We are leading an innovative funding partnership to deliver responsible finance to small and microbusinesses unable to access mainstream finance. The programme matches £30m of Regional Growth Fund (RGF) money with £15m each from The Co-operative Bank and Unity Trust Bank. The programme is delivered on the ground by seventeen responsible finance providers spread across England who invest directly in small businesses in some of the most deprived and under-invested areas of the country.
Our programme is making a great impact by:
- Supporting thousands of regional jobs – Lending through our RGF programme has, to date, created 1,162 and secured 6,822 jobs across England.
- Delivering excellent value for money – The average cost per job to government is only £3,804. This compares to the national average for RGF projects of £37,400.
- Boosting the local economy – The £61m already invested in small businesses has generated at least an additional £322m for the economy
- Supporting the small businesses that others don’t – Since October 2012 we have helped 2,018 businesses.
- Reaching all English towns and cities – responsible finance providers are investing in businesses in all the English regions, using local knowledge and networks. The vast majority of jobs created and saved are outside of London and the South East.
- Creating long term impacts – Because our programme is based on lending rather than granting the money to businesses, the funds are recycled. This enables responsible finance providers to re-lend the money to other local businesses in future, creating long-term sustainable economic impacts.
Community Finance Partnerships (CFPs) span the boundaries between the public, private and voluntary and social enterprise sectors to use finance for social impact. CFPs are designed to bring community and economic benefits to an underserved area by providing, in one place and at one time, a full range of financial advice and support.
The CFP approach builds an integrated partnership of established and highly experienced local organisations already delivering community and financial support, savings and loans and small business advice. It creates a hub for support and innovation.
Through these partnerships we can support better financial management, greater confidence to manage finance, an appreciation of the help already on offer and greater capability for starting small or community enterprises.
We have piloted several community finance partnerships.
We piloted the CFP approach in three areas of London, with the support of City Bridge Trust, and under the leadership of our members Fair Finance and London Small Business Centre. A community catalyst worked with each partnership to build relationships, identify local needs, promote solutions and source finance.
We have also piloted the CFP approach in Bristol. A partnership of local trusted organisations has developed BOOST Finance – a weekly drop-in service at Barton Hill Settlement, offering advice to people in the Lawrence Hill area of Bristol. Advice is available on issues including alternative banking options, financial confidence, money advice, paying bills, business start up and personal and business loans. BOOST Finance has been funded by the Department for Communities and Local Government and its success is currently being evaluated by IVAR.
Community Finance Partnerships: Working together to build community finance provision in London
City Bridge Trust funded Responsible Finance to work with two responsible finance providers in London to consider how building local partnerships could help to tackle financial exclusion.
The pilot was led by Fair Finance and London Small Business Centre. NEF Consulting was commissioned by Responsible Finance to undertake a process and outcome evaluation of the learning activities of the pilot. This learning review focused on the sustainability, replicability, impact of the partnership model.