Microfinance and common goods: A study of Brazilian community development banks

Abstract

Inclusive financial sectors are essential in terms of poverty alleviation. While microcredit can be governed as a private good, self-managed civil society organizations propose an alternative way of managing financial services. Brazil's Community Development Banks (CDBs) are a growing and dynamic manifestations of these nonprofit organizations. Based on field research in Brazil, this article uses the Elinor Ostrom's design principles of successful self-governing common-pool resource institutions to analyze CDBs' microcredit system. Our results suggest that the characteristics of private goods could be reconsidered when they are governed by community self-managed enterprises. They become hybrid goods by mixing the characteristics of private and commons goods. Thus, specific institutional arrangements and the creation of public spaces make it possible to strengthen the community properties of nonprofit microcredit services and distances them from their characteristics of private goods. resource institutions to analyze CDBs' microcredit system. Our results suggest that the characteristics of private goods could be reconsidered when they are governed by community selfmanaged enterprises. They become hybrid goods by mixing the characteristics of private and commons goods. Thus, specific institutional arrangements and the creation of public spaces make it possible to strengthen the community properties of nonprofit microcredit services and distances them from their characteristics of private goods.

Finance as a commons understood as ideal-type for emancipation / Chapter 7

“…In the case of an emancipated use value (Figure 3), experiments and recent developments aimed at supporting emancipation must be made evident, and one must construct renewed solidarity via, for example, fair trade, shortcuts, or a local currency that serves a territory, as in the case of the Banco de Palma (Hudon & Meyer, 2016). It is possible to find this dynamic in other domains, such as brand communities constructed around a shared passion, as in the case of Ducati, Alfa-Romeo and Nutella (Cova & Paranque, 2013.…”