COLLECTIVE ACTION TO HELP THE MOST VULNERABLE

AS THE financial situation worsens around the country and the government battles to reignite the economy, the time has come to look at other ways of stimulating development and assisting communities most at risk.

One area that is showing promise is collective action and entrepreneurial activity involving common resources.

These resources are called the “commons”. They refer to shared, accessible and collectively owned assets. Many common-pool resources already exist – like water and land. Commons can be managed and used by social entrepreneurs to generate income to boost local development and create jobs.

The aim is not necessarily to make a profit, but to help all members of a community share a resource equally and equitably.

In my recently published paper, I compared the different approaches to five community banks in Brazil.

In 2011, around 50% of Brazilians had no bank account and were effectively excluded from financial services. In 10 years, the number of community banks increased from one to 103. Community banks serve members of a particular community. Typically, they lend money at interest rates fixed by the community, assist in setting up local businesses and sometimes hand out credit that can be spent on businesses in that area.

For some time, scholars have argued that it’s possible for enterprises run by collectives and communities to be agents for social change. But there have been lingering concerns about the relationship between the social and commercial objectives.

To de-commodify goods and services, they need to be sold for their value of use and not their value of exchange, so that they can be considered as socio-economic goods.

Nobel prize-winning US economist Elinor Ostrom has set out possible solutions. These involve putting in place collective governance structures of the commons and mechanisms of social control facilitated by the social entrepreneurs. This was the prism through which I explored the Brazilian community banks. My research found that the banks that were the most successful in avoiding the commodification trap did three things.

Firstly, they included community members in decision-making for the governance and management of the bank and its financial resources. This principle of self-organisation is put into practice by inviting local citizens and community leaders to discuss the venture and how it can benefit the community. In community forums and the boards of directors, leaders and members bring and select community demands to embed the bank in the territory and guarantee that financial resources are adapted to local needs.

Secondly, with the objective of promoting financial inclusion, community banks enacted the principle of the right to access finance.

Considering that access to financial services should be a right for a fulfilling economic life, community banks offer financial services where traditional banks do not operate, making them accessible to excluded populations.

Entrepreneurs and bank employees also use a language that is easy to understand for community members and offer financial programmes.

Thirdly, social entrepreneurs in community banks promoted the autonomy of the community and expressed solidarity towards community members. By mobilising community members to establish the venture, entrepreneurs educate their peers and make it possible for members to serve on boards and committees.

Feeling a moral responsibility towards a community, they also show personal commitment to address community demands.

South Africa is primed for such initiatives. With some support, entrepreneurial schemes that have the scope to assist many could be expanded and made more accessible to more people.

Assisting communities to organise themselves for their own benefit has the added value of boosting self-esteem and building community pride.