Citizen Loan

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The citizens credit (also citizens loans) provides an alternative form of financing for local authorities or public utility companies , which fall as an alternative to conventional municipal loans or municipal bonds can be used. As part of a citizen loan project, the required external capital for investment or cash loans is taken out directly from private individuals .

history

In July 2009, during a public consultation on the budget situation in the city ​​of Quickborn , the idea of a citizen loan was born. Cornelia Dommel from Quickborn, a business IT specialist, presented the idea at this public hour. The city took out a one-year loan directly from citizens without going through a bank .

The deposited amounts of the citizens were with 3% p. a. interest-bearing. The minimum investment amount for a single system was 5,000 euros. At the time, this was around 1% cheaper than a comparable municipal loan . A total of 4 million euros were collected from 80 private individuals .

However, since the collection of “absolutely repayable funds from the public” constitutes the act of conducting deposit business according to Section 1 (1) Sentence 2 No. 1 KWG , the Federal Financial Supervisory Authority (BaFin) intervened and, in cooperation with the municipal legal supervisory authority, prohibited this Business. In order to be allowed to conduct deposit business, a so-called banking license is required in Germany , which local authorities cannot obtain per se. However, BaFin decided that contracts that had already been concluded should remain valid and did not have to be reversed.

In order to still be able to take out citizen loans, the Quickborn city tour decided on a new project to cooperate with a Willich bank. In the second attempt, the city collected around 1.065 million euros from 30 investors. Interest was paid at 1.5% for a one-year loan and 2.6% for a five-year loan.

The money raised was used to renovate both a school and the local fire station .

Opinions

From the point of view of the municipality, a citizen loan can be a cheaper alternative to conventional borrowing from a commercial bank . Also bearer bonds make as a funding source because of the elaborate emission and legal advice much more expensive than citizens loans.

In addition, the dependency on banks is reduced and possible credit lines do not have to be fully exhausted. Under certain circumstances, the use of a citizen loan can promote the participation of citizens in the municipality and identification with it in the long term. "The citizen loan helps to bundle political responsibility for financially stressful decisions at a decentralized level."

Since the insolvency of municipalities is excluded under German insolvency law and the vertical financial equalization ensures the liquidity of the municipalities, municipalities are considered first-class debtors . The competencies of the municipal supervisory authorities also ensure the solvency of German regional authorities. This makes investing in a citizen loan safer than making a deposit in a credit institution.

"The advantage, as paradoxical as it may sound, is that the conflicts of municipal debt are brought directly to the municipal council and the citizens' assembly."

literature

Web links

Individual evidence

  1. ↑ [1]  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / www.kommunale-info.de  
  2. ↑ Information sheet - information on the facts of the deposit business on the BaFin homepage ( memo of January 24, 2011 in the Internet Archive )
  3. ↑ BaFin prohibits Quickborn Citizen Credit on the derneuekaemmerer.de/ website ( Memento from November 27, 2009 in the Internet Archive )
  4. ↑ Residents give their city loans - Quickborn Citizen Loan as a model? , shz.de of April 12, 2010
  5. ↑ http://sueddeutsche.de/geld/kommune-in-finanznot-quick-win-in-quickborn-modellbuergerkredit-1.168404
  6. ↑ DÖV, issue 5, March 2011, Dr. Prehn, p. 184
  7. ↑ http://www.newsclick.de/index.jsp/menuid/2163/artid/13403893
  8. ↑ a b The creative Kommunalkredit website ZBW - Leibniz Information Center for Economics. Retrieved June 30, 2012.
  9. ↑ https://recht.nrw.de/lmi/owa/pl_text_angebote?v_id=2320021205103438063#det236230
  10. ↑ Article 28, Paragraph 2, Sentence 3 of the Basic Law
  11. ↑ Article 107, Paragraph 2, Sentence 1 of the Basic Law
  12. ↑ BT-Drs. 15/5095 of March 15, 2005