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Round table dialogue to promote and finance Social and Solidarity Enterprises


Mumbai, India was the venue for the two-day round table dialogue (RTD) on the role of co-operative banks and social finance institutions in promoting and financing social initiatives and social and solidarity enterprises (SSEs). The RTD was organized under the aegis of the National Federation of State Cooperative Banks (NAFSCOB), Eco Foundation for Sustainable Alternatives (EFSA), the International Cooperative Alliance Asia and Pacific (ICA-AP), the Mont-Blanc Meeting- International Forum of the Social and Solidarity Economy Entrepreneurs (MBM), the International Cooperative Banks Association (ICBA) and the International Association of Investors in the Social Economy (INAISE). In attendance at the meeting were over 30 representatives from State and Urban Cooperative Banks, National Federation of Urban cooperative Banks, National Cooperative Agriculture & Rural Development Banks’ Federation, National Bank for Agriculture and Rural Development (NABARD), UNDP, National Cooperative Union of India, AnupammaPariwar Group, SEWA, IFFCO Foundation, and subject matter experts.



SSEs are composed of a plurality of organizational forms that produce goods and services to their members or to the community. They are based on the primacy of people over capital, hold a long-term perspective, emphasize participation of member’s stakeholders in the governance of the organization and reinvest profits into their mission. SSE includes cooperatives and other forms of social enterprises, self-help groups, community-based organizations, common groups, associations of informal economy workers, service provisioning NGOs, solidarity finance schemes, amongst others. Its role has become even more significant in recent years, as it has proved to be a major anti-cyclical force in confronting the economic crisis.


The presentations by Cooperative Banks and Social Banks at the RTD showed the deep roots both have in rural and urban areas of India. The Primary Agricultural Cooperative Societies (PACS) at the village level have played a significant role in implementing the directives of the Reserve Bank of India (RBI) and NABARD into agriculture credit; but, remain captive instruments of the policies of the Central and State Governments.  The Cooperative Banks have been at the forefront of setting up and nurturing of Self Help Groups (SHGs), that covers 100 million households, and caters to a segment that forms the core focus of the initiatives related to the SSE. The Social Banks with a singular focus on members have empowered them not only with financial services, but also many non-financial services, to overcome their many social problems, including insurance.  Cooperative Banks and Social finance institutions mainly cater to the needs of the unorganized or informal sector that constitutes a pivotal part of the Indian economy as they account for more than 90 per cent of workforce and about 50 per cent of the national product.


Given the importance of the SSEs, the RTD emphasized the need for concerted action at the global, national and local level. The MBM as an observer on the UN Inter-Agency Task Force on Social and Solidarity Economy has been advocating for governments to promote innovative social and economic forms of organizations to pursue both Financing for Development and Sustainable Development Goals and foster a favorable framework, including a more favorable access to financing and regulatory systems to encourage SSEs. Social and Solidarity-based Finance (SSF), including Cooperative Banks and Social Finance, rooted in the territories, can generate local resources to promote sustainable development in India. The ICBA and NAFSCOB will sign a Memorandum of Understanding to bring to the attention of policy makers issues relating to capital infusion and prudential norms that have been holding back cooperative banks from achieving their full potential. At the same time, cooperative banks needed to improve governance, professionalize, and adopt modern technology based solutions.  The RTD was agreed that PACS needed to be revitalized and allowed to deal with range products to help achieve the goal of greater financial inclusion. In this regard, it was encouraging to hear NABARD's policies to promote PACS to be one-stop shops to aggregate and provide value addition in financial and non-financial terms.  The RTD provided a good platform for sharing experiences and this brought out the need to have mechanisms for ongoing communication. The UN Solution Exchange provides one such. The RTD provided a number of examples in product and process innovation that would be collated and shared widely. The need to give importance to women who constitute the backbone of the informal economy was shared by all.


The participants agreed that the cooperative difference lies in bringing attention to members, retaining their trust, and providing services that meet their financial and non-financial needs. Cooperatives are well positioned to do that. Partnerships within SSE, particularly between Cooperative Banks, all cooperatives and SSE organizations, can give rise to innovative and integrated solutions to meet people needs. Both international and Indian partners agreed to continue dialogue.