A concept yet unknown to Croatia, ethical banking aims to support the needs of communities
The first bank to operate under ethical banking principles is expected to be licensed by the end of the year, as was announced on Monday at the “SOCINNOVETHICS: Synergy of ethical financing with social and technological innovation” conference, where ethical banking in Europe and Croatia was discussed, reports HINA on June 6, 2016.
One of the initiators of the future first ethical bank in Croatia, Silvana Vujnović, announced that the licence is expected by the end of the year, for which 150 million Kuna base capital must be raised.
In her words, the Ethical Financing Cooperative (ZEF) is a member of the Federation of European Ethical and Alternative Banks (FEBEA), so this will aid in activating the ethical bank. She added there are currently 420 registered clients in ZEF and another 200 waiting for membership.
FEBEA president Fabio Salvato feels great opportunity lies ahead for ethical banking in Croatia. “Interest in ethical banking are between 0 and 4 percent, while this type of banking fosters social entrepreneurship,” he said, also explaining that the core of ethical banking is about reinvesting profit, refinancing sustainable long term projects important for a local community.
Deputy Prime Minister Božo Petrov noted that ethical banking can help Croatia with the challenges she’s facing, while the goal of such banking is to support small and medium businesses and develop social justice. He also pointed out the government supports the start of ethical banking. Petrov emphasised that ethical banking has a great influence on the development of local communities and the European Union recognised it as an element of all strategies connected to social development.
Ethical banking is for him a “great leap forward,” as it represents universal values which are important not only to the financial sector, but also to the social one, such as transparency, honesty, responsibility to community and social justice.
Deputy Finance Minister Saša Drezgić feels the activation of the first ethical bank in Croatia is an extremely important project and that Croatia needs such an institution. “Ethical financing shouldn’t be called alternative but deserves to be named the standard model of financing,” Drezgić added. He noted the banking system has been in a crisis for a long time, making the banks shift risk onto clients. “The principle of ethical banking is that banks and clients work together on projects, meaning the bank understands the needs of clients,” explained Drezgić.
