:
It was the best option to work by granting credits. I cannot give bank loans if I do not have a bank license. Raising 6 million of social capital without doing banking activity ... that would have given us a very bad name, because if we had only collected capital, we would have been a bank project that was not a bank. With the agreement we were able to raise savings on behalf of an Italian bank, we were an agency of an Italian bank. We were legal representatives in Spain of Banca Popolare Etica. We were the commercials of Banca Etica in Spain. What did that allow us? It allowed us to have a bank license and to capture savings and also allowed us to give credits. In fact we have given a lot of credit with this structure.
As the Fiare project consolidates and is able to perform some banking activity, on behalf of BpE, it increases the perception among Fiare's partners that the 2005 agreement was a critical point. In this sense, the interviewees talk that the agreement favored a change in the strategy of the initiative. In addition to growing the social capital funds, Fiare expands its model to all regions and autonomous communities of Spain, opening offices in the cities of Bilbao and Barcelona. Likewise, this agreement will lay the foundations for the creation of a single cooperative, which will materialize in the period 2012-2014.
Then in 2007, 2008, 2009 we saw the growth we had in banking, savings and credit operations and saw the growth we had in social capital. And we realized that this, (N.A. the interviewee refers to the 2005 agreement between Fiare and BpE) is the first turning point. I think it has been very important. Nor has there been much talk about it, but I think this is so ... I also think that changed the whole strategy of the whole project because collecting 6 million euros of social capital, with 300 € contributions was not easy
The interviewee has drawn a series of lessons derived from the collaboration process with the Banca Popolare Etica initiative and the work that the Fiare initiative has been developing in Spain during the next years. The first is related to networking and the necessary union between people and groups that share similar worldviews, to be able to counteract dominant discourses. Working in a network an alternative discourse can be built:
Everything has its difficulty. Is not easy. I would recommend to everyone the process we have done. The key is to have enough support networks that push and move the project. Having also enough people, capital, and organizations is paramount. If you have it, of course you are successful. We are a small bank. In the banks league, we are a small project. Then, the union with others who share our vision, goals, etc., reinforces us, both politically and economically. And, of course, always respecting the language and territorial differences that exist
Secondly, it is important to remain faithful to the values ??and roots of a project that is born "from below" and starting from "zero". This implies that the partners must maintain the perspective on the real dimension of the project - in relation to the capacity of impact that the Fiare has in each moment -, and to value the achievements met.
I have learned from all this that we always have to place ourselves at the origins of who we are, that is, we have to be clear why we are here, why we have come here and why we are doing this. That is to recognize that we are a social transformation project which has been built without resources, from scratch, with very small contributions from many people, from the citizens, and we have built ourselves in circumstances, in a way and with a mission, all with modesty, which today is heroic. What Fiare is doing is epic. I tell you seriously. We have to place ourselves in that context
Thirdly, the interviewee highlights the learning that the most active people in the project have experienced from the point of view of banking practice, which the 2005 agreement has allowed. It should be noted that most of Fiare's partners and partners, as well as some of its pioneers, did not have previous banking experience or specialized academic training in these areas.
For this reason, since the creation of the Fiare Foundation, the implementation of the project has entailed a process of learning and high specialization in financial, legal and banking among others. For this, Fiare had the backing of the experience of Italian allies, but it has been mainly a process of "learning by doing".
In particular, the interviewee focuses on the communication aspect: knowing how to effectively convey the discourse of ethical banking to all citizens has been a challenge. In particular, emphasis is placed on the need to learn from their own mistakes to define a communicative strategy capable of transmitting optimism without generating false expectations in the associates to avoid frustration:
One learning that has derived from this is the ability to communicate; communicating with humility. We do not have to play in the same league of banks, to compete for the interest rate we offer. Do not forget that we are a transformative social movement. Then we have to identify with our vision permanently, not to lose the north when we communicate this and to know how we communicate it. We have to improve and not make mistakes we have made in the past. Because this model, and this bank, and everything that Fiare has done, has a lot of value, and we have to communicate it by putting in value what has been done by knowing how to explain to people why it has not yet become further. And I think if you explain it everyone understands. It is to return to the origins and to be clear about what we are. It is the learning that I believe must be done
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