John Lovatt and Timothy Phillips write about the progress that has been made on the idea of a Quaker bank and some hopes and aspirations
You may be surprised to find we are forming a Quaker bank. We are the Quakers & Business Group (Q&B), a registered charity and a listed informal group within Britain Yearly Meeting. We’ve been working on the bank for two years.
We have a small group of five within Q&B, tasked with this project. We have two senior bankers on our team and three Friends. Until we are large enough to qualify as a bank, we have to register our company as a trust. Our Memorandum and Articles of Association are ready, subject to some fine adjustments, for submission to Companies House.
We are Quaker Finance Trust C.I.C, later to be called ‘Quaker Bank C.I.C.’. A C.I.C (Community Interest Company) is a new form of company designed for the benefit of the community rather than private owners. Q&B has agreed to fund the cost of formation of the company and to prime the bank account. We are keeping Paul Parker, the recording clerk, and BYM trustees informed of progress, and we shall be asking for their agreement for our use of the word ‘Quaker’.
Building the bank
To build up the bank, we shall start by doing ethical and commercial checks on a number of borrower enterprises that are, or will be, following our Testimonies in their daily business dealings, and offer viable business prospects and projects. We shall do similar ethics checks on investors, such as Quaker Area Meetings (AMs), who may wish to invest in these enterprises. We shall be inviting AMs and other investors to look through our list of suitable enterprises and decide whether they would like to place some or all of their funds in one or more of them.
There are, also, some managers of very large funds, and wealthy individuals, who are anxious to place their funds where they will do good, but do not have the time, or staff, to do ethical and commercial checks on the smaller and medium enterprises and social enterprises that have good prospects but are in need of investment. This investment gap is well known in the financial industry, and we intend to fill it. We have approved an overall budget of £300,000 over two years, employing two researchers and a project coordinator. We are currently raising £50,000 to enable us to start work, as we are advised that when we can show progress, we should be able to raise a further £250,000.
Banking as outreach
Naturally, we seek to change the world. We hope to encourage non-Quaker businesses and investors to behave in a more Quakerly way, by setting ethical saving and lending conditions. If you borrow from us, you sign up to treating your employees fairly, to paying your suppliers on time and to not exploit your customers. If you are an investor, we shall seek assurance that you haven’t made your money by devious means. If you want to borrow, but are not at our ethical standard just yet and promise to change, we shall lend to you with provisions. If you want to save or invest via us, and we find you have had some unsavoury practices that you promise to change, we will accept your investment – but will return it if you don’t change.
We shall not charge interest, and instead use the Sharia principle of sharing profits generated by our investment. If our borrowers fall short of their ethical commitments, we shall treat this as an increase in our bank risk, and our contracts will provide for an increase in our share of the borrower’s profits. We shall never force borrowers into bankruptcy. We shall take as security only the asset on which the money is borrowed, not any further security.
Area Meetings and Friends may not wish to become so personally involved with enterprises, or may wish only to put some of their funds into this more long term scheme. For short term funds we have, therefore, agreed with Triodos Bank – which shares our values in making money work to create positive social, cultural or environmental change in a very transparent way – that as soon as our company is formed we will open an account with them.
We appreciate that many Friends would like to have their own personal bank account with the Quaker bank. We will try our best to fulfil this hope in due course. To run a bank of this nature requires a lot of money and a huge amount of regulation. We shall start small but hope to grow to a size where we can offer banking to individuals. We will not lose sight of that goal as we are well aware of the interest and support for such an idea.
This will be a bank with a big difference. We shall give our profits to charity. We shall pay no bonuses. Power will be answerable to those it affects: the owners will be the communities we serve, including customers, employees, suppliers, local communities, the environment and, we hope, the Religious Society of Friends in Britain. Our bank will not exist to create private wealth only for its private owners.
We will run the bank in accordance with our Testimonies: for example, equality will mean that all staff, including the general manager, will behave decisively, but not imperiously, will seek unity as far as practicable and be transparent in their decision-making. Truth will mean we will be honest and will pay our suppliers on the nail.
We will ensure the whole pay range from top to bottom is set by one review body, is transparent and is felt fair by those involved. So, yes, a Quaker bank.
John and Timothy are elders of the Quakers & Business Group