European Federation of Ethical and Alternative Banks

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"European Federation of Ethical and Alternative Banks (FEBEA) is comprised of 24 members across 11 European Union and 2 EFTA countries. They take on different legal forms (ethical banks, credit cooperatives, foundations) but they all share the same concern for transparency and for social and environmental benefits.

An ethical bank is a bank concerned with the social and environmental impacts of its investments and loans. Through their activity, credit unions and ethical banks promote social inclusion, sustainable development, the development of social economy and social entrepreneurship. Ethical finances put credit at the service of people and reinvest their profits in common objectives. They are deeply rooted in the territory in which they operate. Participation, transparency and social investment are the main principles of ethical banking." (


Empowerment through Credit Unions

Flor Avelino et al.:

"Credit unions and financial cooperatives are member-owned financial intermediation organizations that aim to create an alternative financial system and support a fairer, more inclusive, and environmentally sustainable economy. They endorse values of solidarity, place shared social and environmental objectives at the core of economic transactions, and work towards changing the logic of ‘profit for the sake of profit’ that currently governs traditional banks. They join forces through the European Federation of Ethical and Alternative Banks (FEBEA). FIARE (the Foundation for Investment and Responsible Saving) is the Spanish subsidiary of FIARE BANCA ETICA, a European credit cooperative that carries out its financial activities in Spain and Italy. FIARE was created in 2003 in the Basque Country as a movement of citizens and social organizations aiming to promote socially responsible savings and investment among both private individuals and institutions.

Being member of a credit union gives access to a wealth of resources, most typically knowledge about the functioning and management of a financial institution. Most members do not have previous training in finance and they learn to create financial services based on ethical principles of solidarity, trust, and inclusion through hands-on experimentation.

FEBEA is an inspiring learning space about legal issues, banking structures, and plurality of owners about this form of having a bank owned by the cooperatives. We also learned quite a lot about the importance of a presence on the ground, of having volunteers of the cooperative and involving them in the bank processes, so that they can contribute in the assessment of the projects and the assessment of loans, in the control and verification of output of projects.

A sense of relatedness is promoted through a group culture based upon core values: equality, mutual respect, reciprocity, cooperation and search for consensus. Credit unions are keenly aware of the importance of building positive relations and the sense of being part of a movement, by providing spaces for informal experience sharing between practitioners of credit unions in different parts of the world. Connectedness is seen as an essential part of credit unions:

- When we reach stability or grow, we could lose proximity to the community, our participation circuits, social connectedness and thus people's motivation. Furthermore, if the financial tool is successful, we could be in danger of forgetting our cultural work, our political work, our alliances with other networks. (Member interview #1, FEBEA, ibid)

Credit unions promote autonomy in different ways. First, by providing clear information about products, operations and projects they fund, they aim to counteract the dependency and passivity clients of traditional banks experience. Members are in a position to make informed and congruent decisions. Secondly, they promote decentralization and participation, through membership owned structures and equal decision-making power.

- In my personal opinion, joining FIARE has to do with values. If you have other banks saving your money, you are contributing to a series of nasty things. If you have FIARE save your money, you have the opportunity to decide. I do not know of any single project funded by FIARE that I didn't support. To have that capacity to reject awarding credit to a project because it doesn't fulfil the requirements you believe in is a great advance. (Member interview #10, FIARE, ibid)

Through direct experience with building and managing a financial entity, credit unions contribute to acquiring knowledge about developing an initiative as well as challenging existing systems and institutions. This knowledge contributes to a sense of competence, of ‘financial issues not being only for the smart people, the professionals or the experts.

- Everybody in FIARE should be knowledgeable of the issues that are up for discussion. Otherwise participation would be a lie’ (Leading member of Fiare, 2014 ibid). Furthermore, assuming different roles in the international network and exchanging experience with people coming from different backgrounds also contributes to a sense of competence: I am in the ethics committee […] I learn a lot. And then I have the feeling that I provide a service by being the secretary of this commission and it feels good. (Member interview #2, FIARE, ibid)

Starting a credit union contributes to a sense of impact. This is often achieved through the initiative and effort of small number of people, who are able to demonstrate what is possible, even without the support of traditional institutions such as governments or regular banks:

- We have demonstrated that normal people are able to create a bank, which is also a tool of empowerment, because it shows that individuals can change society. Until now, we were just people working together, but we realized that (through the cooperative) we could be and change much more. (Member interview #3, FIARE, ibid)

Members experience a sense of meaning by actively engaging in a project that aims to ‘do something real, transforming utopia into reality’ (Member interview #3, FIARE, ibid). Initiatives provide opportunities for becoming active and experimenting with ‘utopic’ alternatives to existing social and economic systems:

- What I like most about Fiare is how it is constituted. Beyond being an ethical bank -because we have Triodos- Fiare has a different ideological base and performance. In Fiare we are involved in the construction of this bank. We are part of the project. (member interview #1, FIARE, ibid)

Finally, a sense of increased resilience is gained by overcoming obstacles and transforming them into opportunities for creative adaptations. For the Spanish credit union FIARE, the 2007-2008 financial crisis came with new banking requirements that made many credit cooperatives and small local banks and saving institutions (which used to fund local/regional economies) disappear. They adapted by merging with the Italian credit cooperative Banca Popolare Etica:

- New obstacles appeared in the process of constitution of FIARE: the banking policy was tightened. The legal requirements to create a bank have increased, including the necessary capital for the legal authorization by the Spanish regulator. These issues led to the agreement with the Italian Banca Popolare Etica to become partners within a single bank. (Member interview #1, FIARE, ibid)

Making positive use of challenges is also a result of their capacity to recover and adapt. The economic crisis also contributed to increased citizen awareness of the problems of traditional banking practices, which supported credit unions in making their message more easily understood:

- Explaining the aims of our project takes us now half an hour less (after the crisis). In 2000, when we proposed alternatives to the financial institutions, people asked us: why do you have to look for alternatives? Explaining these issues today is easier. People understand what had happened and they consider reasonable to look for alternatives. The crisis facilitated this and our membership has increased. (Member interview #7, FIARE, ibid)

Although participating in developing successful alternative financial institutions is experienced as empowering, disempowerment also surfaced as the project grew and adapted to changes in the broader social and institutional context. In merging the Spanish with the Italian credit cooperative and meeting the legal requirements to become a bank, FIARE attracted a wave of new members and became a larger organization. Autonomy to explore alternative financial solutions became more limited, although specialization was counteracted by maintaining the original association (as a legal entity) and exploring alternative projects at the margins of the new bank. Moreover, to use resources efficiently, members took on responsibilities that fitted their skill set, thus replacing the original style of taking on a diverse set of roles and responsibilities and developing new competences. Contexts in which direct, face to face, relaxed interactions where members can exchange experience become scarcer. This decrease in direct contact, which is a key element for developing trust, empathy and a sense of solidarity, was experienced as de-motivating especially by those who participated from the start. As they grew, new members joined with expectations shaped by their interactions with traditional banks. To align more traditional bank services with the credit cooperative's active participation ethos, new members are educated to counter disempowerment." (