Community Development Banks

= "Community Development Banks provide solidarity finances services in a network of associative and communitarian nature, directed towards the generation of jobs and income, having at its base the principles of the Solidarity Economy." [1]

Characteristics

What are the main characteristics of the Community Development Banks?

1. the community itself decides to create the bank, becoming its manager and proprietor;

2. it always acts with two credit lines: one in Real currency (R$) and another one in circulating social currency;

3. its credit lines stimulate the creation of local production and consumption networks, promoting the endogenous development of the area;

4. it supports enterprises, as a commercialization strategy (solidarity shops, fairs, central office for commercialization etc.);

5. it acts in areas characterized by a high degree of exclusion and social inequality;

6. it is aimed at a public characterized by a high degree of social vulnerability, in particular the beneficiaries of governmental programs;

7. it aims to become financially sustainable in the short term, obtaining subsidies justified by their social utility." (http://dowbor.org/ar/community_development_banks-instituto_palmas_methodogy.pdf)

FAQ

What is the objective of a Community Development Bank?

Promote the development of low income areas, through the encouragement and creation of local production and consumption networks, with the support of the economic initiatives of the Solidarity Economy and its diverse scope. For instance: socio-productive enterprises, service provider, support for commercialization (markets, solidarity fairs) and consumer organizations.

What is the management structure of the Community Development Bank?

CDBs are managed from within the structure of the community organizations (associations, councils, forums etc…) and other type of civil society initiatives that are recognized within the community (unions, NGOs, Church). Thus, its functioning involves the establishment of a team in charge of the executive coordination at the heart of the associative organization itself. Accordingly, its management involves a shared dimension with strong components of local social control, based on the mechanisms of direct democracy.

How do you finance Community Development Banks?

Its financing is done through access to public resources as well as a solidarity fund for community investment. This fund is formed by multiple sources of funding, from private donations from people and/or legal entities, membership fees (person or legal entity), commercial services provided that face no competition and other types of services provided." (http://dowbor.org/ar/community_development_banks-instituto_palmas_methodogy.pdf)