Ethical finance is no longer a niche phenomenon, and neither is microcredit. The characteristics of the latter, however, vary widely between eastern and western Europe.
In December 2017 Finanza Etica (Ethical Finance) published a report on “Ethical and sustainable finance in Europe”. It represents the first effort at the European level to “call the numbers” – as the authors write – of the phenomenon. They have two objectives in mind: “To demonstrate to those already investing sustainably that the Indian reservation they imagine themselves enclosed in is in fact more open than ever, and continuing to grow and occupy new spaces. And secondly, to explain to those who’ve never heard of it that ethical finance differs greatly from the more predatory forms of finance, but also, in spite of this, allows for the conservation or augmentation of their savings’ economic value over time, and adds to their bank statement a series of other values, such as respect for the environment, fighting climate change, and the rights to housing or healthy food”.
To cite just one figure from the research, it emerges that the value of activity relating to the ethical and sustainable finance sector in Europe amounts to 715 billion euro: almost 5% of the EU’s total GDP.The report also includes a thematic elaboration on microcredit – a sector of ethical finance – which presents interesting data on the situation in an enlarged Europe. Microcredit is more usually associated with the southern hemisphere – or with countries, like those in south-east Europe, emerging from difficult transitions or even conflicts – but it also has a significant presence in the west of the Old Continent. In EU member states too this instrument responds to problems of banking exclusion, which are far from being overcome.
The source of the most exhaustive data on the topic is the periodic monitoring performed by the European Microfinance Network and the Microfinance Centre (EMN and MFC) – the two principal networks that bring together the bodies concerned with continental microcredit. The data reveals that 60% of entities involved with microcredit are non-banking financial institutions (half of which operate in two countries: Romania and the UK), and another 31% are NGOs. The remaining 9% is shared between cooperative banks, commercial banks and government bodies. However, it is the commercial lending institutions, together with non-banking institutions, that lead the way in terms of the quantity of active clients and portfolio values.
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