1.8 billion euros have been put into circulation to fund thousands of Italian families and social enterprises. This has meant increased quantity and quality of care services for the most vulnerable; more art, culture and sport as a means to improve the quality of life for everyone; reduced CO2 emissions to protect the environment and health, and more organic products and methods; as well as finance for international cooperation projects and fair trade.
Banca Popolare Etica celebrates its first 15 years of life with these successful results. Founded in Padua in 1999 at the instigation of the main networks of the Italian Third Sector, it has grown steadily thanks to the trust bestowed on it by individuals and organizations who have become members and customers of the first Italian bank that’s entirely dedicated to ethical finance.
The numbers in this success story were delivered on the 4th of March in Rome, at the Sala delle Colonne in the House of Representatives, during the presentation of research on Banca Etica’s social impact, conducted by the ALTIS study centre of the Catholic University of Milan.
A History of Positive Change
Fifteen years ago, few people believed that an ethical bank would survive until today. We have shown that ethical finance works and can channel a strategic resource like savings and loans for citizens and organizations to the promotion of the common good. Today we are not only a solid bank, but we are also continually developing. In 2014 we will open the first Spanish branch in Bilbao, for example.
Since 2008, banks have experienced a period of great turbulence: some are among those responsible for a lasting crisis triggered by overly speculative finance. As a result, banks have struggled to cope with a loss of confidence from investors and growing problems in the real economy. During the same period, Banca Etica has instead experienced a steady increase in confidence from investors and shareholders. Savings and share capital at Banca Etica have grown significantly since 2008. This has allowed us to be one of the few banks that has continued to grant credit to families and social enterprises, with a non-performing loan rate that is a quarter of the Italian banking system’s average.
Assessing Impact
Measuring social impact means measuring the change generated in beneficiary organizations and families through finance and collaboration with Banca Etica. The experimental work with the bank’s key stakeholders has achieved extraordinary results in both Italian and international terms. The study shows that using finance as a tool to connect individual and organization’s savings to finance public projects, generates a positive impact on the community and increases people’s quality of life.
Here are some highlights from the research on Banca Etica’s Social Impact over 15 years:
- provided 23,804 loans to families and social enterprises;
- with a total of 1.8 billion euros;
- 70% of the funding approved by Banca Etica has gone to non-profit organizations (compared to an average of 1% for the Italian banking system as a whole). In recent years, Banca Etica has gradually added some responsible for-profit organizations to its borrowers;
- the interest rates charged by Banca Etica loans to customers (families, non-profit organizations, social enterprises) are lower than those of the rest of the banking system, on average;
- Banca Etica has recorded a steady growth of confidence by investors: in 2013 direct deposits grew by 11% while the other banks’ deposits decreased by -1.9% on average;
- Banca Etica has a much lower rate for non-performing loans than the banking system’s average. At the end of 2013, Banca Etica had 2.02% of non-performing loans compared to 7.7% across the Italian banking system.
Organizations and businesses that have received funding from Banca Etica during these 15 years were issued a questionnaire by ALTIS, which concluded that:
- 63% of borrowers believe that collaborating with Banca Etica has increased their chances of networking. Networking as a way to strengthen and extend the work of many small Italian concerns in the field of civil economy is one of the key characteristics of Banca Etica’s economic vision;
- 62% say that collaborating with Banca Etica has made it possible to enhance their employees’ skills;
- for 52%, turning to Banca Etica has made it possible to create new jobs;
- for 51%, financing by Banca Etica has made it possible to increase their income;
- 44% of the customers funded believed they were able to achieve savings by going to Banca Etica;
- for 82%, a loan from Banca Etica was “necessary” for continuing their activity;
- 47% of the customers obtained a loan from Banca Etica after one or more banks had refused to grant it;
- The loans granted by Banca Etica for the installation of systems for energy from renewable sources made it possible to avoid the emission of over 25,000 tonnes of CO2 each year, with savings to the community estimated at 410,000 per year.
Opinion Piece courtesy of Banca Etica.
