February/March 1983 RAIN Page 19 Loan Fund, for larger investors that will lend at their own risk, to members; and the SHARE Trust Fund, a way for donors to give to community-supported cultural programs. The purpose of the Credit Fund is to furnish collateral on loans that develop the region's self-reliance in food, shelter, energy, or community services. Upon becoming a SHARE member ($10 initial fee), the depositor opens a joint passbook account between the Credit Fund and the individual. As part of the joint account, the depositor must sign an agreement that permits up to 75 percent of the account to be used as collateral on loans the SHARE Board decides to facilitate. And with the support of the SHARE Associations, risk on the loan is nearly removed from the bank and spread around the community. Interest rates, then, are 10 to 13 percent. An unusual bargain. If a borrower takes a loss, the cost to the collateralized Credit Fund accounts is agreed to be a percentage of all the accounts, so depositors would collectively share in repaying the loan. In practice, however, the associations' and the depositors' interest in the success of the borrower's project nearly assure that the loan and interest is paid to the Bank in full. The Direct Loan Fund is intended for larger investments than the Credit Fund, assisting businesses, entrepreneurs, or individuals. SHARE initiates the Loan Fund by advertising loan project proposals that have been approved according to SHARE'S self-reliance criteria. When lenders are attracted, they choose a project in which to invest and then deposit their capital in the Loan Fund at the Great Barrington Bank. They also set the loan's duration and interest rate. Once the community demonstrates support for the loan through SHARE co-signers or advance contracts, the Bank administers the loan for a small fee, about two percent on the loan's interest. Since larger investors can actually see the community project and its opportunities, their risk is low and, with SHARE'S backing, are likely to invest. In an effort to invigorate the cultural and educational health of Great Barington, the Schumacher Society estasblished a gift fund. The SHARE Trust Fund, as a non-profit organization itself, disseminates a monthly list describing educational and cultural programs of local groups. Because these programs meet SHARE criteria, gifts can be made to local organizations via the Trust Fund. Grants from the fund are given to non-profit organizations that apply with letters of community support. In addition, the Direct Loan Fund works like a cultural fertilizer through the Trust Fund: businesses receiving a Direct Loan must return a percentage of their profits to the Trust Fund or donate to a community organization. SHARE coordinators point out that "the Trust Eund is not attempting to achieve the highest financial return for its depositors, rather a fair return with the highest social and ecological return." Just as SHARE and its productive relationship with the local bank demonstrate close cooperation, banks elsewhere have much to gain from the SHARE concept as well. New depositors, for example, would be attracted. effectively expanding the bank's collateral base. The positive local image earned by a bank helping to improve the community's self-reliance produces another advantage: in the future, businesses seeking capital are likely to patronize that bank first over others. And the bank would not be forced to refuse as many loans, since questionable risk to the bank is absorbed by the community organization similar to SHARE. The potential for such community-based investing is also being discovered by the Solar Center in San Francisco (1115 Indiana, San Francisco, CA 94107). Depositors at Continental Savings and Loan may specify that their funds be made available for loans to buy solar heating equipment. This allows depositors to put their money to use for social and ecological purposes, besides earning fair interest rates. This solar fund now exceeds two million dollars in less than two years. Continental is pleased, too. These are funds that probably wouldn't have otherwise been brought to the bank. One word of precaution. SHARE'S inihal success has not come between new moons; the E. E. Schumacher Society devoted much time, self-instruction, and planning to the program. Since its foundahon rests on associations that represent small scale interests in the community, building these new organizations would best precede a serious effort to create such self-financing programs. Strengthening the community support first also shows credibility in the banker's eyes; this creates confidence and trust that is so valuable later on. Susan Witt and Robert Swann of the E. F. Schumacher Society and the Intermediate Technology Development Group (ITDG) plan to discuss SHARE in their third seminar, Tools for Community Economic Transformation, scheduled for June 12-18 in the Chicago area. Other topics will include Community Land Trusts, community land banks, self-financing systems, and community selfmanagement. For more information, contact the E. E. Schumacher Society, Box 76, RD 3, Great Barrington, MA 01230, 413/528-1737 or ITDG, 777 United Nations Plaza, New York, NY 10017, 212/972-9877. DD y 'i
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