The international Conference 2015
Malcom Hayday was there and he reports:
Cumbre Mundial de Finanzas Solidarias
Peru 13-14 May 2015
Some 230 people from 20 countries around the world gathered in Lima to share experiences and to learn from each other whilst demonstrating local approaches to a global vision of a world which is both inclusive and equal. The Cumbre was co-hosted by Peruvian apex network, Fortalecer, international network, INAISE, and San Marcos University.
Delegates were exposed to all sorts of innovative thinking and practice in social and solidarity values based finance from our host country of Peru to the west coast of Africa and beyond and for those who stepped beyond the conference venue there was also a chance to learn about triangles.
The National University of San Marcos provided a worthy backdrop. It was in celebratory mood, having marked its 464th anniversary the day before the Cumbre, making it the oldest officially established University in the Americas and one of the oldest in the world. Influential Latin American thinkers have studied there and it counts Nobel laureate, Mario Vargas Llosa amongst its alumni. Our co hosts were on top form, ensuring that the whirlwind of speeches, discussions, group thinking and networking, washed down by the occasional pisco sour all contributed to a successful summit. But Peru was also an inspired choice of venue.
Peru has experienced the aftermath of economic crisis and financial management long before 2008. It has known what happens when the financial system becomes the master rather than the servant of humanity. Information asymmetries and lack of transparency at the end of the 1970s and early 1980s ensured that many Peruvians lost everything in the massive devaluations and replacement of the currency. The consequences of a free market economy manifest themselves in the vast gap between the wealthy and less well off. There is no sign of a safety net. Even while our Cumbre progressed in Lima, Arequipa, an hour or so away by plane, was being placed under military lock down because of the Tia Maria copper mine dispute. It seems that Peru is still intent on being an extractive economy supported by a banking industry of like mind rather than being restorative, creative of community health and welfare and the role in sustainability of small scale rural farming.
The two day Cumbre brought together values based bankers, social and solidarity finance co-workers, foundation leaders, academics, public and commercial sector representatives. Your scribe along with a couple of other early arrivers also had the chance to see the Lima the tour buses hurtle past on their way to Pachacamac. We spent a day with three bancos communales working amongst the street traders in the shanty towns and poor communities that sit like a necklace around the northern fringes of the city. Here we learned firsthand of the challenges but also the opportunities facing these organisations and their customers: challenges when mainstream banks want to meet lending targets by encouraging over-indebtedness; challenges when the authorities want to ‘clean up’ a neighbourhood by dispersing traders. Opportunities that arise by providing a high quality affordable service that is not just about loans but helping customers to build and strengthen value chains as well as learning how to manage their own and their communities’ health and wellbeing. Therole of education in helping people understand money, the promotion of savings, organisational development, the role of micro insurance and now the impact of climate change and information technology and social networking.
It is difficult to choose between the many inspiring examples showcased over the two days. Overall one couldn’t help feeling that the paradigm change that has to happen not only in banking but throughout the financial system is no longer just in our hearts but is also taking root in our actions. We can no longer accept that 2.5 billion people are excluded from the financial system or that there is a $3-4 trillion gap in the funding needs of micro, small and medium enterprises post 2008.
Many of the participants were from South America but others had travelled many miles to meet together. Visa issues had not deterred people from West Africa although it had made their journey times almost unimaginable. Yet their voices were essential to be heard. How, in Guinea they had to be resilient in the face of ebola killing not only customers but also team members. How, in Burkina Faso climate change has required them to find the finance to experiment with new types of crops that cope with the shifting seasons. Humberto Ortiz invoked the memory of the late Denis Goulet, a Canadian pioneer in the study of development ethics who saw that for development to work it had to be undertaken in a qualitative or normative sense not simply quantitative
Many speakers referenced the way their organisations have changed, not because the head of innovation had created a new product but because customers and, in some cases, nature required them too. We heard of the moral compass that inspired the Desjardins family to start what is now the largest cooperative financial group in Canada and the values by which they and others work. More than one speaker said that there was no neutrality in finance.
But we also heard of the challenges. Around the world there has grown a suspicion around cooperatives especially as a governance form for financial organisations. This has to be challenged. In Brazil the Superintendent of Banking has launched a defence of cooperatives, saying that small is beautiful. Cooperatives can be democratic andinclusive when run well. The financing needs of rural communities, especially in small scale farming are not the same as for the urban trader and so the models of microfinance as we know them may not always be appropriate. New responses are being developed. In Bolivia, where coops have a less than wholesome reputation, the SEMBRAR Foundation has developed a fund for rural finance that takes account of climate risk and the production cycle. It has developed a comprehensive approach that goes beyond credit, a sustainable triangle (there I did mention we discussed triangles) of financial services provision underpinned by market access and technical assistance.
Yet as a foundation there is only so much that SEMBRAR can do. This is another challenge facing social and solidarity financiers, the bancos communales, the one of going to scale yet remaining true to your values. In Bolivia SEMBRAR will spin off the top tier of the pyramid into a new bank cast in its own mould. The Foundation will continue to provide the other services whilst complementing scarce donor funds with local savings. In many countries cooperatives have been successful in harnessing local savings, even in poorer countries. Yet to grow they often have to prove themselves once again to regulators who see all banks as homogeneous and place obstacles in their path.
A key message from the Cumbre is don’t think of us as the deserving poor, in need of aid or charity. Yes, like anywhere else, charity and aid can have their parts to play but we can also harness savings that need to be invested. Values based finance can grow through south-south and triangular cooperation. South-south implies, for example, social investors in Peru working with housing cooperatives in Brazil in return for shared understanding of the business model and application locally. The added triangular dimension reflects the opportunities for INAISE and its northern members supporting such alliances guided by principles of solidarity and non-conditionality.
The Cumbre was preceded by the INAISE AGM. INAISE is a 26 year old network of values based solidarity and social finance organisations. Perhaps because so many of us have been around it for almost as long, there can be a sense of elder statesmen, and sadly it is almost all male, grey or receding hair, developing waistlines. But 48 hours in the presence of younger South Americans can change a lot. This is important because like Gaudi we are the cathedral building generation who must pass on the foundations and unfinished edifices to a younger, more diverse and much more technologically wise generation who can truly take values based finance to a wider market and to bring the market based economy into a values based world.
In Peru in 2015 while the traffic jams grew longer and the pollution levels soared, we felt we were in good hands. For that, thank you to Fortalecer, to David Venegas, Percy Morales and Hector Ortiz, and to Bernard de Boischevalier from INAISE, a true chevalier who took on the task of making sure everything went like clockwork. It did though sometimes you couldn’t tell from his expression.
Footnote: Lima once boasted at least 40 pyramids, mostly destroyed since the arrival of the Spanish in the 16th century. Yet, just a few hundred yards from the conference hotel stands the great adobe and clay pyramid of Huaca Pucllana which has stood the test of natural as well as man made forces. Like the triangle it is a symbol of strength, balance and sustainability. The symbol of the triangle is commonly held to have a much deeper meaning than the basic geometric shape we see. The three sides of the triangle represent the number 3, representative of the spirit realm, of the divine and of manifestation: making something happen. In Lima 2015 Fortalecer, INAISE and the 230 delegates made something positive happen which itwill fall to Montreal to follow in 2016.
Malcolm Hayday CBE