Social Finance Foundation to double community lending by 2029

Social Finance Foundation lent €25.5m to over 250 community groups across the country last year, and plans to nearly double community lending from €59m to €100m by 2029.

The non-profit body provides loan finance for community projects, with an average loan value of €101,000.

The funding is provided by retail banks AIB, Bank of Ireland and PTSB and the Council of Europe Development Bank, with additional support from the European Investment Fund.

With its motto 'Finance for Social Good', Social Finance Foundation is encouraging community & voluntary groups and social enterprises to apply for loans from €10,000 to €600,000 through the Foundation’s social finance lending partners – Clann Credo and Community Finance Ireland.

It says loans are available, with minimal processing time, to community and voluntary groups or social enterprises that create a social benefit for their community.

Last year's loan funding was allocated across seven sectors, with Community Sports and Health & Leisure receiving the majority of the funding.

Two community groups that have recently benefited from social finance loans are SPADE Enterprise Centre and Community Resource Network Ireland.

SPADE offers shared office and kitchen space, as well as networking and mentoring to a community of 50 early-stage businesses with a strong focus on the food sector.

SPADE CEO Bernie Everard said it directed its social finance loan to its SPADE Shared Kitchen initiative which is unique and will transform how young startup businesses produce their food and beverages.

"There is nowhere else like it in Dublin, and it will provide young entrepreneurs with a truly unrivalled base that is affordable and sustainable," he said.

"With the assistance of social finance, at SPADE they will have access to the highest quality facilities for very nominal charges."

CRNI’s Executive Director, Chris Mooney-Brown said its growth and business development is dependent on its capacity to innovate in the sector.

"Social finance is uniquely placed to provide valuable support for organisations such as CRNI to innovate and scale up its pilot projects," he said.

"For us means being able to amplify the collective efforts of our members in pursuit of Ireland's circular economy ambitions."

Since its inception in 2007, the not-for-profit Social Finance Foundation has benefitted from donated and low-cost funding from AIB, Bank of Ireland and PTSB, and previously KBC and Ulster Bank.

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This came in the form of an original €25m non-repayable grant, followed by €116m in two tranches of loan funding at preferential interest rates for the combined period 2009 to 2025.

A key feature of loans enabled by the Social Finance Foundation is the provision of bridging loans.

Community groups are often in receipt of grants which are only paid when the work is completed and hence the importance to have bridging finance for the development which is then repaid when the grant is received. Approximately one third of its loan book is comprised of bridging loans.

Social Finance Foundation CEO Garrett O’Donohoe said the money is available to lend on a flexible basis without unnecessary delay.

"Having access to finance, without personal recourse to trustees and volunteers, enables communities to generate a social dividend right from the start as people have a sense of belief and purpose in getting their project off the ground," he said.

"We are seeing a notable increase in applications from the environmental and bio-diversity sector which we are keen to grow as a percentage of our lending. Similarly, we also want to foster more social enterprises in communities."