FGV EAESP

Community banks in Brazil are solidarity practices which started with the Banco Palmas experience. This first bank establishes its own methodology for organization and local development based on the solidarity economy (SINGER, 2004). In this context, the bank must be managed by its own community and must support local enterprises with little or no technical organization and capital, called by Santos ([1975] 2008) as a lower circuit, to generate local development. They usually operate with credit for consumption (with interest-free local community currencies at parity with the national currency) and credit for local production.

Community bank experiences have reached the number of 147 initiatives in Brazil, based on this methodology presented, which have spread throughout the Brazilian territory supported by federal public policies, called solidarity finance (2006 and 2015). Without the support of the federal government, the Brazilian Community Banks Network (BCBN), the main articulator of these local solidarity experiences, has sought alternatives for financial self-sustainability. With the regulation of electronic money use in Brazil (federal law 12.865/2013), BCBN started considering the possibility of maintaining community banks with revenues coming from a digital platform (E-dinheiro).

In this process of expansion of municipal digital currencies by BCBN, tensions between governments and fundamental solidarity economy principles of community banks can be noticed. The Mumbuca case is paradigmatic because it brought about a coexistence between solidarity economy, local development and public policy. The 10 new Brazilian experiences analyzed - notably the Arariboia case, in the municipality of Niterói (RJ) - indicate that the municipal government may not be attentive to the needs of the communities or taking advantage of synergies that already exist in the municipalities, distancing itself from the guiding principle of the solidarity economy. Therefore, it is necessary to create an agenda so that the co-participation between community actors and public authorities is effective, contributing for the expansion of the methodology of existing community banks.