Social Economy

"Social economy" exists in almost every sector. It can be found in fully competitive markets as well as providing goods and services in areas where both private and public sector provision has failed. Definitions of social economy vary, but in general an organisation in the social economy will operate on the principle of providing social and/or environmental benefit. Any profit made by these organisations will be ploughed back into the organisation or into the community.

Organisations operating in the social economy have a number of common characteristics:

• Their primary purpose is not to secure a return on capital
• They are usually managed on a "one member one vote" principle
• They encourage self-help
• They address the needs of those involved and those who are disadvantaged
• They are flexible and innovative

There is a wide variety of organisations operating in the social economy covering fields such as banking, insurance and mortgages through to crafts, agriculture, sports, welfare services and environmental regeneration.

Co-operatives

Co-operatives are organisations owned and operated by their members. Co-operatives are open to all persons able to use the services provided who are willing to accept the responsibilities of membership. Each member has one vote and decisions are made democratically and profits are retained by the co-operative to assist in its development. Co-operatives have traditionally been and continue to be community based, serving the specific needs of a community providing goods, services, employment and training whilst maintaining clearly defined principles in regard to ecological and social justice issues.

There are two main types of co-operative. The workers co-op provides goods and services as well as employment opportunities and training. Housing co-ops provide housing for their members by purchasing or leasing property which is then rented out to members. For many people in insecure housing this provides a valuable opportunity to obtain decent secure homes.

Credit Unions

Credit unions are financial co-operatives owned and controlled by their members. They offer savings and great value loans plus they are local, ethical and know what their members want. Many credit unions now offer a range of services including a current account, benefits direct, ISAs and Child Trust Funds. 

Credit Unions, serving around 200,000 members continue to grow, providing secure, affordable financial services to members of the community who are excluded from mainstream banking facilities and who are often forced to use high cost finance services, including loan sharks. In the UK, Credit Union assets amount to around £110,000,000.