Good Banking: Local Coop

GOOD BANKING: LOCAL COOPOne of the great inflows of capital in Portugal for a hundred years has come from emigrants. In general, regular deposits in a savings account, allows banks to boost real estate. But this value has fallen and will fall further. Mainly two reasons: BES shares and our banking system.

Many emigrants lost their life savings in BES, made to retire in comfort. Others felt that savings were not used properly by Portuguese banks with branches where they lived. Complaints didn't work. Banco de Portugal does not represent them. Lack of confidence has led many to look to other banks; and some to save less.

This also happened decades ago in other countries, which gave rise to special banks. Banking Coop for SMEs linked to a Regional Business Association, as in Sweden. Ethical Banking, whose main motto is not to maximize profit at any cost. Microcredit, for start-ups.

Some bankers here know that the lawsuits will stay in court for ten years and when the decision comes they will be old and the worst they will get is house arrest - good for those who have travelled the world, done all they wanted, and now wish to watch movies, read books and entertain friends for luxurious dinners.

Here, Caixa Agrícola does not operate abroad, which makes it difficult to capture emigrants' savings. It runs accounts abroad, but it's never the same as entering an office in the emigrant country. The best known ethical bank is Triodos, which since 1980 operates in several countries. When deciding on a credit, on top of financial analysis, it considers the social, cultural and environmental effect. Microcredit started 50 years ago in Bangladesh, aimed at short-term credit, often linked to commerce, catering or mini-services. It soon reached Chile. There, most coops are under Red para el Desarrollo de las Microfinanzas, created in 2001. Brazil started to follow Chile 14 years ago.

Banco de Fomento in Portugal seems bureaucratic and perhaps follows a now denounced banking cartel. The solution is simple. If, for example, 200 local industries start a cooperative with €400,000 in capital and Banco de Fomento lends it €800,000, 30 priority industries borrow €40,000 each, and every month another €400,000 from emigrants and €800 from Fomento help new members. Emigrants feel secure, and happy to see that their savings improve the interior, from which many come.

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