Solidarity Finance and the SDGs: Scale, Subsidies and Sustainability

All microfinance institutions claim a double bottom line, but only financial cooperatives and NGOs are at the same time also solidarity finance institutions. This makes it possible to compare both sets of institutions with regard to their innovations in the framework of the Sustainable Development Goals (SDGs). This paper reviews cases of financial products and services geared towards three SDGs: education, renewable energy and housing (4, 7 and 11). The paper finds that overall there are so far only few such innovations. They are initiated by both solidarity finance institutions and incorporated micro finance institutions (microfinance banks and non-bank financial intermediaries). So far, these initiatives do not appear to be scale efficient, a condition for financial sustainability. This continued subsidy dependence can be attributed largely to training and other technical assistance that accompany the core financial product. Despite the inherent constraints to up-scaling public policy should encourage experiments by solidarity and other microfinance institutions. Their lessons are relevant for public and private sustainable investments for the SDGs.