ProjectsPast and current JFS projects


March 31, 2008


Local Money Enriches Regions

kimurasan.jpg Copyright JFS

Lecturer: Masaki Kimura, representative director of the community youth bank momo.

There are three areas where we deal with money in our daily lives: the purchase of goods or services; earnings from employment; through investments or savings. Approaches to create an ecological money flow in each of these areas are now being discussed. example, in the purchase of goods or services, there is a method called fair trade. employment, the popularity of eco-shushoku (ecological employment), which is a way of working to change the money flow towards a sustainable society, particularly with regard to the environment human rights, is growing. investments savings, it is possible to choose financial institutions based on Social Responsibility Investment or environmental-friendliness. Today, I would like to focus on savings in these three areas discuss the ways that money can enrich regions.

Traditional Money Flow

One quarter of Japanese people deposit money in major banks, 21% deposit money in postal savings, 18% deposit money in local banks; this accounts two-thirds of the Japanese population. One feature of such financial institutions, which other industry sectors usually do not have, is bank credit creation. Thanks to this feature, financial institutions are able to manage assets they have a greater social impact.

Where does the money that we deposit into financial institutions flow? When you look at the deposit-loan ratio, which shows the rate of loaned money depending on deposits by district, loaned money exceeding the amount of deposits happens only in Tokyo, in other area, loaned money falls below the amount of deposits. This indicates that money in the countryside is siphoned by Tokyo: local money does not flow in the region.

Deposits siphoned from the countryside are used, example, to finance large companies in Tokyo. They might be used as promotion nuclear power plants via large energy companies, or they might be related to structures that create major debtor via consumer finance companies. Good or bad, it is certain that this markedly affects the environment or society. That means that money has a far greater influence on reality than words. A disadvantage of typical saving deposits is that you cannot follow the flow of the money you put, there is no option depositors to specify how their money is used. This is the traditional money flow.

On the other h, there is a way you can control the flow of your money, example, providing it to companies conducting business that is not related to environmental disruption or the abuse of human rights, moving it to nearby regions or using it to address social problems. This is known as "eco-money saving." A nongovernmental organization, A SEED JAPAN, where I worked as an executive director, conducts a campaign to collect declarations reconsidering the financial institutions carrying out "eco-money saving." They have collected declarations from over 1,000 people between March 2005 December 2007, which accounts savings of over 702 million yen (about U.S.$6.69 million) . Because the NGO is located in Tokyo, most of the participants put their money in major banks bee the declarations; however, since making the declarations, they have changed to labor banks or credit unions, some have even changed to nonprofit organization (NPO) banks. As the NGO does not concretely recommend specific banking institutions this campaign, the campaign creates an opportunity depositors to think about the money flow.

What is an NPO Bank?

In October 2005, I established an NPO bank momo, which was the first NPO bank in the Tokai region it was based in Nagoya Prefecture, where I was born raised. An NPO bank is a finance system that collects money as investment from various sectors, such as citizens, NPOs, companies, it lends the money to social businesses, such as NPOs or community businesses. There are nine NPO banks in Japan, momo is located the far west. It will soon exp to Kumamoto Prefecture.

One of the features of NPO banks is the method of screening. finance loans at normal banks, historical permance is valued; however, in the case of NPO banks, the future of businesses, which is how the finance loan will affect businesses or regions, is valued in addition to historical permance. Members of screening are not only experts but also NPO activists residents of the regions, these nine NPO banks have lent about 1.6 to 1.7 billion yen (U.S.$ 15.2 to 16.2 million) in total to date. In addition, there have been almost no credit losses.

Another feature is that NPO banks try to build a relationship through which customers can see the borrowers. By actively disclosing inmation on the borrowers on the NPO banks' websites, it can be a PR activity the borrowers, the borrowers can be aware that customers are paying attention to them. Some NPO banks regularly call or visit offices to check business progress, or request support from related organizations if needed. However, as one of the NPO banks, AP Bank has borrowers all over Japan it is difficult to build such relationships, they ask borrowers to run a booth at outdoor events hosted by the bank.

Connect Thoughts between Investors Borrowers

Targets momo finance loans are Aichi, Gifu Mie Prefectures: they lend money, up to three million yen, to NPOs or businesses that work to solving local issues. Although they invite capital investors nationwide, about half of the investors are from Aichi Prefecture, others are investors who want to support hometown activities. example, some are from Nagoya City (Aichi Prefecture) but live in Tokyo, while others are from Gifu Prefecture but live in Nagoya City. We have received investments of 19.72 million yen from 178 people, as of February 2008.

One of our previous loan customers is an NPO that promoted green tourism by carrying on the traditional lifestyle in Gujo City, which is located in the center of Gifu Prefecture. Young people who frequently visited Gujo when they were students fell in love the area established the NPO, we decided to lend money to establish a base local revitalization employment young people in order to provide an area where a younger generation can settle in.

As many capital investors want to support agriculture, some investors decided to ask momo money. To provide money to people trying to grow fresh vegetables without agrichemicals or chemical fertilizer in Gifu Prefecture its surroundings, we decided to lend money to create an opportunity urban consumers to experience farming, to create a relationship that depends not only on money.

Thus, systems, businesses, finance are valued, as well as capital investors' opinions screening of loan customers. When I worked at a bank, I did not imagine depositors' faces; however, to m connections between investors areas through money is the aim of momo. Investors who sympathize with the activities of loan customers can offer to donate refundable interests, or give advice on business plans. To place a great deal of importance on such relationship, thorough inmation disclosure is needed. We theree issue news letters to the members in addition to the website, or organize "momo bar" or "momo cafe" events capital investors to interact.

Towards Creation of Sustainable Community

People might believe that the financial conditions of Aichi Prefecture are good because of the castle town of Toyota. However because resources of this area easily flow out as a result of developed road infrastructure, the area is not necessarily invigorated. People, goods money need to flow within an area revitalization. I expect that through the activities of momo, example, by showing sample cases that bring money back to rural areas remind residents of an era when communities money were always united, such as early tanomoshiko, in which individuals companies paid money to each other provided loans.

In order to revitalize such movements, it may be better to exp structures such as momo. What is required banking facilities is not a larger scale, but whether they have capacity to make areas vigorous. I would like to help community-based activities to encourage healthy lifestyles in this city where I was born raised.


Masaki Kimura is a representative director of the community youth bank momo. After graduating from college, he worked a bank, became executive director of A SEED JAPAN in 2003. He exped activities on the theme of nonprofit management, Social Responsibility Investment, Corporate Social Responsibility. In 2005, he established the community youth bank momo became its representative director. After moving to Nagoya City, he began working on the realization of local production local consumption of money by young people. In addition, he was a staff member of the management office of AP Bank in fiscal 2005.