This is a CTP of initiative: FEBEA/Fiare (Spain)
The Critical Turning Point describes a symbolic event occurred in the most recent stage in the history of Fiare. The initiative opens its first office in the city of Bilbao (Basque Country) and starts to operate as an online bank in the entire Spanish territory. Bilbao´s office is also the headquarters of Fiare in Spain.
The initiative [1] has described this event as an important milestone resulting from “10 years of intense work by more than 5.000 associates, who have committed to spread the culture of ethical finance throughout the Spanish territory”.
Also, the president of Fiare Banca Etica, Ugo Biggeri [2], has described this event as “the beginning of the adventure” in the Spanish territory which has a special value: “the pathway followed by members and partners, the huge international effort the cooperative made, for its intrinsic renewal and force-generation, for the expectations raised and the attention captured at European level” (Biggeri, 2015).
With this CTP Fiare starts a new phase, becoming a Spanish bank, able to give credit and collect savings, as well as offering their members and clients regular banking services. In a first stage, Fiare strives to offer their associates preferential treatment and contacted the 5,000 members to offer them specific banking products and services (e.g. access to the new online banking platform, debit cards, etc.).
Second, Fiare aimed to become a tool at the service of social transformation. For this reason, since its beginning, the bank focused their efforts in financing solidarity economy projects and in the promotion of a culture of financial intermediation in line with the principles of transparency, participation, democracy and access to credit.
However, whereas the expertise gained in the last decade generated great expectations, the period 2014-2015 involved also some difficulties and frustrations for the members of Fiare. The lack of a banking structure with hired personnel to meet all the demands coming from partners and savers produced an important delay on the different phases settled in the strategic plan as the interviewee stresses in the following:
Most of the problems have to do with the fact that there is no structure, there is no structure that can withstand a social base with high expectations, which demand services that we cannot offer them yet. We are under a lot of pressure, due to the expectations
Besides, the respondent reports several communication issues and the lack of understanding of what to start a new bank -grounded on member´s voluntary commitment- really means:
We have had a communication problem here, because many people approached us believing that this alternative project was going to be as perfect as the other banks are. Some people think that Fiare is so well endowed, with many offices and cheaper than traditional banks. These people have not reflected on what being a real militant means
The interviewee also mentions a second problem which relates with the borrowing-lending gap in FIARE. The CTP lead Fiare to increase its capital by collecting savings from its customers, which was very positively perceived by the associates. However, at the beginning, Fiare did not perform very well regarding credit activity. Being capable to fund social and solidarity projects was key to maintain the motivation of members, as well as their commitment to the project.
Granting loans was the real demonstration of the ability of Fiare to improve the social context by supporting social economy. The mentioned gap between the savings collected and the credit operations awarded was overcome in the following years and currently, members of Fiare feel satisfied with its loan activity.
References:
[1] Fiare´s post : http://www.fiarebancaetica.coop/blog/bienvenidas-y-bienvenidos-fiare-banca-etica
[2] Article of Ugo Biggeri in Fiare´s Website: http://www.fiarebancaetica.coop/blog/fiare-banca-etica-cumple-un-ano
Several actors have been mentioned regarding the coproduction of this critical turning point. First, the respondent talks about the more than 5.000 associates –individuals, entities and institutions- that supported and facilitated the transformation of a shared dream into reality. As a grassroots social innovation, many committed associates – along the entire Spanish territory- devoted time, voluntary work and savings in establishing the first ethical credit cooperative in Spain.
By following the principles of credit cooperatives, Fiare ensures the democratic management and ethical commitment, while also encouraging the participation of members in the decision-making processes (i.e. under the principle of "one person, one vote").
Although the participation of all the members is still a challenge, the constitution of local chapters in Fiare enabled local and regional leaders to arise during the constitutional phase of the Spanish initiative, easing the deployment of Fiare at the regional and local levels.
Going further, the interviewee identifies feedback and reciprocity among the entities and networks involved in the cooperative, Such as REAS:
We often say that we have been too dependent on several social movements and some - formal and informal- social economy communities. But the very existence of Fiare has also contributed to reinforce these communities. This is the case of REAS, the Spanish social and solidarity economy network. REAS has been greatly strengthened due to the activity of Fiare, due to the credit granted to many organizations which are members of REAS, but also because we have contributed with our knowledge to the solidarity economy network at the country level
Although the current office director- Juan Garibi- and the president of the Fiare Foundation- Peru Sasia- are the spokespersons of Fiare, according to the interviewee "there are many people and organizations that can be named as coo-producers of this CTP”, who worked intensely in the national and international context, to obtain the authorization of the Bank of Spain that would allow them to start their financial activity in Spain. Besides, a reduced number of highly committed employees took on the challenge of starting the banking activity in Bilbao´s headquarters. Ugo Biggeri, president of Banca Etica acknowledges this effort as follows:
“The work done at the headquarters in Bilbao, has exceeded the borders of the city. It is a job for all social networks and for all citizens of the Spanish territory. These works has been carried out in a cooperative and participatory way along with those in Italy pursuing the same goals and have the same dreams. We are now the reference cooperative bank in Europe with more than 36000 people partners across Italy and Spain” (Biggeri, 2015[2]).
Finally, the respondent mentions that the consolidation of Fiare is contemporary to a process of social contestation against the current economic and political system. In the following he mentions the Spanish 15M movement which occupied public spaces for a long time protesting against the roots of the economic crisis and the political subservience to these:
We cannot say that the 15M arises from Fiare nor that Fiare arose from the 15M movement but is evident that, at some extent, we can identify some dynamisms of mutual feedback, we have fed each other as well as with other movements like the emergence of alternative local parties (…) There are cyclical and structural conditions that explain both processes. The new political discourses are more connected to cooperativism. They talk about the ethics of finance; we can perceive the influence of Fiare in bringing these issues to the public opinion
Notes
[1] N.A. REAS is the Spanish branch of RIPESS, the “transnational network that connects social solidarity economy networks worldwide”.
[2] Source: Article of Ugo Biggeri in http://www.fiarebancaetica.coop/blog/fiare-banca-etica-cumple-un-ano
Two related events that have directly contributed to this CTP are the first and the second agreement that Fiare signed with the Italian credit cooperative Banca Popolare Etica. Due to the first agency contract that Fiare and BpE signed in 2005, Banca Etica provided technical support and training to Fiare´s members in order to create a new ethical credit cooperative in Spain.
When we started thinking about this project in Bilbao, the first idea was to create a credit cooperative in the Basque area. We created a first Basque network, the Fiare Foundation, which integrated several groups. We realized how difficult the emergence of a sustainable entity at the Basque level would be and we focused on the Spanish territory. In the process of creating the credit cooperative, we decided to approach other European ethical banking experiences and we observed that we shared many commonalities with Banca Popolare Etica. It was an entity that had been operating for ten years in Italy in a sustainable way and we asked them to allow us to operate as their agents in Spain before being a credit union. The next step was the merger process with them
Such first agreement enhanced trust building and good relationships between members of both initiatives, which led to a process of merge between the two institutions approved by their members in 2013.
In 2013, Fiare decided in assembly that it did not make sense to create our own credit cooperative project and that the best option was to integrate both cooperatives in one. And Banca Popolare Etica accepted it
The integration process with the Italian cooperative was ratified by most delegates in the May 2014 Fiare´s general assembly. Then, Fiare received in October 2015 the official authorization from the Bank of Spain for operating as a banking entity in the country. Both events were also pointed out as critical events for Fiare´s timeline. Besides, the opening of one office in Bilbao was also preceded by a process of upscaling of the initiative at the national level and, above all, by the integration process of all the regional associations of Fiare into the Fiare Foundation.
All these changes occurred in the 2014-2015 period and generated internal discussion regarding which entities should be part of the the Fiare Foundation Board to ensure compliance with the plurality, cultural and territorial diversity of its social base.
The following steps taken by the initiative were related to the structural integration between Fiare and Banca Popolare Etica, with the merging process already in place and with some initial Spanish social base. The General Assembly that Fiare Banca Etica celebrated in 2015 elected the new Board of Directors.
The majority of participants (both from Spain and Italy) voted the Spanish candidate, Peru Sasia, as a new member of the Board for the first time. In this gathering, participants perceived the strong cohesion and shared satisfaction among the members with the merge between both entities.
No opposition was reported to the opening of the first Fiare´s banking office in Bilbao. More on the contrary, this CTP represents a long-awaited event in the story of Fiare. Since the beginning of the project, the members of the initiative were looking forward to seeing their first office opened and being able to reach the wide public as a real alternative for people who were not happy with mainstreaming banking practices.
However, as we explained in the previous sections, as a consequence of this CTP some critic voices arose within Fiare regarding the inability to face the demands by members and customers. Some partners, who have been waiting for many years to have “their own bank account in Fiare” felt frustrated and demotivated by the increasing difficulties to obtain their banking accounts or receiving their debit cards, which were severely delayed. The bank started with only 9 employees and, despite the support provided by the Italian colleagues, they were totally overwhelmed by customer´s demands.
The implementation of the banking activity has technical problems which can be expected by anyone who understands financial functioning. However, a sector of our social base felt very nervous about these problems
According to the respondent, contestation was grounded on a complete misunderstanding regarding the starting process of the banking activity. Although certain organizations within the social economy movement are able to function without a stable hired staff, banks need a proper professional structure. However, the interviewee remarks that both the volunteering and hired parts are necessary and mentions that some counter voices could arise if all the banking activity would have relied only on the technical structure.
Financial activity should be always very close to the ground. Our local groups, volunteers and organizations should be our voice in the local context. We neither want nor can leave all this responsibility to the banking structure
Second, the interviewee pinpoints failures in the communication strategy, especially with regards to which key messages were given. Such problems have been fixed thanks to the work of the communication department:
Our communication strategy was wrong. We have been very enthusiastic. We have made several mistakes such us delegating communication to volunteers. And we realize that communication planning cannot be done only with volunteers. Now we have a communication department that analyzes each strategy and we have realized what we did wrong and what shouldn’t have been done
The majority of the members of Fiare consider this event a critical turning point in Fiare's history. It was an exciting event for most of them and, as researchers, we observed that many associates, from different parts of the country, even very far away from the Basque Country, describe this event as a very relevant one, "a historical moment" that fulfils one of the main goals of the initiative: to start an ethical-based credit cooperative in Spain rooted on the solidarity economy movement.
This CTP has been described by the president of Banca Etica as the date by which "the dream became a reality". The leaders of Fiare Banca Etica stress that "dreams come true is fundamental because too often, criticism and resistance do not allow us to generate concrete alternatives for change. Getting it done in the finance field is fantastic" (Biggeri, 2015).
Besides, the interviewee acknowledges that he could anticipate some of the consequences derived from this CTP. Thus, he has been putting attention to the profile of the new members in Fiare. The latter diverged from the profile of founders and pioneers. At least some newcomers seemed to be individuals who turned to Fiare for accessing a banking option which was consistent with their values but who did not know Fiare´s philosophy in depth. Thus, despite the great leap forward that Fiare took with the opening of its banking office in Spain, Fiare remained a volunteering-based organization with limited human resources as to be able to face the customers’ demands.
This circumstance will generate many frustrations and criticisms that only few members anticipated:
During the assembly of May 2015, I explained, in front of 300 people in Barcelona, that I panicked when we would open our banking office. Of course, people went crazy: "But this is what we had been dreaming all our life! Yes, yes ... it is true ... this is what we are pursuing and what we are going to get" But I panicked because we should realize that many of our members, who seemed activists, militants, were just mere consumers who wanted to consume ethics without any additional cost, right? Should this institution come true, it would have been a problem for us. And it happened!
Finally, the respondent was aware of the risk of losing the identity and the real value that Fiare represents in terms of social innovation and democratization of the financial system. Even though this risk was not evident to most of the members of Fiare, it concerned some of its leaders, as Sasia reflects on the following:
I anticipated the existing risk to be only perceived and evaluated as any other financial institution would be. If we were evaluated as a financial entity, we would be irrelevant from all points of view. Thinking that we have already built an alternative because we are going to open an office and we will have current accounts, or online banking services, is a mistake. It would be an extraordinary impoverishment of the value of the project. We would be missing its innovative capacity and the most important part of the project, which is the political and cultural dimension
References:
[1] Article of Ugo Biggeri in Fiare´s Website: http://www.fiarebancaetica.coop/blog/fiare-banca-etica-cumple-un-ano
The interviewee listed four main lessons related to this CTP. First, he reflects on the communication strategy of Fiare, especially regarding the optimistic information and messages that the initiative -including individual partners and local/regional chapters- sent to the public. After analysing and reflecting on the failures, the respondent affirms that this could have been better done. The discourse in Fiare should be more efficient, conveying correctly its philosophy, without creating false expectative to future customers or associates.
Then, communication should put in value the innovative and alternative character of Fiare -as a countermovement- but making clear the roots of the project and what being a community – voluntary-based- project means. Fiare needs committed partners, militants, not mere customers, people willing to contribute to build a real alternative to financial system:
We made a mistake regarding our target. That is one of the problems that often occur in innovation projects. We are that worried expressing the value of the social innovation, its added value; explaining the technical or the economic value of our initiative that we forget to explain the reasons why people should join us. But, in the end, people willing to consume ethical banking are also motivated to be part of the construction of the alternative initiative
Fiare leaders have also learnt about their own weaknesses, the fragility of the project. Fiare needs the participation of highly motivated and qualified members, which has been pointed out as an actual challenge:
We have realized that the greatest weakness of our project is not related to the technological system or our financial capacity to attract credit, etc. or even the economic sustainability of the project, which is not in risk either. The real fragility of Fiare in order to maintain its identity is the need for a very extensive network of volunteers, which develops an intense work. We require high intensity militancy to be part of our structure. Our bank is in hands of its social partners, people who know what should be done at the ground level. This legitimizes the project and will avoid certain economic utilitarian use this type of organizations usually has
Fiare has developed a new organizational structure oriented to facilitate the participation of the different partners, regional and local chapters within the deliberative and decision-making processes. Also, this requires learning process that allows members to acquire new knowledge, leadership skills as well as new capacities to develop the future strategic lines at the local, regional and international level.
We have developed a new associative diagram that we want to put into practice. We have local groups, local chapter’s leaders, we have networks of organizations. We are connected to solidarity economy networks, with the Fair-Trade movement… We have conducted a very intense cultural work, with two foundations -in Spain and in Italy- with remarkable social impacts. We have talked to political parties at national and European level, in Brussels. These activities are considered essential, in terms of building an alternative. However, we need stronger structures and more trained leaders
Finally, the interviewee highlights the opportunity to influence political discourses and to have a certain impact in the political arena. For this, the initiative requires more capacity to make proposals and solutions to current social issues. Fiare needs members to be able to efficiently convey its alternative discourses of change and participate in public debates at all levels:
Being a member of the Board of Directors involves the responsibility of reading, every month, thousands of pages of banking technical documentation and those members are nor paid, they are volunteers, but such commitment requires a certain educational level. Requires learning a technical banking language, requires travelling, understanding what the Basel 3 reform involves… But, at the same level, we must communicate the political burden of the project. When Yanis Varoufakis invited us to talk about alternative financial policies for Europe, we had to prepare our discourse very well!
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