Economia Social i Solidària

Gina Planas:

Welcome to Les Veus de l'Economia Social i Solidària [Voices from the Social and Solidarity Economy], the new podcast on social and collaborative economies.

This is the first episode of a podcast created by the City Council to help the public find out about new ways of doing business in Barcelona, ​​always with the needs of people and their surroundings as the main priority.

We'd like to start with an episode about ethical finance. Funding is key in the social and solidarity economy. The lack of funding is often an insurmountable hurdle for viable projects. In view of this, in 2017 Barcelona City Council entered into two partnership agreements with Coop57 and Fiare to facilitate capital injections into new projects and businesses in the social and solidarity economy with an impact on the city.

Today we'd like to introduce Raimon Gassiot, a member and assistant coordinator of the financial services cooperative Coop57, who will explain exactly what ethical finance is and what Coop57 does. 

Welcome, Raimon, and thank you for coming.

 

Raimon Gassiot:

Thank you. Good morning. 

 

Gina Planas:

Good morning to you too. Just to provide a bit of context, could you please start by explaining what ethical finance is and how it's different from conventional finance?

 

Raimon Gassiot:

I'll start with conventional finance. I think we all know more or less what conventional finance is and what its aim is. Its aim is to maximise profit for its owners and shareholders through financial equity. 

In ethical finance, on the other hand, financial activity is seen as a tool rather than an end in itself, and its aim is to generate positive impacts on society and the natural environment.

At Coop57 we like to say that the aim of our financial activity is to transform society and the economy through the practices and approaches of the social and solidarity economy.

 

Gina Planas:

For those listeners who aren't familiar with it, what is Coop57, and how did the project come about?

 

Raimon Gassiot:

Coop57 is an ethical and caring financial services cooperative that collects people's savings for the sole purpose of funding entities in the social and solidarity economy.

We're a cooperative, not a bank. Although we carry out a financial activity, we're not a bank, and this difference is based on two key features. The first of these is that, instead of customers, we have members, and we provide a service to our associates. This means that our relationship is different from the customer relationship. The other key difference is that we're fully self-regulated and self-managed. We thus collect savings from among our members, which we can then use to grant funding to other members; and together we decide how we do it, in what way. We do it democratically and listening to everyone: we decide what types of financial products we offer, the interest rates we apply to both savings and loans, and so on. It's a fully democratic process.

Coop57 started, was created, in 1995 following the labour struggles of a group of former employees of Editorial Bruguera. When this publishing house closed, the employees received compensation for unfair dismissal. They pooled part of this money and created a collective fund to finance self-employment and self-managed projects. They wanted to carry out economic projects that were not motivated by capitalism, the reason why Editorial Bruguera had closed. Over time, Coop57 started to cover not just self-managed cooperative projects but the social and solidarity economy as a whole, and over time this seed that had been planted in Catalonia started to be replicated in other places, and Coop57 developed a network-based development model covering various regions and various regional associations.

We currently operate in Catalonia, Aragon, the Basque country, Madrid, Galicia, Asturias and Andalusia. In addition, we have promoter groups in Mallorca and the Valencian region.

 

Gina Planas:

As we mentioned in the introduction, in 2017 - five years ago - the City Council and your cooperative concluded an agreement creating a joint economic fund to provide security for potential bankruptcies or payment defaults. Do you think the fund has served its purpose? In other words, has it reached entities that were struggling to obtain credit? And what's your overall assessment after these five years?

 

Raimon Gassiot:

Our assessment is very positive, because over the last five years we've granted over 110 loans, more specifically 113, for a total of €5.2 million, which we think is very important because, to some extent, it has allowed us to achieve the original goals, the original motivation behind this fund, which is the ability to provide finance to new entities, new social and solidarity economy projects, and we've achieved this to a great extent.

When we found ourselves in a pandemic, we saw that there were needs for liquidity, for cash, and that some organisations had been greatly affected by the pandemic and the restrictions put in place to fight it, and they needed financial support in a very complex and difficult context. 

This source of funding helped address this, and we believe it's a very good practice, because having a joint funding strategy with Barcelona City Council in this case means that we can multiply resources, and we've been able, with limited public resources, to grant this funding of over €5 million, which we think is a very positive cooperative or public partnership practice.

 

Gina Planas:

One of the risks of credit systems is the risk of default. But this hasn't been a problem in your case, as shown by your 1.7% default rate. This is a very good figure, isn't it?

 

Raimon Gassiot:

Yes, it's good because, in addition, part of the point of this fund was precisely to meet special risk needs.

If you consider that this default rate is far lower than that of conventional banks and is within average figures for banking or ethical finance, bearing in mind that its risk is much higher, we think the fund is working well and is in fact achieving its purpose, which is to provide security for these operations but with the aim of not having to actually use it. In other words, the fact that we haven't had to use these funds means that there were no payment defaults and, therefore, that the projects are making good progress.

 

Gina Planas:

In short, this joint municipal fund has proven to be a useful tool for funding social and solidarity economy projects in the city. As we were saying, we've provided access to over €5 million worth of funding to over 100 projects. 

In view of this information, what are your challenges for the future? And do you think this funding model can be extended to other city councils or public authorities?

 

Raimon Gassiot:

We think it's a good practice, and we tell people about it wherever we go. In fact, the same model - although on a much smaller scale - has been replicated by Mataró City Council, and we think it looks promising.

Did you say something? Ah, no, sorry. 

So it's been replicated in other city councils, we're extrapolating it to other settings. I know it's been discussed with the Network of Municipalities for the Social and Solidarity Economy and... anyway, there are good practices.

And the challenge in Barcelona ​​is how to continue with these good practices. The way we see it, we have the political will to carry out projects, but we think the City Council wants this too, because we see it as a good thing and the idea is to gradually adapt it to the needs that are identified at any given time, which is what we've been doing. In other words, we took the original idea, which was basically for new projects, and were able to adapt it for use in a very specific context, which was that of the pandemic, and now we can see that we're looking at very uncertain economic times and things may be very difficult in the next few years. 

We know the sort of thing: uncontrolled inflation, rising interest rates, the effects of rocketing energy prices and so on. Supply chains are breaking down at international level, and we don't know to what extent this may affect the social and solidarity economy. So we're sure that all our funding and risk-sharing mechanisms with public authorities, such as this one, will be good.

 

Gina Planas:

And probably more necessary than ever.

 

Raimon Gassiot:

Of course!

 

Gina Planas:

Well, thank you very much, Raimon Gassiot, assistant coordinator of Coop57, for talking to us today. Until next time. 

And goodbye from Gina Planas.

 

***

 

Xavi Rubio Cano:

We're kicking off our first chat about the social and solidarity economy in the podcast Les Veus de l'Economia Social i Solidària, and today we're doing it with a very important topic, the topic of ethical finance. We'll be talking to people from organisations in the city's social and solidarity economy, including Karel Mena Santos from the cooperative Periferia Cimarronas and Joan Mate from Producció d'Energia Maresme 128 (from now on, "PEM 128"); and Raimon Gassiot from the financial services cooperative Coop57 and also to Manel García Padreda from the City Council's Department of Social and Solidarity Economy Services.

I too am a member of this organisation. My name is Xavi Rubio Cano, and I'm the head of the Social and Solidarity Economy department. It's a pleasure for me to lead this chat, because we'll be talking about an important financial instrument that has been driven primarily by Coop57 in partnership with the City Council but that, above all, has been useful to the two guest organisations who are joining us today.

If it's OK with you, we'll start by talking to Raimon and Manel about... In late 2016, Coop57 and Barcelona City Council decided to create this municipal fund to promote access to funding for social and solidarity economy projects, so we've already got five years' experience behind us.

Raimon, can we please have an overview before we start talking about today's two specific projects? 

 

Raimon Gassiot:

Yes, the overview is that we've created a joint fund to cover potential payment defaults on a line of funding launched by Coop57.

Under this line of funding we've granted over 110 loans worth over €2 million in total... over €5.2 million, which itself bears witness to the importance of this tool. It's only had to deal with one case of default, which is less than... it's just over 1.7% of the total line of funding, and that's... The main thing for us is that this line of funding has enabled these more than 110 projects to go ahead. 

 

Xavi Rubio Cano:

In this regard, Manel, we're talking about five years, but there's a before and an after, isn't there? The partnership agreement was renewed in 2021, mainly to deal with the fallout from the pandemic not just for the fund but for Barcelona's and all other cities' social and solidarity economies as a whole, you know?

This change, this renewal... What can you tell us about this difference? 

 

Manel García Padreda:

Well, the fund's public policy has had good results. For a sum of... Firstly, it's a fund provided by the two entities involved, Coop57 and the City Council. It started as €100,000, then it was extended to €200,000 because the fund was starting to operate and the volume of loans and credit facilities and the social economy's reaction were both very positive, so this second expansion was very important because of the pandemic, when social economy entities had a very significant need for liquidity.

However, as a public policy assessment, i.e. one with scarce resources, Barcelona City Council has contributed around €350,000 in total and, since Coop57 has granted €5 million worth of loans and credit facilities, you can see that it's a really good multiplier. For every euro provided by the City Council, the social economy has received ten. So it's a positive policy. 

And we believe it's been positive because of when it came out: the pandemic has been a very hard time for the social economy, and it'll also be a useful tool for the social economy in the economic crisis that may be coming.

 

Xavi Rubio Cano:

Let's move onto Karel and Joan, the stars of this chat. Karel and Joan, can you first tell us about your organisations and what you do, so that our listeners can be inspired by you, and why you needed funding and decided to approach Coop57? Does that seem like a good idea? Will you start, Karel?

 

Karel Mena Santos:

Yes, thank you. Good morning. 

I'm a member of the Periferia Cimarronas team, a workers' cooperative whose aim is to highlight and promote Barcelona's Afro-descendant, racialised and migrant culture.

Broadly speaking, the project involves creating cultural spaces based on three aspects: a store selling social economy products made mainly by migrants and people of African descent, handmade products made in accordance with sustainability criteria; a café that also operates in accordance with sustainability criteria and sells food products linked to Africa, which is a very broad range; and a theatre, with shows whose protagonists are us, those same people, people who are used to hearing others talk about them but who never speak themselves, and that's one of the cooperative's goals.

It also aims to provide decent jobs amid the precarious job environment we're currently seeing in the world of culture, the cultural sector. These are two important goals. 

For us, the fact that Coop57 was there gave us a very big push, because we all know what banks' terms and conditions are like. They're abusive, and we wouldn't have been able to carry out such a big project without Coop57's help or the funding and guarantee fund, under which we all together somehow take on the risk of carrying out a project of this size in a post-pandemic world.

So we're very happy. We've used part of the funding from the first tranche, from this first part, to remodel the premises, and we're about to open in September.

 

Xavi Rubio Cano:

Address, please, Karel. Where can we find you?

 

Karel Mena Santos:

Address. The address. We're at Carrer Cerdanyola 26, baixos.

 

Xavi Rubio Cano:

Great. In which neighbourhood?

 

Karel Mena Santos:

Sants.

 

Xavi Rubio Cano:

Great.

Joan, let's now go to the other end of the city: What is Producció d'Energia Maresme 128, and how do you know Coop57 and the importance of all this?

 

Joan Mate:

Well, our project in Barcelona's El Besòs neighbourhood came out of the need to make improvements to our building. Our building was built in the early 1960s and suffers from many defects, basically because of today's demands in the collective sense.

A few residents saw this need and decided to take the initiative and, as we were starting to think about it, it also occurred to us that the condition of homes in working-class neighbourhoods is constantly deteriorating and we working-class people don't think about how important home maintenance is, even though having a home in good condition to live in is one of our most basic needs.

So, in view of all this, we carried out a technical building inspection (ITE) on the building, which revealed some significant problems. We started talking about going further, about looking at the energy issue, everything to do with waste and what dirty energy means these days. So we started discussing the possibility of carrying out a complete refurbishment of the building with a group of engineers, and we got started: we applied for a subsidy from the Ministry of Industry but, once the project design was ready and the subsidy had been granted with European funds, we still faced the issue of funding. And, as usual, two or three residents had a look to see how financial institutions might...

In the middle of all this, we weren't quite convinced of what it seemed, of what it meant for residents and so on, and that's when the possibility of doing it with Coop57 arose. They told us they provided ethical finance and gave us this opportunity. And yours truly had to explain what Coop57 meant and where it came from. I'd already had quite a bit of contact with Coop57 in the trade union context, through the Catalonia Workers' Association (FTC).

So, when the time came, we talked to Coop57, and this is what it meant for us: the first point was that these people were workers asking other workers for money. That was the first point. Second point: we needed a loan that we could be certain that, whatever problems might arise, would not lead to the foreclosure of our flats. In addition, we also knew from the history of our owners' association that the likelihood of defaulting on the loan was very low, so we were already sure that we wouldn't have this problem.

So we got down to business. We talked to Raimon, to Raimon, and then to Ramón and Guillem, and we got started with the co-funding.

 

Xavi Rubio Cano:

Joan, Karel, also thanks to the proposal made by Coop57, its head of communications, including Xavi Teis, we have two projects covering not only the entire city - Joan on the east and Karel on the west - but also the social and solidarity economy as a whole. You mentioned housing as a basic need, like the old "bread, roof, work" slogan, and I would add to this "caring for people", because Joan from Producció d'Energia Maresme 128, a workers' cooperative, explains the roof part and, as Karel explained very clearly, the project is broad and includes various lines of activity, but it also covers food, work and care, doesn't it?

This summarises what the city's social and solidarity economy is and the existence of a financial services cooperative such as Coop57. In relation to this, Raimon, how do you carry out your analyses when you receive financial proposals from projects or organisations such as the project brought to you by today's guests, Joan and Karel? In summary, how do you consider and decide whether they can be helped by this fund that we're working on and building with you, so that anyone listening can say: "This means that I too might be considered for funding if I first became a member of Coop57"? 

 

Raimon Gassiot:

Yes, the first thing we do is analyse... In order to obtain funding from Coop57, an entity must be a member of Coop57. And membership of Coop57 is not open to all entities: they must be social and solidarity economy entities and fulfil a number of requirements. If they meet these requirements, we go through a process of analysis, of getting to know the entity, and it's very important to us in particular to see that their projects are useful for society, which was obvious in this case. 

Once we've done this and the entity joins us as a service member, our maxim is that we must do everything we can to solve its financial problem, provided it is within our power. We then carry out a more technical analysis to see if the project they want to carry out is viable, if we can do all that... In other words, we carry out an analysis based on the... 

In this case, we're looking at two new entities. We can't look at their history, so we have to analyse their project, and in such cases trust - i.e. our trust in the groups behind these two projects - is very important for us too. It's something that's very hard to gauge objectively.

And this is what we work on. We basically work on this funding.

The two projects are very different, but we believe they're both of great benefit to society, that they can be landmark projects. In other words, I think that a project involving racialised migrants talking in the first person and creating their own spaces can be very beneficial, and a comprehensive energy rehabilitation project for buildings that raises the possibility of also producing some of the energy they consume, and that does so collectively, sowing a small seed of something that is now so talked about, which is energy communities, is also very interesting in our opinion.

And, in these two cases, we think about the impact beyond the project itself. In other words, these projects can help other similar projects that may arise.

So they are the parties with the biggest interest in ensuring they don't fail, and so are we, and together we try to do it like this.

 

Xavi Rubio Cano:

Joan talked about how things were being said: "I talked to Raimon, I talked to Ramon, I talked to Guillem..." This shows the trust in the project itself as well as in the people at Coop57.

Karel, Joan, is there anything you'd like to add? Thinking in particular about other people and organisations that have a tool such as Coop57 available to them, please add whatever you like.

Karel was saying before: "We want to speak with our own voice." So here's your chance, Karel: please go ahead.

 

Karel Mena Santos:

Many thanks.

 

Xavi Rubio Cano:

Would you like to add anything? 

 

Karel Mena Santos:

Let's see. I'd like to add... Well, I'd mainly like to say how grateful I am, because a project such as ours that is so unique, that entails risk - because it does - the fact that it's been welcomed by Coop57 with care and affection form the start, the fact that they mentored us the whole time to make sure we'd do it right, to make it possible... I really appreciate all this, because this isn't something you can find anywhere else. 

You always need support, and a financial institution with friendly faces is very different from going to a bank window. 

 

Xavi Rubio Cano:

Joan.

 

Joan Mate:

Yes, that's basically it: what you just pointed out. The truth is that we talked to various people, they considered the project... 

There were three of us who were representing our owners' association of 42 residents who... Well, we were looking at something that is proving to be increasingly necessary. And I think it makes perfect sense for the social and solidarity economy, ethical funding, to invest in this, and there are certain needs.

In our neighbourhood, our project has led to people asking questions, getting together. Another owners' association three streets down from us is already getting started. We told them about Coop57, although I don't know what they're doing in the end. Maybe one day they'll turn up to talk to you or they'll ask us to introduce them to you, we'll see. In addition, there are other organisations from the world of cooperatives in the neighbourhood, the field of housing... The Cooperativa de Vivendes del Sagrat Cor de Jesús cooperative, which is currently looking at whether it can do anything else with the buildings it has built, whose owners haven't yet fully decided to get started in this world because it seems too big an investment and they're feeling nervous. 

Society in general, particularly when it comes to money matters, is feeling nervous, and the housing cooperative is also considering somehow supporting this, and then we'll have to see whether or not we need more funding or what will happen in the end. 

But things are starting to happen now, and the fact that there's funding available has helped things get started in a neighbourhood outside the city centre.

 

Xavi Rubio Cano:

Exactly: Periferia Cimarronas opens at the end of September. Look for it on Carrer Cerdanyola, 26. And these seeds, these conversations that Joan said are taking place in the neighbourhood of El Besòs, are a good thing, because the storms of the social and solidarity economy are brewing, and this is a good way to end this first chat of the podcast Les Veus de l'Economia Social i Solidària.

Today we talked about a project with a long history, the financial services cooperative Coop57 which, thanks to the efforts of those 57 people, provides a tool that now serves the city, Catalonia and other sister territories in Spain and, as also mentioned by Joan, behind Coop57 are real people with names and surnames and the friendly face Karel mentioned, and there are also people like that in Barcelona City Council, as mentioned by Manel.

We'd like to thank you for the work you do every day. Joan and Karel, good luck moving forward with your projects. And, as to the other projects and organisations in Barcelona's social and solidarity economy, there's ethical finance, public policy, health and cooperativism.

 

***

 

Gina Planas:

We hope you've enjoyed yourselves as much as we have.

Today at Les Veus de l'Economia Social i Solidària we talked about the origin, present and future of ethical finance together with several protagonists of the sector, who explained what ethical finance is, what it means to them and how it has enabled them to make their projects a reality. 

Before we finish, we'd just like to thank everyone who has taken part in this first episode, as well as everyone who is listening. We hope we've helped shed some more light on the new ways of doing business in Barcelona and around the world in a more collaborative, inclusive, local, sustainable and caring way.

Remember that you can listen to Les Veus de l'Economia Social i Solidària on iVoox, SoundCloud and Spotify. We hope you will join us again for the next episode of this new podcast that we started today so we can learn more about the exciting, yet still fairly unknown, world of the social and solidarity economy.

See you soon.