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UniCredit Bank Austria presents "Social Impact Banking" in Austria

UniCredit Bank Austria presents 'Social Impact Banking' in Austria
  • With "Social Impact Banking" UniCredit Bank Austria bundles and strengthens its activities for a fairer and more integrated society: by granting special loans, passing on economic and financial know-how and the commitment of its employee

 

  • On the one hand, this initiative supports and finances companies and organizations that create measurable social benefits. On the other hand, activities and cooperation in the field of education strengthen the financial knowledge of the population

 

  • "Social Impact Banking" started this year in Austria, Germany and eight countries in Central and Eastern Europe. The initiative has been implemented in Italy since December 2017

 

 

"We are convinced that in order to do well, you have to do good", says Robert Zadrazil, CEO of UniCredit Bank Austria, about the new "Social Impact Banking" initiative. "We are aware that as banks we bear a special social responsibility: with our business decisions we can generate a lever effect that is far greater than in any other industry. We do not see ourselves exclusively as lenders. Rather, we want to be a driver and facilitator of change in order to improve our society."

 

With the "Social Impact Banking" initiative, UniCredit Bank Austria bundles and strengthens its diverse activities for a fairer and more inclusive society: by granting special loans, passing on its economic and financial know-how and the commitment of its employees and former employees.

 

Return of capital, not return on capital

 

The bank deliberately does not rely on donations or contributions, but on financing for socially committed companies and organisations that want to finance projects by means of loans and can also afford the loan. "However, here we offer them conditions that are well below the market level —according to the motto 'return of capital, not return on capital'. As with any other loan, it is important to us that each borrower repays the borrowed capital as planned. But we lend the capital on preferential terms. We place great emphasis on the concrete results of the individual projects, i.e. on the 'social impact', Zadrazil explains the concept.

 

First pillar: microfinance (microcredits) for micro-enterprises and special target groups

 

Micro-enterprises often find it difficult to gain access to traditional bank loans. UniCredit Bank Austria's microcredit programme goes beyond a normal business relationship between a bank and a business customer.

 

This creates a network that links the Bank, its partners and volunteers and supports microcredit borrowers through specific mentoring programmes. The main objective is to facilitate access to finance for people wishing to become self-employed:

  • Investment loans for small businesses with less than 10 employees and a maximum annual turnover of 3 million euros.
  • Financing the start-up or expansion of a small business
  • Duration: max. 5 years
  • Financing volume: up to 25,000 euros
  • Liability of WKBG (Wiener Kreditburgschafts- und Beteiligungs AG)
  • Companies with their registered office or branch in Vienna and throughout Austria are eligible as borrowers

 

A first example of success is the founding of a modern small confectionery in Vienna, which specialises in cakes for special occasions such as birthdays and weddings. UniCredit Bank Austria provided intensive support to the very young company founder on her way to a discounted microloan with WKBG liability —far beyond the scope of normal banking advice.

 

Special financing offers for the blind and visually impaired

"Social Impact Banking" also offers special financing for the blind and visually impaired — for important purchases such as an intelligent portable visual aid, barrier-free design of the home or a guide dog for the blind. The first point of contact for people in need of such financing in Austria is the "Hilfsgemeinschaft der Blinden und Sehschwachen". The independent, non-profit association is a cooperation partner of UniCredit Bank Austria.

 

Second pillar: Impact Financing for enterprises with a positive social impact

 

In Impact Financing, UniCredit Bank Austria offers social enterprises and organisations financing at favourable conditions. Secondly, support through financial training, exchange of experience and networking.

 

This is about solid and financially well-managed companies that can afford a loan and want to finance a social project with a loan. The focus is on companies that are active in the following areas:

  • Health and social care
  • Education and training
  • Social housing
  • Social tourism
  • Social agriculture
  • Protection and enhancement of cultural heritage
  • Enterprises in all sectors with the aim of integrating disadvantaged persons into the labour market

 

A first successful example of such impact financing is a new residential and workshop offer for young people with high support needs in Purkersdorf in Lower Austria. In addition to a shared flat for 30 people, day care places for 16 other people will be created here. UniCredit Bank Austria has granted the charitable association a subsidised long-term loan with which the investment costs of around EUR 3.8 million will be co-financed.

 

Third pillar: financial education and inclusion

 

The aim of activities in the area of financial education is to promote the financial competence of young people, young adults and company founders.

 

On the one hand, the focus is on financial education workshops, online platforms and competitions for students. On the other hand, young people (outside schools) and people at risk of social exclusion: By integrating financial education workshops into the continuing education offerings of social NGOs such as Caritas or SOS Children's Villages, the local carers and educators also benefit directly. The high demand from NGOs clearly shows that UniCredit Bank Austria occupies an important position here.

 

Fourth pillar: Volunteering by former or retired employees

 

Former or retired employees provide their time and knowledge as speakers and mentors. They build networks and raise awareness of social projects.

 

Many social projects would not be possible without the support of volunteers. In the current start-up phase of the "Social Impact Banking" initiative, former or retired employees of UniCredit Bank Austria are being persuaded to pass on their knowledge, support start-ups, impart financial knowledge to children and young people or help with the organisation of volunteer activities. The volunteers are insured against accidents as part of their voluntary work and receive an expense allowance for travel costs. They are coordinated and supported by a fixed team of active bank employees, who also provide advice on and conclude contracts for banking products if required.

 

Successful implementation of "Social Impact Banking" in Italy

 

In Italy, UniCredit launched Social Impact Banking in December 2017. So far the initiative has provided 2,103 microcredit loans amounting to a total of 41.5 million euros and 38 impact financing loans amounting to 42 million euros (as at end of June 2019). In addition, it launched the first social impact mini-bond in the country, issued by a social cooperate in the amount of 5 million euros. Furthermore, the "Start Up Your Life" programme, which is aimed at increasing financial literacy and fostering entrepreneurial spirit in schools in Italy, was recently awarded the Gold Medal for "Best Unique or Innovative Learning and Development Programme" by Brandon Hall — a leader in education research.