Global alliance sees strength in numbers

The Global Alliance for Banking on Values, a new group formed by 11 banks focused on microfinance and community banking, is viewing the current recession as an opportunity to make an impression—and gain market share—in the world’s financial market.

The alliance, which has collective assets of more than $10 billion, came together through the sponsorship of The Netherlands-based Triodos Bank, Chicago-based ShoreBank Corp. and Bangladesh-based BRAC Bank.

While under development before the 2008 financial market collapse, the alliance is poised to offer sustainable solutions for both values-based banks and standard bottom-line banks that may be struggling in the current recession.

Triodos’ research led to the recruitment of the founding 11 banks, each of which affirms the triple bottom line—social, environmental, and economic—as their primary purpose, rather than a sole focus on profits. Even so, the banks are prospering during the recession in ways that banks motivated solely by profit can only envy.

“All these banks in the global alliance do old-fashioned banking,” says Mary Houghton, a founder of Chicago-based ShoreBank Corp., an early proponent of microfinance. “We know our customers as human beings, working for long-term relationships built on trust and sustainability. It’s what the large banks forgot in all this financial engineering and de-personalization of decision making.”

The alliance does not currently include Illwaco, Wash.–based Shorebank Pacific. Peter Liu, a founder and director of San Francisco-based New Resource Bank, the alliance’s only other U.S.-based member, says the No.1 benefit of being in the alliance is information sharing. “We’re germinating new ideas, some of which are being copied by national banks,” Liu says.

New Resource Bank, which was created to meet the banking needs of entrepreneurs working on environmental issues, differs from ShoreBank, which was created to serve the needs of low-income and minority communities, according to Liu. That diversity is apparent across the entire alliance, Houghton adds. She says she sees such diversity as positive, and says she expects the alliance to grow by adding banks with different focuses while staying true to sustainable principles.

While currently focused on information sharing, the alliance’s steering committee will meet for the first time in June to set action priorities with possible goals as diverse as continuing to advocate publicly for banking on values, broadening the interties between alliance members, joint investments in new banks, and selling parts of oversize loan packages to other group members.