[permaculture] Green investments
vlawrence at nets.com
Tue Oct 18 14:45:55 EDT 2005
Back in Mid June,
Lawrence F. London, Jr. wrote:
> Can anyone describe what opportunities exist in the realm of Green
> investments and what role the Permaculture Credit Union is playing in
> that arena?
It is a great question and it has taken a while to put together a reply.
For those of you who haven't become members of the PCU, here is the lead
article I wrote for the most recent member newsletter
A few months ago, Larry London asked, “Can anyone describe what
opportunities exist in the realm of “Green” investments and what role
the Permaculture Credit Union (PCU) is playing in that arena?”
First and foremost, we are a credit union and that is dissimilar from
any normal form of “green” investment. Beginning with the premise that
ecologically aware and enlightened people want their resources to
support growth and healing of the planet rather than exploitation and
destruction of Earth’s ecosystems, we provide loans and financial
services for people and projects that are consistent with the ethics of
permaculture – “Care of the Earth, Care for people, Recycling surplus/no
waste”. We are chartered to operate by these ethics and we are chartered
specifically to serve a membership that can subscribe to these values.
We are a non-profit institution (501-c-14) that returns our “profit” to
the membership as dividends and interest payments to depositors and
reduced rates to borrowers on loans for “earth-friendly” projects and
products. We exist as a financial institution to serve the permaculture
community and our values, policies, and “assets” are generated by that
same community. We were formed so as to pool the financial resources of
this community and make them available to serve the needs of members as
well as to help generate an economic model that expresses the shared
values of permaculture .
Unlike banks and investment funds that are owned, controlled and funded
by private capital investment, we are owned and democratically
controlled by our members, and our operations are audited, regulated,
and reviewed by the NCUA and NMFID who provide us with the charter to
operate and insurance on our members’ accounts up to $100,000. Very few,
if any, “ green investments” are so regulated, governed, or insured. For
all of these reasons, we are unique in the field. Our assets come from
the community and are returned to serve and benefit the community.
The funds we have used to finance the start-up phase of the PCU have
been raised as donations from private individuals and non-profit
foundations. These funds amount to over $200,000 that have been raised
over a period of seven years and demonstrate the degree to which each of
our donors, both large and small, have shared the vision of people
regaining control over how their financial resources are used in the
world and the purposes to which they are applied.
What shade of “Green”?
All of this is admirable as rhetoric, but the most important proof is in
the numbers and what the money in the PCU is actually doing. So, lets do
the numbers as of July 2005.
Since the inception of our loan programs in 2001, the PCU has made 252
loans representing over $3.6 million in funds. Of this total, 101 loans
(or 40%) have qualified for the sustainability discount. The dollar
amount of these loans is $2.39 million or 65.4% of actual monies loaned.
A “snapshot” of the current loan portfolio taken in July of this year
reveals some even more startling figures. The portfolio of 142 loans,
representing $2.037 million, has 74 loans (52%) that qualified for the
sustainability discount. These loans total almost $1.68 million or over
82% of the actual dollars that are currently loaned out to members. Of
this amount, almost $1.2 million is allocated to 28 mortgages. 27 of
which (97.5%) are for sustainable dwellings and projects that range from
water catchment and energy efficiency improvements to strawbale houses,
yurts, off-grid electricity generation and solar systems.
Other loans that are somewhat unique include three loans for biodiesel
vehicle conversions, three for greenhouse construction, two for
permaculture landscaping, and seven for various types of other
ecological home improvements.
There are 62 auto loans in the current portfolio of which 37 (60%)
qualified for a fuel-efficiency discount. The actual dollar value of
these loans, $472,750, is over 70% of the monies loaned for and secured
Surplus (non-loaned) cash represents 31 % of the total assets of the
PCU. These funds are placed in short-term accounts and CD’s with other
credit unions. 21% of these funds are placed in local credit unions, 34%
is placed with other progressive, ethical, “socially conscious” credit
unions and banks, and the remainder is in a “corporate” credit union
(similar to a clearing house) to cover and facilitate funds transfers,
interstate loan financing, and ACH transactions.
Perhaps the most amazing factor in our operation is that while we have
loaned out a total of over $3.6 million in four years, our default rate
(the percentage of loans that are not paid back or are chronically
delinquent) is an astoundingly low 0.18%. In real terms, this reflects
the fact that no borrower of PCU funds has failed to pay back their loan
and only one person out of the 252 who have borrowed money has been
delinquent for over 12 months. When compared to the national average of
2.56% (a fourteenfold difference), this clearly demonstrates the
integrity of our field of membership and the extraordinary commitment we
all have to creating an ethical permaculture economy.
Several final thoughts....
The delinquency rate figures also reflect the commitment of the PCU to
the second PC ethic - respect for people- we work with members who have
difficulty with their loan schedule to make it work for them. We have
not yet had to write off a single loan.
We are currently at a "break-even" point for our current operations.
However, there is so much more we want to do and we certainly can use
donations from individuals and foundation sources to continue to grow
and develop. Contributions can be sent to PAL c/o Permaculture Credit
Union, P.O. Box 29300, Santa Fe, NM, 87507-9300. We also have a
toll-free phone # 1-866-954-3479 and a website @ www.pcuonline.org
More information about the permaculture