Ethical and solidary financial services

Sunday 5 June 2016, by miquel

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A. The main facts about the activities of the company.

Coop57 is a cooperative enterprise founded in Catalonia in 1995, but the idea of this cooperative started in 1986 when a group of people began fighting for maintaining their work in the Bruguera Editorial. The group of workers created a fund with the compensations when they leave the editorial, and the cooperative started running since nowadays.

The activity of Coop57 is based on give ethical financial services and the principal objective is to contribute with a positive social transformation in the economy and the society. The function is financing projects centred in social economy trough financial issues, and could be described as the collection of savings from society and use those for the creation of entities that promote more jobs, cooperativism and sustainability with an ethical base.

Coop57 is organized as a network with a horizontal structure based on participation of the different independent areas in Spain that they work with. Territorial areas where everyone has their own structure and social bodies compose this structure, having their principal operations in Catalonia, Madrid, Aragon and Galicia.

They only provide financial support to organizations or people that give an added value for the environment and for the society. This fact develops their 6 ethical principles in which they run the organization:

  • Coherence principle: based on not giving financial support to entities that could promote activities such as arms industry, nuclear plants, violation of human rights, child exploitation, etc.
  • Compatibility principle: actions that include both financial and social returns. They do not want to maximize profitability without actions that help society.
  • Participation principle: every person that is inside or around Coop57 could participate (people and ethical businesses).
  • Transparency principle: based on publishing a list twice a year with all the loans, the name of the business, the finality and duration.
  • Solidarity principle: all the money is due to the construction of a more ethical and humanitarian society.
  • Reflexion principle: always thinking about the principles that run Coop57 actions and never forgetting their values.

B. The Ethical challenges this company is addressing.

As Coop57 is a company that works in the banking sector, it is clear that their source of profits will also be their source of the ethical challenges. Even if they work with radically different approaches than the rest of the companies in the same sector do, their only way of making money is by loaning, with all the problems associated with that practice.

It is obvious that there is a conflict of interests between loaning money and being ethical while loaning that money. If one wants to maximize the loans (by which profits are received) then it is mandatory to lower the minimum requirements to access those services, as well as to make an aggressive campaign that will result in a very dangerous ratio of “Loaned money”/”Reserves”.

To address these ethical challenges, the cooperative uses different approaches that work together in the same direction:

  • To be able to access the services of the cooperative you have to become member, with a mandatory sum of contribution to the reserves of the cooperative. This limits their potential number of costumers to those that are looking for something else apart of only money.
  • The amount of financial services they offer is very limited and restricted to social projects or entities, which by itself limits the “potential commercial success” of their products, eliminating by design any temptation to go through the “commercial success” route.
  • The profits obtained are always injected in the reserves of the cooperative no matter what, eliminating the “profit seeking” attitude associated with traditional companies.
  • To address the ethical challenge involved in the loaning process they change the approach to financial requirements when asking for a loan, from one big patrimony to a lot of small contributions. For them the most important thing is the social issue behind an idea, because that way they are sure a failure will not end up becoming someone’s “financial end”, but a very small, assumable loss for the supporters. Because of this approach they limit the potential market of projects asking for their loans while also improve the reliability of the return of those loans to levels no other “traditional bank” is able to achieve.

C. What makes you believe this company is really ethical and why you trust it?

The main reason why we believe that this company is really ethical is because it only accepts projects that meet certain conditions such as;

  • The project should help to build a more cohesive society.
  • It should create stable jobs.
  • It should distribute surplus according to the labour contributed.
  • It should have a social interest purpose.
  • The project should be rooted in the territory.
  • It should offer sufficient capacity to make the return of the loan requested.

Taking those conditions into account it can be seen that it only collaborates with projects that do not only act for the sake of profits but also have an incentive to act ethically.

Another reason that makes us trust in their ethical beliefs is their way of ensuring the loans provided. Its guarantee system is not like the one used in conventional banking, which claims for property guarantees. Coop57 does not want to expropriate the belongings of their partners. Instead, they have a system of personal guarantees. This system is characterized by using as a guarantee the maximum number of members of their environment in order to make them become the assurance of a small part of the loan to be returned. As a consequence, it is clear that its main objective is not to grant credit only for those who have an assurance to return it but to provide it for those having a good project no matter if they can assure its return with properties or not.

Baring in mind the reasons provided, we trust this company because it has demonstrated that they don’t want to be a bank; they want to be a tool to promote social and economic solidarity.

D.The possible challenges facing the company in the future and how you think this company may improve.

One of the challenges that Coop57 is facing it is about the decision of the relationship with local administrations. The core of the debate is if this entity has to collaborate with little public administrations that are trying to do better policies than in the past (e.g reforming infrastructures for an optimum use of energy).

Coop57 have demonstrated that one of their strategic objectives is to ensure the solvency of the entity. Probably one of the future improvements would be to reach outside of social economy that Coop 57 is a safe and profitable financial product for your savings, not only ethical. For example, they could take commercial advantage from the rest of the financial system explaining the management of their little benefits. All are re-invested to improve the solvency of the entity.

Coop57 has taken an important job working with other ethical financial entities like Fiare, Fets, Caes and OikoCredit. Probably a way to be stronger and show an image of solvency to the customers would be improve the size and the collaboration of inside the network, so, improve the horizontal integration.


Location: Barcelona (Spain)

Sector: Financial and insurance activities

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