In early 2019, nearly €13 billion1 were placed in socially responsible investments, enabling activities with high social and environmental value to be funded. Social savings deposits increased 8 times in 10 years and witnessed double-digit annual growth rates on average.
This rapid growth is primarily explained by French regulations promoting employee savings, which require all companies, since January 1st 2010, to offer at least one social fund in all company savings schemes. Other elements contributed to the development of social resources, such as the growing commitment of financial institutions in promoting their ranges of social products. The number of these funds is growing. In 2018, the Finansol label, based on solidarity and transparency criteria, was awarded to 19 new, highly varied savings vehicles, bringing the total to 161. On the demand side, savers use investments to give greater meaning to their savings. Last year, 423,000 new socially responsible investment subscriptions brought the total to €2.8 million on 31 December 20182.
Microfinance in France, Europe and around the world has a long-standing and preponderant place in the social funding ecosystem. Social investments are often used to finance microfinance institutions and, ultimately, microcredits. The microfinance component has been present since the creation of the first investments, first offered by pioneers such as CCFD-Terre Solidaire, Adie and Oikocredit, and then gradually included by other organisations such as Entrepreneurs du Monde and Fadev.
Over the years, these stakeholders have diversified their resources by developing new socially supportive savings products, whether directly using their own schemes to collect equity or debt (issuance of equity shares, bonds, associative securities, etc.), but also through bank investments, life insurance policies and, more recently, via crowdfunding platforms. The first one created in Europe was Babyloan. Adie is the leading microfinance organisation in France.
Microfinance has always been a vector for high-impact innovation in the fight against poverty and for social and professional inclusion. It must now continue to grow while adapting to a rapidly changing market (development of institutional investment, digitisation, impact finance, etc.). No doubt it will be a success.
1 Baromètre de la finance solidaire 2019 – Finansol/La Croix.
2 Ibidem.
FRÉDÉRIC FOURRIER
HEAD OF THE SOLIDARITY
FINANCE OBSERVATORY
FINANSOL