This proposal aims to address the persistent financial exclusion of the poorest, who are either shut out of formal credit by collateral requirements or trapped in over-indebtedness by the high interest rates that commercial microfinance operators must charge to sustain themselves. It calls for building a public and cooperative solidarity-finance infrastructure that — unlike conventional banks and market-driven microfinance — treats credit not as a commodity but as a lever for endogenous territorial development. Concretely, the proposal advocates scaling up Community Development Banks (CDBs) and solidarity finance, drawing on the pioneering experience of Banco Palmas (Conjunto Palmeiras, Fortaleza, 1998) and its expansion through Brazil’s National Secretariat for the Solidarity Economy (Senaes) into the Brazilian Network of Community Banks (RBBC, 167 CDBs as of 2024), alongside Solidarity Revolving Credit Funds and solidarity credit unions — structures that offer microcredit for both production and consumption, rely on social collateral grounded in collective trust rather than individual creditworthiness, and take as their performance criterion the social utility of enterprises for the territory rather than returns to shareholders. It also calls for the development of local social currencies as complementary instruments that circulate wealth within the territory, stimulate local consumption, and reorient economic life from individual accumulation toward collective wellbeing. The question is the creation of enabling legal and institutional frameworks for solidarity finance, building on ongoing discussions between Senaes, the Central Bank of Brazil, and a dedicated parliamentary committee toward a national legal framework, and on cooperative financial institutions (credit unions, people’s banks, rural savings banks) rooted in the 19th-century Schulze-Delitzsch and Raiffeisen traditions, whose “deposit-first” model mobilises local savings as patient capital. Implementation should be co-constructed with affected communities rather than designed top-down: the public character of the policy is defined by those it serves, not by the institutional nature of the actor initiating it.
Co-constructed public policies (including legislation) for territorial SSE ecosystems development are emerging in a growing number of countries around the world. The scope to reducing the enormous shortfalls in financing for SSE development, especially in the Global South, has greatly been enhanced by the integration of SSE in the United Nations renewed Financing for Development Agenda. To guard against risks of institutional isomorphism and technocratisation that potentially much greater national and international development financing for SSE presents, the preferred approach is to channel additional resources through democratic SSE intermediary mechanisms that can ensure that such support responds to context-specific grassroots territorial needs and aspirations. These democratic SSE intermediary mechanisms, established at national and where appropriate subnational levels, pool resources from public budgets, public development banks, multilateral development banks, official development assistance and philanthropy, and channel them in local currency and over long-time horizons to SSE entities and ecosystems. Co-governed by SSE organisations, communities and public authorities, they offer an alternative to conventional public–private partnerships and blended finance vehicles, whose governance and incentive structures have often prioritised private returns over social objectives. By rooting decision-making in territorial SSE ecosystems, such mechanisms can align financing with the lived priorities of people in poverty and strengthen democratic control over the uses of existing and reclaimed fiscal space. Prioritising their access to reclaimed resources, including through SSE intermediary mechanisms and local–national–regional SSE financing architectures, is therefore not a sectoral choice but a core strategy for redistributing power and resources towards those most affected by poverty.
Where states and international financial institutions develop policies and instruments to support micro-, small and medium-sized enterprises (MSMEs), they should systematically assess their relevance for SSE entities and ecosystems and, where appropriate, adapt or explicitly extend such measures to them. This includes adjusting eligibility criteria, collateral requirements, guarantee schemes, technical assistance and data systems so that access by SSE entities can be monitored and reported separately, making visible any gaps in support relative to conventional MSMEs.
At the national level, cooperation agreements between social policy and productive inclusion institutions and social and solidarity economy networks can serve as Country-platforms for designing SSE financing mechanisms. In Colombia, the agreement between the Administrative Department for Social Prosperity and RIPESS creates an institutional space to co-construct, together with local actors and public banks, democratic intermediary mechanisms that channel resources from development banks and international cooperation toward popular, social, and solidarity economies that are already supporting the just transition in the regions.
