Invest in your values Bernard Horenbeek, Director
Credal’s civic roots
Crédal’s civic roots • Early 80’s. • B ank-apartheid movement: struggling against that system implies the withdrawal of our financial support ! • Crédal’s creation (CREDit Alternatif) in 1985 , as a cooperative.
Who’s Crédal?
Shareholders • 1500 shareholders : – Want their money to finance socially value-added projects . – Take « shares in the cooperative » (with or without dividends). – Legal or natural persons
Shares of the cooperative / month with dividends no dividends with dividends 2008’s dividend : 2,25%
The cooperative’s philosophy
Crédal, better than a bank ! • Financial cooperative for solidarity • Our customers are our Partners • An organization of third sector • Shareholders’ parts for individuals and third sectors organizations seeking for socially value-added financial investments. • 15,000,000 € of equity. • A social purpose.
Crédal’s activities
Credit for Social Organizations Personal Professional Microcredit Microcredit CREDAL Affaires de Management Femmes, consulting for Femmes social projects d’Affaires
Microfinance: history and objectives
History and objectives • 2000: Business start-up micro-loans – MC2 – 2004: Social consumer lending • Objectives : – to offer access to loans tailored to the beneficiary’s needs for start -ups or to improve the recipient’s everyday comfort – Personalised support • Social performance indicators
Professional microcredit
Professional microcredit • Creation or development of a professional activity . • For future entrepreneurs facing financial exclusion. • Specificities: – 12.500 € . – Refundable in 4 years maximum. – 5 % interest rate.
Professional microcredit Crédal’s « + » : • Human and personalized relationship. • Advice and continuous support. • Solutions adapted to the project and to its leader • Flexibility .
Chris Derudder benefited from a professional microcredit to start his catering project « I am fascinated by the cooking for a long time. I like to say that my job is also my hobby, my passion and represents all my life. I have the possibility of living on this passion . »
Some figures … 2008 2009 First calls 1.010 1.080 Files 220 173 Files presented to our credit 109 103 committee Accepted files 83 58 Average amount 7.688 € 7.688 €
Personal microcredit
Personal Microcredit • Consumers credit that maintains or improves daily life. • For people with low incomes, facing financial exclusion. • Specificities: – 10.000 € . – Refundable in 4 years. – 5% interest rate.
The personal microcredit • The social green loan : – 0% interest rate. – For people who wish to realize energy savings. – The credit is released according to the needs. • Loan for family reunification: – For immigrants willing to gather their family in Belgium.
Personal Microcredit Credal’s « + » : • Human and personalized relationships . • Prevention of over-indebtedness . • Budget advices.
Rex Nkangala reunified his family « Mes enfants ont entre 6 et 16 ans et sont maintenant scolarisés à Bruxelles. Ils se sont tous bien adaptés dans leur nouvelle école. A leur arrivée, ils ont été surpris par le froid et le peu d’heure de clarté. Je les ai vite rassurés en leur disant que ça ne serait pas toujours comme ça, les beaux jours vont revenir … Pour moi, les beaux jours sont revenus le jour de leur arrivée en Belgique. »
Some figures 2008 2009 First calls 1.521 2.245 530 813 First interview Accorded credits 258 476 Average amount a 4.291 € Loss ratio 0.4% 0.4%
Social performance indicators • Target population • Products tailored to the needs of target groups
I. Target Population – People with low income who are excluded from traditional bank loans or for whom the loan proposed does not correspond to their needs. – People who want to become self-employed but cannot obtain financing from a traditional bank. excluded from traditional bank loans (low income, lack of a guarantee, bad credit history, age, health, etc.)
– Family situation 7% 20% Single 43% Single with dependent family Couple Couple with dependent family 3% Cohabiting (at parents, etc.) 27%
– Origin of main resources Art 60 Main ressources 2% 4% Full-time casual work 2% 9% Part time casual work 5% 5% 4% Full-time contract of indeterminate duration 18% Part time contract of 15% indeterminate duration Unemployment benefits 6% Minimum welfare payment 30% Sickness benefits
– Welfare recipients/workers 39% Workers Welfare recipients 61%
II. Products tailored to the beneficiary’s needs and situation Sectors financed and types of loans: amounts, duration, interest rate Post-credit support, for business start-up micro-loans Specific experiences: social green loans and loans to migrant populations
A. Sectors financed • Sectors financed by business start-up loans: – Retail trade, craft enterprises and personal services at home, transport, “horeca” (hotels, restaurants and cafés), to finance investments, inventories, initial working capital needs, etc. • Objects financed by social consumer loans: – Second-hand cars, scooters, driving licences, household electrical appliances, furnishings, work, health care costs, etc.
Types of loans Business start-up micro-loans - Maximum: € 12,500 - Interest rate: 5% - Duration: maximum 48 months Social consumer credit: - From € 500 to € 10,000 - APR: 5% - Duration: from 3 months to 48 months
B. Support Post-credit support for business start-up micro-loans: - Observation: once the financing has been obtained, the venture begins - Team of voluntary workers: one full-time employee coordinates a team of voluntary workers
C. Specific experiences • Social green loans : loans at 0% for investments in energy savings • Loans to migrant populations: loans tailored to progress in family reunification procedures
Production Business start-up micro-loans – 8 years - 3800 initial telephone contacts - 1200 individual meetings - 366 micro-loans disbursed - Total amount disbursed: € 2,700,000 - Average amount per micro-loan: € 7800 Social consumer credit – 4 years • 4500 initial telephone contacts • 3000 individual meetings • 650 social loans disbursed • Total amount disbursed: € 1,900,000 • Average amount per social loan: € 3000
Recovery and delinquent loans/bad debts Business start-up loans • Delinquency rate: • Bad debt rate: Social consumer loans • Delinquency rate: 8% to 10% • Bad debt rate: 0.4% • Personalised debt recovery policy
Conclusions Bank access: • Access to appropriate services • Better informed and better equipped individuals • People on low income are not bad debtors Integrated model in Belgium • Single structure (CREDAL) which acts as a lender and provides support/advice Evaluation • Importance of the quantitative evaluation and qualitative impact on customers Funding • The educational process is expensive • Multiple sources of funding to ensure the long-term viability of the system
Crédal’s team
Crédal’s team • 32 employees and 75 volunteers . • Offices in french-speaking regions of Belgium : • Louvain-la-Neuve • Brussels • Charleroi • Liège • Namur
Thanks for your attention Contact: nathalie.denis@credal.be bernard.horenbeek@credal.be +32 10.48.33.50 www.credal.be
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