The Community Bank® Model

Between June 1993 and June 2000, some 2060 bank branches closed across Australia. Those closures represent a 29% reduction in branch numbers in seven years. Many communities were left without branch banking facilities.

Bendigo Bank received numerous requests to open branches in these towns and suburbs. We felt, however, that installing the same style branch as those which had closed carried a high risk of failure. We therefore devised Community Bank®, a new branch banking model which involves local people in solving their own banking needs. Community Bank® places a commercial framework around the co-operative spirit evident in many communities.

In our solution, the local communities own and operate a Community Bank® branch of Bendigo Bank. Through a local, publicly-owned company, they invest in the order of $700,000 to $900,000 to establish their own branch banking business. We provide all the banking infrastructure and support and the community company and Bendigo Bank share all branch revenue. Whatever is left over after the community company pays its branch running costs, it keeps as profit.

The operations are set up only after a business plan shows they can be profitable. The idea is for communities to pay their backers, or shareholders, a prudent return, then plough rest of profit back into local enterprise. (There are limitations both on share ownership and on dividends payable to shareholders.)

Community Bank® represents the first time most people have ever seen an opportunity to invest in the creation of a publicly-owned local enterprise. The enterprise created today just happens to focus on banking, yet the underlying philosophy behind Community Bank® can be employed to equal effect across a raft of community needs. Bendigo Bank is already involved in a community-based telecommunications solution - Community Telco - which draws on the same capacities to harness local demand and channel it into co-operatively spirited but commercially-based enterprise. Application of this model across a range of options will, we believe, provide communities with opportunities to capitalise on natural advantages they possess.

Banking benefits for the whole community

Community Bank® branches are making contributions to communities which go beyond simply banking. Contained in this PDF are some of their stories.

To download the Banking benefits for the whole community PDF booklet, simply click the PDF icon below.

Banking benefits for the whole community - Approx. 733Kb

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10 steps to open a Community Bank®

1. Contact Bendigo Bank for an information kit.
2. Form a local steering committee.
3. Raise enthusiasm, awareness. Begin raising pledges of financial support for start-up capital (Bendigo Bank will supply pledge forms, information forms and supporting campaign material).
4. Continue raising pledges until full community support can be shown from as many people as possible.
5. Hire independent consultant to conduct feasibility study. All residents asked to pledge banking support.
6. Feed aggregate results into Bendigo Bank's Community Bank® model to produce three-year business plan.
7. Have your community vote on whether to proceed.
8. If yes, release prospectus to invite share subscriptions in local company formed to operate branch.
9. Once share capital is raised, Bendigo fits out your branch and recruits staff.
10. Open branch.

This process generally takes at least 18 months, although communities have done it faster.