Your credit union members, whether they have personal or business accounts with you, are becoming more interested in sustainability. Part of customer service today includes offering products and services that better the local community, and the environment.
There are several trends in the financial sector right now, but two of the biggest include financial inclusion and a focus on sustainable banking and loan practices. Let’s talk about the importance of green financing and sustainable loans.
The Basics of Sustainable Loans
Sustainable loans offer low rates and flexible terms and are intended to help individuals and businesses finance projects that increase the energy efficiency and sustainability of a home, business, or another project.
These loans are part of many green financing initiatives that are gaining popularity in the banking industry.
Green financing and sustainable loans can be used to create funds for projects as big as full-scale corporate climate change initiatives or as small as personal projects to install energy-efficient appliances or equipment for your home
Here are some common projects that often qualify for sustainable loans:
- Purchase of electric vehicles, charging stations, batteries, and similar products
- Solar and wind energy technologies (wind turbines, solar panels, etc.)
- Advanced agricultural projects with goals of water purification, ocean cleanup, desalination, irrigation alternatives
- Green home renovations including the purchase of energy-efficient appliances, electric and hybrid vehicles, updated insulation, and other equipment that aids in the reduction of personal energy consumption
- Improved landscaping
- Energy-efficient door, windows, roofing
Sustainable Loans – Evaluation & Proceeds
The proceeds of a sustainable loan must go to a green or sustainable project. And not only that, but the borrower and lender can also work together to determine the objectives of the loan, the management of the proceeds, and the reporting of results.
For example, if a business is looking to switch their company cars out for electric vehicles, the sustainable loan goals should be to meet certain sustainability objectives.
The proceeds of this loan should also not be mixed in any way with other non-green proceeds. And finally, borrowers should generate and organize data with the most recent findings that speak to the use of these proceeds.
Touting Your Sustainable Services
There are also several ways your credit union can become certified in green financing practices, sustainable loans, and more.
If you want your credit union’s sustainable loan program to flourish, you have to market it to the right people.
Listing your loan types out on your website is great for informational purposes, but it doesn’t draw people or businesses to your new green financing programs.
You can spread the word in a lot of innovative and captivating ways. Partner with local green businesses like solar panel providers, green appliance warehouses, or electric vehicle sellers. Offer information about their products and services, and then include your sustainable loan information along with it.
Celebrate eco-friendly holidays like Arbor Day or Earth Day by offering lower rates on sustainable loans or holding special refinancing events.
The inclusion of sustainable loans is just the first in a long list of effective green financing initiatives you can start building at your credit union. Environmental and social concerns continue to be differentiating factors for members and potential members.
Consumers across industries are looking for businesses that are transparent in their practices and dedicated in their commitments to communities in the local area and around the world. It’s time to start positioning your credit union as a forward-thinking, sustainable brand.
Sustainable Loans Help Your Bank Go Green
Green initiatives have been gaining momentum for decades. The effects of climate change have become more apparent, and banking members have started to put pressure on financial institutions and other businesses to prove they are part of the solution and not the problem.
Sustainable loans, mobile banking, online self-service forms, eStatements, and more digital-friendly options are now becoming a standard, rather than a valuable addition to your credit union offerings.
Offering sustainable loans is a small way your credit union can show its commitment to more green financing practices. And it’s much easier than switching all your branches over to solar power.
As we’ve seen with the great digital transformations spurred by the pandemic, the time to create momentum for future green and eco-friendly practices is now. And it’s much easier to do one initiative at a time than it is to try and “catch up” to other financial institutions’ sustainable practices and eco-friendly building certifications.
Sustainable Loan Applications Made Easy
IMSI’s web loan applications create greater efficiency in your credit union’s lending program. It is quick and convenient for borrowers and allows your staff to focus on member requests that need more of a personal or one-to-one discussion.
Whether you want to start a new green lending initiative at your branch, or just increase your lending capabilities to more members, IMSI has web loan and other applications that integrate seamlessly with your Keystone Core.
Check out our website for more information, or request a consultation today.