Transfer of know-how within the study visit of the AFIN team within the Etica Bank from Italy
AFIN representatives participated in a virtualstudy meeting with the team of Etica Bank from Italy, one of the most important ethical and social financing banks in Europe. Founded 22 years ago, the Etica Bank in Italy has extensive experience in microfinance, offering to date loans totaling over one billion euros.
Taking place at the initiative of the European Federation of Ethical and Alternative Banks (FEBEA), the virtual study visit took place within the project AFIN - Romanian Alternative FINancing Institution and aimed to stimulate the transfer of know-how and the discovery of good practice models in Europe.
The Etica Bank is a cooperative bank operating in Italy since 1999 and in Spain since 2014. The institution operates as a popular bank, being set up by the capital contribution of thousands of citizens and hundreds of non-profit organizations. Initially, the bank specialized in microfinance, being guided by the principles of ethical financing: transparency, efficiency, involvement, etc. The bank is currently owned by 44,000 citizens and social organizations, guided by the mission to build an inclusive and equitable society.
"At the territorial level we have 87 groups of active members, which guarantee for the maintenance and development of local relations and the promotion of ethical financing. At the same time, these groups contribute to building the strategic orientation of the bank "said Gabriele Giuglietti,Director of International Relations Banca Popolare Etica Italia.
Social and financial evaluation
With deposits worth around € 2 billion and loans worth € 1 billion, the Etica Bank has become one of the largest social finance institutions in Europe.
Its operating model is based on multiplying the social value of money. "Each application is analyzed from two perspectives: social and environmental assessment, respectively economic and financial sustainability. The social analysis is performed by a group of independent volunteers, specially trained and prepared. For each project, they follow a series of parameters, which take into account aspects such as working conditions, gender diversity, management model, use of renewable energy, commercial practices, etc. If the evaluation is negative, we do not offer the loan ",explains Gabriele Giuglietti.
The Etica Bank invests in small companies, social organizations, focusing on the social and environmental value of enterprises. Transparency is one of the most important values of the organization. Periodically, reports are published on the bank's financial situation, investments or the destination of loans.
According to a study conducted by the University of Milan on the impact of loans offered by the Etica Bank, almost 50% of the institution's customers were previously rejected by other banks. The same report shows that 80% of the beneficiaries stated that the loan was essential to continue their activity.
"The most important thing is to get to know people, because that is our main guarantee. We want to see that we share the same values. In a way, we're more auditors than bankers. Even though most of our customers say that they have been rejected by the banks, our default rate is one of the lowest in the market. Our portfolio is thus very risky ",states the representative of the Etica Bank.
The minimum amount to become a member of Etica Bank is 300 euros. The bank does not distribute dividends to its members.
"Such study visits are essential for us to find out what are the social financing mechanisms implemented by FEBEA members and partners. Such meetings create mutual learning contexts, help us learn about funding models and tools already used in the EU and beyond. This is essential in order to be able to design the package of products and documents necessary for the establishment and operation of AFIN",said AFIN representatives.
Start of submissions to become AFIN stakeholders
Consorțiul format din Fundația „Alături de Voi” România, FEBEA – Federația Europeană a Băncilor Etice și Alternative și Patria Credit IFN au lansat înscrierile pentru participarea la înființarea AFIN IFN SA – prima instituție de finanțare alternativă cu capital românesc, dedicată exclusiv sectorului de economie socială.
AFIN IFN SA will be established in Iasi and will be a loaning instrument dedicated exclusively to social enterprises and NGOs developing inclusive projects for a green and fair community.
AFIN IFN SA will be officially established in April 2022, with a minimum opening capital of 200.000 Euro and the contribution of at least 100 stakeholders. The minimum amount to become stakeholder in AFIN is 1.500 lei. The first loans will be granted starting with July 2022 and it is estimated that at least 25 loans will be granted during the first year of activity, reaching 170 loans in the fifth year.
If you want to learn more about how to become AFIN stakeholder, which are the necessary conditions and documents, please access directly the AFIN website.
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The study visit took place within the AFIN – Romanian Alternative FINancing Institution Dedicated to Social Enterprises VP/2019/015/0035 project, financed by the European Union through the European Programme for Employment and Social Innovation “EaSI” (2014-2020).