INAISE conference holds out prospect of socially inclusive banking order

 

Malcolm Hayday

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Malcolm Hayday

Malcolm Hayday

In recent years Mexico has earned a certain financial notoriety, whether from the Compartamos IPO or the alleged money-laundering activities of HSBC and others. The World Bank considers Mexico to be an ‘advanced middle income country’ and it is home to the world’s richest man, yet poverty is growing, with more than 40% of the population in relative poverty and more than 10% in extreme poverty. An interesting backdrop to INAISE’s third international conference beyond the shores of Europe.

INAISE’s annual meeting and World Summit of Solidarity Finance, Cumbre Mundial de Finanzas Solidarias, was held in Oaxaca, Mexico, on 28-30 May, hosted by the Mexican Association of Social Sector Credit Unions (AMUCSS), INAISE, and the Latin American and Caribbean Forum for Rural Finance (FOROLACFR).

Perhaps unsurprisingly, the Cumbre spent a lot of time exploring the challenges of climate, ecological and social transition, food security and rural development as well as the regulatory environment and how solidarity finance initiatives can grow while remaining true to their values and mission.

The Cumbre was preceded by the INAISE annual meeting. It is perhaps a sign of the network’s growing international reach that despite being held some 10 hours’ flying time from Europe, more than 20 member organizations were present. INAISE’s strength has always derived from its diversity of social banks and solidarity finance institutions: both start-ups and some of the longest established of recent times. For a number of years INAISE struggled to work out whether it was an organization or a facilitating network. It now seems confident in the latter role, with members inspiring each other to achieve more but also looking to find added value by working together across borders.

After the day-long INAISE meeting, we were into the meat of the Cumbre. Two days of intense debate involving over 200 delegates, all with the purpose of building a more democratic financial system and stronger, more resilient institutions better equipped to serve the needs of their customers.

It is difficult, perhaps unfair, to single out contributions from some 60 speakers and moderators. But as time affords me the opportunity for reflection I must make mention of Reynaldo Yujra Segales from Bolivia where he had been a banking supervisor. His was one of the most common-sense discussions of what is wrong with regulation and how it might be improved. A voice that needs to be heard in Brussels and Basle. Lionel Fleuristin explaining how savings are mobilized in Haiti. Our Mexican hosts explaining the limitations of the M-Pesa model in Mexico: the mountains make internet and telephony more difficult. A fascinating session on community currencies. The work that is ongoing and often unsung around social performance certification.

Yes, there were cautionary moments. The challenges of growth while remaining true to ideals. One size doesn’t fit all regulation. Poverty, food insecurity, vulnerability, value chains and local development. Ecological and social transition. The role of innovation and how the sometimes well-intentioned but dead hand of bureaucracy can stifle it.

A lot has been learned from the over-hyping of microfinance. We understand better now that poverty is a multi-faceted issue where healthcare, education, infrastructure and demand constraints are all important factors.

Tinkering with the system has failed us. There is an urgent need for a new, socially inclusive banking order where credit and financial institutions are evaluated not only by their financial performance but also according to the value of their contribution to social development: a financial system with a human face.

On returning to Europe I keep reflecting on those three days. Some case studies would have been at home in the world 100 years ago, some may equally find resonance 100 years into the future. What I experienced in Mexico were strong cultural roots, and a sense that perhaps we are beginning to see a new era of economic reality, less comfortable for neoliberal free market capitalists, more challenging – even revolutionary. Such changes will generate resistance that may slow the pace, but not the direction of change. One test will be in Germany in 2014 when we begin to see how many of those ideas hatched in and around the margins of the conference have begun to take root.

Malcolm Hayday is general manager at the Institute for Social Banking.

For more information
Presentations from the plenaries and workshops can be downloaded from http://www.inaise.org as can the Oaxaca Declaration, a nine-point drawing together of the conclusions from the Cumbre.

Tagged in: INAISE Latin America Mexico microfinance poverty Solidarity finance


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