Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters!
Microfinance Institute Créa-Sol
The Microfinance Institute Créa-Sol (Crédit, Accompagnement et Solidarité, or “Credit, Support, and Solidarity”) was founded in 2005 by the Caisse d’Epargne Provence Alpes Corse in France. Its mission is to fight financial exclusion and to promote economic development in its region by meeting the financial needs of those who are excluded from the traditional banking system.
This model, based on the principle of “non-bank credit”, has the advantage of completely separating microcredit and traditional bank activities and, thus, of responding to the needs of those borrowers who otherwise would be denied credit because of the solvency criteria imposed on banks by financial market authorities.
Each loan is granted for a project that presents real economic returns potential for the borrower and according to a well-tested ethic in terms of both quality of the project and capabilities for success of the project initiator. MFI Créa-Sol grants loans at the market rate (currently 5% for microloans to individuals and business owners).
MFI Créa-Sol has five branches: Marseille, Avignon, Toulon, Nice, and Saint Denis de La Reunion, and is represented in Corsica through partner organizations. With a total balance sheet of 9 million Euros, 10 million Euros in loans disbursed, and 4 million Euros in loans outstanding, MFI Créa-Sol is a renowned actor for its role in the economic development of the region.
AN ORIGINAL FINANCING AND GOVERNANCE MODEL
Their financing model consists of four parts:
- It is currently funded by two sponsors: Caisse d’Epargne Provence-Alpes-Corse and Caisse d’Epargne Côte d’Azur (Corporate Social Responsibility Funds).
- The loan fund is fed by refinancing funds managed by the Caisses d’Epargne, the Caisse des Dépôts et Consignation, the Agence du Développement Economique de la Corse, and the European Investment Fund.
- The regulatory constitution of a self-guaranteed fund owned by MFI Créa-Sol, complementary to the current plans.
- Guarantees are overseen by the Fonds de Cohésion Sociale managed by the Caisse des Dépôts et Consignation for loans to individuals and by France Active Garantie for loans to business owners .
To ensure its growth, MFI Créa-Sol has implemented a unique self-governance model. Firstly, it is important to note that MFI Créa-Sol is a subsidiary of a traditional bank, which complies with the French Prudential Supervisory Authority. This status confers the MFI new obligations, particularly with regard to bank regulations, and it demands the highest degree of professionalism in its daily management.
Various audits completed so far highlight MFI Créa-Sol’s real quality. The MFI has become a renowned institution in the non-bank microcredit world. Its social and economic effectiveness needs no further proof, and it is now possible to foresee uptake of the model across France.
Créa-Sol is managed by a board of directors and an executive committee composed of qualified persons, most of whom are from the formal banking sector. An audit committee oversees risk management strategies and constant monitoring mechanisms. The staff comprises an Executive Director and 11 team members, all having a strong professional background in the formal banking sector.