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The Waterloo Banking Project
The Waterloo Banking Project is based at the University of Waterloo and Wilfrid Laurier University striving to offer sustainable financial services to students. It focuses on facilitating student success, and wants to help students graduate richer and with better financial skills.
Some months ago I got an email from a student asking whether I would be interested to get to know the Waterloo Banking Project. A group of Waterloo based students worked on a project to create a student bank that would help students acquire financial skills and manage their finances. In recent times, student debt and managing finances while studying has become an important issue because students are increasingly in debt.
I think this is a great example of domestic social finance that addresses the needs of an important part of the society. Providing better banking services, educating students about money, and helping them develop financial skills is really needed. Therefore, since then I have been in contact with the group and am trying to help them realize their ideas.
And it is not pure business. The Waterloo Banking Project tries to operate in-line with basic social banking principles. One thing that is unusual about them is that while they have a social mission and will generate revenue from their mission-based services, they restrict personal profit from all stakeholders but the members. The project is based on ideas like those of Friedrich Wilhelm Raiffeisen, the founder of Raiffeisen Banks, or Alphonse Desjardins in Quebec, the founder of Desjardins. Both wanted to create financial institutions that serve the underserved.
Another perspective is that the project is an example of students in their community helping themselves and each other with a problem they all face. Financing life while studying is not easy, and often help is needed. This grassroots movement is applicable to other campuses and other contexts as well, based very much on the concept of credit unions and cooperatives that do not have clients but members.
What I find fascinating is to broaden the community aspect and to integrate professors or staff at universities as well. Imagine, a student bank that offers savings accounts for faculty and staff and uses this capital to provide student loans.
Another great service could be a member assistant service where special funds are used to support students in financial need. Products and services like that could enable students to learn in a financially sustainable way.
In some ways the elements of the model are quite conventional given that co-operative financial institutions are common and student credit unions exist elsewhere, but there is no similar institution in Canada so far.
At present the project is looking for capital to be able to formally start a business. Negotiations with financial partners are on underway and plans to install banking machines on campus are on their way as well. Maybe the project idea will spread out over Canada and help more students manage their finances in a sustainable and social way. What a great application of social finance.
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Kate Martin Policy Analyst, Credit Union Central of CanadaKate Martin Policy Analyst, Credit Union Central of Canada
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