| "The Wealth of Nations" Session A2 Country report: The Netherlands |
RESPONSIBLE CREDIT
WHY?
Lots of research actually shows us that financial problems lead to social problems. Obvious classical themes such as social exclusion, easy access to the criminal scene and so on are often discussed. Being aware of the social ramifications that a problematic financial situation can have is important, but it is not always the only source of problems though an important one.
IS IT A GOVERNMENTAL TASK?
Where the government sees the social wellness as a governmental task, responsible credit and debt solving can be a governmental task when the market does not take on its responsibility.
HOW TO ORGANISE?
Organising it from above (at the national government level) instead of giving a structure for realising a solution is a political discussion. Two main solution systems can be determined: Primarily by organising extreme financing by law, which can be done by restrictive lending, maximisation interest rates and so on; secondarily by facilitating an organisation for solving problems of indebtedness, organising insolvency structures. It can be discussed whether one out of two will be able to prevent problems such as social exclusion as mend or a combination is preferred.
DUTCH APPROACH
The Dutch approach can be seen as a combination of both worlds. In three stages it can be made clear:
1. Consumer law’s are protecting clients for predatory lending and high interest rates. For example not consumer interest rate is allowed go over 12%+euribor a year. Advertising should be “honest”.
2. Banking law’s do restrict the types of company’s dealing with money. There should be a certain quality/ethic? level being a “bank”.
3. A local organised structure of municipal banks are strongly embedded in the world of financing and debt solving.
In the first part the NVVK as national committee does has made a rather strong political statement of influencing the national government for realising relevant laws. Although there are “just” 70 members of the NVVK they are a main player for information to the government.
Recently realised issues are:
- National registration of debts (€ 250 and up).
- National registration of debt solving clients. Lenders can check the financial “health” and then decide weather or if additional lending is given.
- Debt solving activities (done by NVVK members) is free of taxes.
National legislation implements restriction on lending and brokerage. A relevant control factor herein is the Dutch national bank. Local municipalities can support their inhabitants with a social bank and debt solving agency. The members of the NVVK are owned by the municipalities and each is serving one to fifty of them. So a national coverage is (nearly) realised.
EFFECTS AND RESULTS
www.volkskredietbank.nl
www.volkskrediet.nl
B DUTCH METHOD
In a nutshell:
- Intake; analysing the problem. Solving the most critical. Giving advice for follow up.
- Balancing income. Controlling the income of the client by the bank.
- Bank card. Restricted for use and controllable (no debts allowed).
- Training and support, about how to deal with money. Courses for group and individuals.
- Debt solving, solving debts by an arrangement between clients and debtors of solving it by refinancing.
- Responsible credit. Small loans at low interest rates from mortgage to financing a washing machine.
HOW TO ORGANISE
Started from a municipal bank, the debtsolving and balancing income is added as financial instruments.
- Governmental -> support is needed
- Structure of banks -> should be created
- System of debt solving -> integrated with the banking structure
HOW IS IT FINANCED
Partly by the municipality and partly by the interest of the loans.
IS IT APPLICABLE IN OTHER COUNTRIES?
Political willing is necessary. Legislation should be created. The structure can be copied.
SPEAKER DETAILS:
CURRICULUM
Mr. Harro Norder is director of the Volkskredietbank in Holland. The company does serve a region of 200.000 inhabitants with 45 employees. In a technical way the Volkskredietbank is very sophisticated and is been seen as the “primus inter pares” in Holland. The company does have realised a iso 9001-2000 certification with a cum laude notation.
ACTIVITIES
- member of the advice board Nibud www.nibud.nl
- member of the advice board Progresz www.progresz.nl
- board member NVVK www.volkskrediet.nl
- Director volkskredietbank www.vkb.nl
- President hdb insurance www.hdbassen.nl
- Partner of sociale banken Nederland www.sbn.nl
EDUCATION
During several jobs as a business consultant additional educations were realised. Two different bachelor degrees in economics are realised and a degree for teaching economics. Recently a Masters degree (executive MBA) is realised at the Hanze university of Groningen and the Utah state university in Salt lake city
SOCIAL SETTING
Mr Norder is married and has 5 (4+1) children.
ORGANISATION
The kind of the organisation is as called an “gemeenschappelijke regeling (GR)”. In a certain way it can be compared with a limited (Ltd). The owners of this GR are several local municipalities. They are responsible for profit and losses of the organisation. The director is responsible to the board of mayors and has to look for the daily activities and has to advise the members of the board about the strategy of the organisation in the future.
B HISTORICAL CONTEXT
In the early 20th’s the economic situation was very bad. Churches and later the local government’s were concerned about the people and the way of going around with money. The “lommert” ore “pandjeshuis” were established. Looking around for the inhabitants the local governments of some municipalities created “social banks” for particular reasons man could come to this bank when the financial perspectives were not outstanding. At this moment there are about fourty banks in Holland working in this specific market having their roots in the early 20th’s.
In the late 90th’s “schuldhulpverlening” was more been seen as a company goal and the organised municipalities redefined their strategy.
The defined products are:
- Intake / front office.
- Balancing income (Budgetbeheer).
- Solvin debts (Schuldregeling).
- Giving loans (Kredietverstrekking).
C MEMBERS OF THE COMPANY
Looking to the map, it will be clear which municipalities are members of the company (GR).
D SCOPE
The scope of the company is; correcting the financial misbalance in families and solving debts when there are financial problems, giving social loans there, were in normal situation no loan can be given by commercial banks. But do it in an economic sufficient way. |
| ID: |
37242 |
| Author(s): |
iff |
| Publication date: |
28/04/06 |
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Created: 20/04/06. Last changed: 20/04/06.
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