Social innovation, socially responsive design and social enterprise
There are a number of innovations in finance that offer inspiration for societal, economic and environmental development. Here are five examples of innovations in finance:
Triodos Bank
Triodos Bank operates under a traditional ownership framework but with an innovative mission. It is fully independent and a pioneer of sustainable and transparent banking. It finances companies, institutions and projects, which add cultural value and benefit both people and the environment, with the support of those who want to encourage a sustainable society. The healthy financial fundamentals of Triodos are under constant revision to guarantee strong solvency, good liquidity and high quality assets. For example, Triodos Bank has never invested in mortgage-backed securities and derivatives.
Credit Unions
Credit Unions, although having been around for sometime, represent an example of what could be a revisited scheme for today. Credit Unions are financial cooperatives owned and controlled by their members and offer many of the financial services provided by private banks. The Co-operative Credit Union is an example of a savings and loans co-operative for employees and pensioners of The Co-operative Group. It offers an ethical choice for saving, a better way to borrow, an annual dividend, a safe and convenient way to save (via payroll) and other useful services and advantages.
Community Investment
Community Investment programmes are another example of an innovation that is worth greater attention. These programmes invest capital in business ventures serving a social or community purpose and not only the investors’ interests. Community investors are often the best customers of the venture and this adds customers’ loyalty to the business model. Across the UK, a number of local initiatives in renewable energy has been financed through Community Investments. The Westmill Wind Farm in South Oxfordshire was initiated in 2004 as a cooperative to serve the interest of the entire community; it is the first 100 per cent community-owned wind farm in the UK.
Zopa Social Lending Bank
Zopa is a social lending bank which positions itself as fairer and more human than the traditional banking system. Both lenders and borrowers get better rates because social lending is more efficient than the traditional banking model. Banks have massive overheads with thousands of employees to pay and hundreds of branches to maintain. An online marketplace where people meet to lend and borrow has huge cost advantages – which is why Zopa members get a fairer deal when it comes to their money.
Timebanking; a new currency
Timebanking is a social instrument designed to develop a more active dialogue between community organisations and ‘people in communities’ - the intention being to move the agenda from people being ‘passive beneficiaries of community services’ to ‘active citizens for change’. Community members are invited to engage actively and take ownership of public services rather than being passive recipients. There is a host agency which acts as the central bank and acknowledges members for their time with credits. These credits can then be used for recreational services to go on trips or attend local events.
The Lewes Pound
The Lewes Pound is a complementary currency, redeemable for goods or services with local traders. It is not intended to replace sterling but by using it, people support local producers and traders, aswell as raise awareness of the importance of shopping locally. Lewes Pounds can be bought or redeemed for sterling at any of the issuing points.