4 Co-operative Fund

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4 Co-operative Fund: Real fund for social entrepreneurs!

Project Stage:
$1,000 - $10,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

For years now we are engaged in social entrepreneurship and we know its specifics and needs. We know how difficult it is to raise funding or guarantees on commercial terms. Especially when members of those cooperatives are people at risk of social exclusion and their business has been working for less than a year. That's why we want to create non for profit, mutual loan& guarantee Fund for social economy which is totally new in Poland.

About Project

Problem: What problem is this project trying to address?

The problem is the financing gap in the access of Polish social economy entities - SEE (social-, labor- and disabled cooperatives, NGOs, not profit companies) to the external financial instruments other than public . This problem consists of a number of factors: 1. PUBLIC FUNDS ONLY AT THE BEGINNING The most popular type of financial support in Poland for the SEE, the public funds , including the EU fund. However, it is directed only to new social cooperatives to allow investment at the stage of its creation. 2. FINANCIAL INSTITUTIONS HAVE NO TRUST FOR SOCIAL ENTREPRENEURS Tminimal amounts of loans that financial institutions offer are often too high for SEE. 3. TOO HIGH MINIMUM AMOUNT 4. ONLY FOR SEE ABOVE 12 MONTHS 5. STEREOTYPES

Solution: What is the proposed solution? Please be specific!

The solution is to create in Poland mutual loan&guarantee Fund, that will financially support the social economy entities that: - has already benefited from public funds (eg. UE grants) and are eliminated form the possibility of applying for additional financial support - has difficulty in obtaining financial support on commercial terms - are not able to get guarantee - run social business for less than 12 months. Our Co-operative mutual loan&guarantee Fund will offer: - small amount loan at first (up to 10 000 PLN [ EUR 2,398 ]) - the period of loan repayment will be up to 36 months - 3-6 month grace period on repayment - favorable, competitive interest rates (depending on the risk assessment, but max. 12% per year).
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Meet SHE a social cooperative, that provides catering services. Its members include: long-term unemployed woman, 55 year old housewife and mother of 12 children. With the support of EU funds they purchased the necessary equipment. Now, after several months in business they already know that they need bigger steam steriliser, to get an order from the local school. But to buy one they lack PLN 1000 [240 euros]. Maybe not much, you will say - but none of their friends and family can not help them. So they check banks and loan funds offers – no success – to small amount. What about one of the most popular loan companies? Repayment simulation shows that when you lend 1000 PLN, you will repay 1964 PLN(!) They definitely need low percentage loan.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

Competition analysis shows that the loan and guarantee funds for the assumed profile lacks across all over the country. Therefore despite the fact that at the beginning of the Co-operative Fund's activity area will include only the West Pomerania region – as we know it is better to put the first steps on a known ground, eventually in about five years it is planned to extend the range of the Fund for the entire country.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

In terms of building social capital market at the moment in Poland there are only 3 institutions: - Society for Social and Economic Initiatives (affiliated to the European Federation of Ethical Banks). The difference: only for social economy entities operating in at least twelve months, 1-2% handling fee. - Polish-American Civil Initiatives Loan Fund, which provides loans to non-governmental organizations, most often used as a so-called "bridging loans" - when public funding is expected. The loan rate is 12% per annum for loans related to the implementation of projects financed from European Union funds. The difference: administration fee - 1% of the capital borrowed. - Regional Loan Fund Pomeranus. Loans to micro and small entrepreneurs in the West Pomeranian region. Difference: require a minimum borrower's own contribution - 20% of the loan, 5.0% of the loan amount fee.


Team members of the Fund, will be employees of the 4C and the Foundation. These people have extensive experience in evaluating business plans of social cooperatives, giving funds to start a business (so-called bridging support) and consulting on the business of social economy entities, financial management, etc. Managers of companies 4C and the Foundation will not only coordinate the work of the team but actively join the various activities.