Microfinance
Microfinance is a rapidly area of social investment and can be defined as the provision of financial services to the working poor, usually in the form of small loans that can be as little as $100, which are provided through Microfinance Institutions (MFI’s).
MFI’s are locally based specialised, formal and semi-formal institutions e.g. commercial banks, co-operative rural banks, credit unions and Non Governmental Organisations (NGOs) who provide financial services to third world micro-enterprises such as small farmers, fishermen, street vendors, cobblers, etc. There are currently over 10,000 MFI’s worldwide, providing financial services to 100 million individuals.
The Co-operative Bank has created a special $50m (£25m) fund in order to support the development of small businesses in some of the world’s poorest countries.
The Bank has created an innovative line of credit in association with several major international banks that will be used to provide microfinance, or small loans, to the working poor around the world.
The Co-operative Bank’s ethical policy clearly states what we will and will not do with our customers’ money whilst it is in the bank. Our involvement in microfinance clearly demonstrates to our customers the mechanics of how our ethical stance really works and shows how their money, when invested with the bank, can make a real difference in tackling global poverty.
This structured approach establishes The Co-operative Bank as a credible supporter of microfinance and reinforces our reputation as a leading exponent of corporate responsibility.