The terms “solidarity-based finance”, “socially responsible finance”, “social finance”, etc. have their nuances, but basically all refer to the same thing: finance that operates in the general interest of society. To be more accurate, and as Finansol, the French leader in solidarity-based finance, defines it, it encompasses savings and investments that support “activities with a high social and environmental impact”, making it possible to “create jobs and social housing, foster development in the South and build environmental projects (organic farming, fair trade, etc.)”. This branch of finance has been progressively coming out of the “militant closet” to reach more and more citizens and investors; its aim is to keep developing, by showing people how their savings choices or investment strategies can help build better living conditions for others.
The boom of solidarity-based finance
Solidarity-based finance starts with one investor’s, or one bank customer’s, desire to support responsible projects. As an investor, you can chose to become a shareholder of a solidarity investment fund. As a bank customer, if your bank offers such an option, you can chose to donate a part of the interest from your savings to an NGO or a small socially responsible company. Money collected in this way contributes to projects in four main fields: employment, social issues & social housing, the environment and international solidarity. Finansol believes that this approach – to savings in particular – directly challenges the system we live in:
In contrast with the traditional financial system where citizens’ savings are too frequently invested in opaque ways and in projects whose sole purpose is maximum profitability, solidarity-based finance is different in that it places mankind back at the heart of the process. Money is no longer considered an end per se, it becomes a tool to be put at the service of socially-responsible projects.
As François de Witt, president of Finansol, explains, solidarity-based saving is really a compromise between giving and saving. It is an act of generosity as well as a way of safeguarding your future: it really means saving up for yourself and for others.
And, in these times of crises and uncertainty, it is an approach which attracts more and more people. They are proving to be more generous and anxious to help build a better world; in some ways, the financial crisis created a temptation for people to withdraw and become isolated, but at the same time also made finding new solutions, and thus opening ourselves up to the world, more urgent. The figures speak for themselves: since 2002, in France, solidarity-based savings alone have facilitated the creation or consolidation of over 200,000 jobs, supported nearly 83,000 companies, housed 35,000 people and funded 1,000 solidarity projects abroad, in more than 70 countries. Such schemes have also provided excellent support for the production of renewable energies and the development of organic farming.
In ten years, solidarity-based financing has increased eight-fold, with an average growth rate of 30%!
Finansol itself certified 33 financial products in 2002, 128 in 2011, and counting.
Although its roots stretch back before the time of multiple crises, solidarity-based finance is really to be understood in the general context of « we are looking for new solutions that will help us keep our faith in the future ».
Unfortunately, not everyone wishes to or can afford to contribute to solidarity-based finance. And mere solidarity cannot be the sole answer, because long-lasting profitability has to be achieved without relying on it. But it contributes to building a world where selfishness is a little less of a value, and social innovation a little more of a goal.
Photo © Shutterstock / Singkham
 Finansol is an association dedicated to the promotion of solidarity-based finance. It was created in 1995. Since 1997, it has been certifying solidarity-based financial products to help identify investment and saving options which support activities with a higher social and environmental impact.