The first ethnical bank could soon be founded.
The Cooperative for Ethical Finance announced recently that it had filed to the Croatian National Bank all the documents needed to establish the first ethnical bank in Croatia, reports Index.hr on October 13, 2016.
The Ebank ethical bank should ensure to its members-clients the best possible terms of banking. Due to its particular approach to doing business, as opposed to regular commercial banks, clients should have continuous support.
Ethical banks in Europe have total assets of 21 billion euros and as many as 528,000 clients. Although the concept of “ethical banking” is new for Croatia, in some European countries such banks have been operating for years.
FEBEA – European Federation of Ethical and Alternative Banks, which was founded in 2001 in Brussels, currently gathers more than 20 members including banks, building societies, and foundations. Although there are operational differences among them, they share the joint transparency in doing business and interest in societal benefits of their activities.
Ethical banks are those banks which put their focus on quality management of community resources, with the aim of increasing the quality of life of people in the community. Ethical bank must fulfil a whole set of criteria of ethnical banking. The most important criteria are transparency, solidarity, participation of clients and employees in the management of the bank, reinvesting profits back to the community, a more flexible attitude towards collaterals for loans, and focus on financing projects belonging to the sector of real economy.
When a loan request is being assessed, among elements taken into account is financial viability, but also its environmental and societal effects. A project must receive positive rating according to all criteria in order to be approved.
Due to all these elements, ethical banks better know their members and their needs, and such long-term partnership approach in the end results with better stability of ethical banks and their lower exposure to market risks.
