Marco Crescenzi | 15 Settembre 2015
“How much is it?” asks Dona Raimunda widow and mother of 8 kids. “Six palmas”, replies the cashier. At this point, the woman takes out some strange money from her purse. The trader collects the money and the woman walkes away with her shopping bags.
Brazil, one of the poorest neighborhoods in Fortaleza. Here, in the community of Palmeiras, people do their shopping –and not only that- like this. Dona Raimunda and the other members of the community hardly remember anything about the official currency, the real.
“I buy medicines and anything my family needs, I pay my bills with palmas; I don’t have “real money”. I don’t even know what it looks like”, says the woman. The Palmasè Bank is an example of Community Credit Banking that was created six years ago from an idea and with the support of some major NGOs. It is an innovative project, based on supportive economic systems and its aim is to overcome and fight against urban poverty allowing wealth to circulate in the favela.
Families that have no access to lines of credit and to the national currency, can buy whatever they need with Palmas (1 palma = 1 real), the currency coined by the same bank which pays salaries. Even tradesmen who were sceptic, had to change their mind: “I can pay my collaborators, I can develop my business”. Access to lines of credit has increased income and tradesmen can now ask for loans and give back the money in 6 installments at a lower interest rate. And this is only of the advantages. There is a special credit card, a sort of microfinance valid only for purchases within the neighborhood. This gives represents a double advantage-both for the tradesmen and the customers- it has no costs and it has an initial credit of 20 reais, which can reach to 100 reais if the holder pays on time.
“In other words- explains Joaquim de Melo Neto coordinator of the Palmas Bank – those who are not supported or are not trusted by loan agencies, can turn uo to us and get a compensation for their work.” It is a commitment/project that creates concrete employment opportunities thanks to investments in small independent entreprises:
A group of women got a loan of 15000 reais with which they bought a certain number of sewing machines and they started producing female and male outfits under with their own brand called Palma Fashion. In order to develop and improve their collection they were supported by SEBRAE (a Brazilian agency which supports little entrepreneurs) with specific courses on design that helped them balance quality and price in their products, meeting the market’s needs. Outfits are sold outside and within the community and tailor make about 270 reais per month. Today, after months of hard work and commitment, they are proud to have their own brand, their own business and to be independent entrepreneurs.
Another business that became successful thanks to the support of Palmas Bank, is that of the young of Palmeiras, who since they couldn’t find a proper job, found a valid alternative. With the help of a chemist, they developed a line of products for housekeeping. They started distributing these products in Palmas and this created a cooperative network and everyone in the neighborhood became a fervent supporter of the project.
Can a favela become a brand? Anything is possible in Brazil these days. Brazil is so rich in social innovation and even the Palmas is beginning to go beyond the boundaries of the community in which it was created. Palmas are beginning to be accepted and recognized even by traditional loan agencies.
Following a similar model is the JAK Bank, a cooperative, member-owned financial institution based in Sweden. JAK is an acronym for Jord Arbete Kapital in Swedish or Land Labour Capital, the factors of production in classical economics.
A membership of approximately 38,000 (as of November 2011) dictates the Bank’s policies and direction. Members are each allowed only one share in the bank.
AK banking employs the “Saving Points” system: members accumulate Saving Points during saving periods and use them when applying for a loan. The concept is that one is allowed to take out a loan for oneself to the same extent as one allows other people to be granted loans, saving into one’s account.
Savers for Savers. With a new approach to entrepreneurship based on a cooperative and ethic approach. Social innovation begins with little bets that can make a big difference. In Brazil and in Sweden equally.
And what about in Italy?
- I would like to thank my friends at Istituto di Tecnologia Sociale, Gerson da Silva Guimaraes, in particular, for the contributions on Brazil and Elisa da Silva Guimaraes and Antonella Andriuolo of ASVI Social Change, for their support and writing.