Big Society Capital establishes £30m fund for social lenders

The Community Investment Enterprise Facility, managed by Social Investment Scotland, will give out loans of up to £150,000 to community development finance institutions

Big Society Capital has today launched a £30m fund for social lenders in the UK.

The fund, known as the Community Investment Enterprise Facility, will be managed by Social Investment Scotland.

Community development finance institutions, which support small social businesses that find it hard to access mainstream finance, will be able to apply for loans from the fund.

The CDFIs will then issue loans of up to £150,000 to organisations in their areas that provide local social and community benefit.

The facility has already identified five CDFIs to invest in, although it has yet to reveal their names. Other CDFIs are now eligible to apply for funding. It is expected that the first awards to local social lenders will be made in May or June.

"This new facility, delivering capital at scale, is an important next step for the CDFI sector as a whole," said Alastair Davis, chief executive of Social Investment Scotland.

Davis said he hoped it would help "the sector attract greater attention and credibility with mainstream investors".

Rebecca McCartney, investment associate at Big Society Capital, said the CDFI sector "has even more potential to meet the need of small businesses in the communities they serve".

Big Society Capital has commissioned the Centre for Regional Economic and Social Research at Sheffield Hallam University to evaluate the facility to help create a more robust evidence base for CDFI lending.

Chris Dayson, principal research fellow at the centre, said: "An innovative feature of this project is the emphasis on robust data that is both accessible and transparent. An online data dashboard will provide up-to-date evidence about the progress and performance of the facility throughout its implementation."

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