Social microcredit in France: Which Social Banking Innovation During a Period of Crisis?

AutorCarmen Parra Rodríguez
Páginas225-240

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1 The origins of social microcredit activities in France: Pawnshops

Since the end of the 1980’s with the professional1 microcredit experiences and, on the other side, since the middle of the 2000’s with the social microcredit, public opinion seems to have discovered a new financial innovation under social rationality, both with banking and monetary characteristic. But we think that we are facing a new kind of locally social microcredit systems, when they are, in fact, social banks and pawnshops in the Preindustrial Europe sense (Fontaine, 2010). Indeed, neither social, nor professional, the pawnshop activity is always concerned with detrained goods to cover domestic or professional cash flow problems. These social banking activities are under social rationality, i.e. rationality that takes social processes into account (Lindenberg 2003, p.359).

Even if we have only pawnshop activities (Demartial and al. 2008, Pigalle 2008) or, only social microcredit activities (FIMOSOL 2009, 2010), our hypothesis is: social banking territories are under social rationality. To test it, we

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considered the national dimenions of social microcredits since 2005 (part one). With this, we tried to understand the local social banking innovations in the west of France, in particular in the area of Pays-de-la-Loire.

There are not enough empirical and theoretical research programmes in France, but it is possible to find some in the Universities of Bordeaux and Limoges (2008) and in FIMOSOL (Universities of Angers, Nantes, Rennes and Poitiers) and all of them seem to be leading to the same conclusions about the French social banking activities. Therefore, it is easier to understand why the French civil society is a key element to create social banking models in a period of financial, economical, and social crisis, that guide to a real sustainable development.

2 From lectures on macroeconomics of social banking activities to their microeconomic fundamentals

To consider banking supply in economics is to understand the difference of banking enterprises through their bundlings, in particular when we have a domestic policy which target is «to set up a bundling system whom objective function is to reduce banking exclusion, by supplying at all citizens banking-based services» (Vaubourg 2001, p.1). In this article pawnshop activities are not studied, even if they are believed to be social bundling. But before that, we must know the French reality of social microcredit landscape.

2. 1 Lecture on macroeconomics of the French social banking activities: the social microcredit

This period of crisis we find ourselves involved in has seen a significant growth of social micro credits (fig.1):

Figure 1. Number of social micro credits

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Source : by author inspired by CDC Report (2011).

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But, it cannot be said that this phenomena has been due only to the financial and social crisis. Indeed, French experimentations have been carried out since 2006. Hence, the growth is the result of the institutionalised process of a new kind of social policy tools: social banking under a state guarantee (national guarantee funds which are developed by the French government through a social cohesion funds)2. As figure 2 shows, the percentage of claims (yellow curve) is growing, but not in the same trend as the number of social micro credits:

Figure 2. Diachronic analysis of the growth of the guarantee and the percentage of claims

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Source : by author inspired by the statistics from CDC’s report (2011).

As it has been shown, the growth of social micro credits in France could not be explained only by the crisis. Therefore, it was decided to compare the usings of social microcredits between the aims consumer spendings in 2008 and in 2011 (fig.3a and fig.3b):

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Figure 3a. The aim usings of social microcredits in France, 2008.

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Figure 3b. Allocations from social microcredit in France

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Source : by author inspired by the statistics from CDC’s report (2011).

The indicators «allowances» and «employment and mobility» point to where social micro credits were directed in 2008 and 2011. But, the affectation to health expenditures is new. This fact means that we have now a bigger vulnerability than three years ago. In other words, not only we have a social banking necessity, but a social aid necessity too. Exploring the French administrative areas, in an infra territorial level, would explain this situation better. (fig.4)

Figure 4. Répartition métropolitaine par région des microcrédits personnels garantis au 31/12/2008 (en %)

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At this territorial level, the west of France is the most important region for social microcredit experimentations (74%).

2. 2 The microeconomic fundamentals of the French regional social microcredit systems

In the late Middle Ages (Fontaine 2008, p.164), religious communities (Franciscains and Récollets) tried to promote «honest credit instead of gift» because, the relationship with borrowed money is less intense than with given money. Moreover, this particular way of social banking needs to develop a different sense of lending money...

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