Right to credit and financial exclusion, by Anne Michel
In France, has not the moment come to declare the urgency of the fight against financial exclusion?
While trying to provide answers to the crisis in the suburbs, keep away from the banking system the five million people who are now bankless or access to credit – 10.7% of the population over the age of 18 is a political, economic and social miscalculation. It is known that by depriving individuals of a bank account or by denying them credit on the grounds that they have low or modest incomes, they are condemned to social exclusion. Increases inequality when it comes to reducing the social divide.
Moreover, doing nothing against financial exclusion hurts economic development. The experience of the United States, which forced banks to finance the poor, through a Community Reinvestment Act (1977) passed in response to the anti-segregationist movements of the 1960s and 1970s and relaunched by Bill Clinton in 1997, to be meditated. It shows that wealth is increased by opening access to credit to people living in disadvantaged suburbs. In Chicago, a local bank, the Shore Bank, has rehabilitated, in just twenty years, entire neighborhoods, previously economically and socially damaged, allowing the black community to acquire housing and create micro-businesses.
The US model also shows that social banking can be profitable: US banks do not lose money by serving disadvantaged households. On the contrary, the 40,000 credit institutions in the disadvantaged suburbs function as real market banks, some of which even make significant profits. Bank of America, the second largest bank after Citigroup, today thanks to the legislator for having directed it on such a lucrative sector.
In France, there is still some way to go to make the fight against financial exclusion a national priority.
While recognizing that their actions may lead to exclusion – which they refused to admit two years ago – the big banks do not seem ready to reintegrate the socially excluded, the unemployed, RMIstes or even modest households, in their lap. Focused on gaining market share, they are developing in the most profitable sectors, posting ever higher profits from year to year. Crédit Agricole made more than one billion euros in profits in the third quarter alone, a record.
But not only do banks have the means to take their share of the collective responsibility for exclusion – without undermining their profitability, as we see in the United States – but they must admit that they are not an economic activity like any other. As Daniel Lebègue, former director general of the Caisse des Dépôts et Consignations, Daniel Lebègue, who was director of the Treasury from 1984 to 1987, has said for a number of years, the banking sector is the blood system of a society. It must ensure the best possible circulation of money and fulfill its function of allocation of capital to the needs of society. Otherwise, it does not play its full role in the economy.
Every individual in France should be able to access the financial services like payday loan consolidation he needs to live in a society. As was the case on the other side of the Atlantic, nothing, no doubt, cannot be done without a political impulse. And, again, it seems to be lacking. Admittedly, small steps have been taken by left and right governments to stop financial exclusion: for example, with the recognition of a right to the account, in the 1998 Aubry law against exclusions, or more recently, with the creation, in January, at the initiative of Jean-Louis Borloo, Minister for Employment, Social Cohesion and Housing, of a Social Cohesion Fund to guarantee micro-loans, loans that allow excluded social to start their business.
But these advances remain insufficient, as is also the promise made by the Prime Minister, Dominique de Villepin, on September 16, before the National Council to fight against precariousness and exclusion, to create a universal banking service accessible to all. , to stop financial exclusion. By such an initiative, Mr. de Villepin does nothing more than generalizing access to the account and the means of payment. It completes the policy that had already begun Georges Pompidou.
But France needs a real public policy on financial exclusion, which not only solves the problem of access to the account but also that of access to credit. Financial exclusion cannot be totally fought, as long as the right to credit – to create businesses but also to finance basic necessities or to acquire housing – will not be recognized as a fundamental human right. We do not know enough that more and more people come to the counters of the Municipal Credit, this pawnshop, to seek credits of 50 and 100 euros, which had never been seen …
Opening the debate on the right to credit presupposes the removal of certain ambiguities, as well as the fact that it is not a question of encouraging over-indebtedness, or of allowing credit institutions to suffocate the poorest. prohibitive tariffs and rates. As in any rural society, where only savings are virtuous, there is in France a strong mistrust of credit.
Once these questions are resolved, it will be necessary to ask the question of new tools to invent, to distribute the credits to the most deprived in the most effective and safest way. An idea, especially defended by François-Xavier Bordeaux, president of a Bordeaux solidarity bank, would be to set up a public social credit service, which would welcome everyone, regardless of age or guarantee, with loans from 100 to 10,000 euros. This public social credit service would involve private banks, microcredit associations such as Maria Nowak’s Association for the Right to Economic Initiative (Adie), already very active, local authorities and the state. Banks are not structured to accommodate the socially excluded, a clientele that requires social support, it is the combination of skills of one and the financial means of others that will solve the problem of financial exclusion.