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Community Finance Partnership John Coburn, HACT Jackie Milton, Robert Owen CBF 30 April 2014 Community Housing Cymru event Who? • CDFIs – social lenders, going where banks don’t • Mission driven • Help deprived communities by “offering loans and support at an affordable rate to people who cannot access credit elsewhere.” Lending outcomes by market Households 40,600 loans £23m value Business 10,900 loans 52m value Social ventures 206 loans £13m value Value of lending up 73% 26,000 saved from high-cost lenders 40% more clients 9,950 businesses created / safeguarded 15,950 jobs created / safeguarded 197 social enterprises created / safeguarded 44% increase in lending Proposal Overview • Community Finance Partnership based approach • HAs and CDFIs pool resources • Residents or local communities access support and finance to start up in business • Typical Tenant~ start up needing up to £5,000 Headline Deliverables • A sustainable micro loan fund to support residents into self employment • A Community Finance Partnership led by HAs and CDFIs • Shared best practice and learning through an Action Learning Pilot • Evaluated social, economic and financial impacts • A scalable and viable long term funding model Aims of the Programme • To attract 10 HA’s or HA consortia investing min £50,000 loan capital each plus revenue costs • To create a minimum Loan Fund of £150,000 for each HA or consortia • To generate total investment of at least £1.5m • To run the pilot for up to 18 months • Launch the first funds in June Funding Structure Shared Investment Housing Association Third Party Investment Total Fund £50,000 £100,000 £150,000 Programme Structure HA INVESTOR(S) CDFA CDFI RESIDENTS FUND RESIDENT BENEFICIARY CDFI FUNDS Key Roles • CDFA provide Scheme Fund Management • CDFI provide Loan Fund Management and match funding • Housing Associations provide match funding, access to market, local partnerships & programmes • HACT manage & support programme through Action Learning Pilot Client Support • Clients will also receive substantial pre and post loan support • Pre Loan support to develop and prepare their business plan • Support throughout the loan application process • Up to 15 hours post loan mentoring support • Access to further support such as: – Training and workshops – Peer to peer support – Helpdesk support What are the loan terms? • Affordable: – 6% fixed – No fees – No early repayment charges • Typically – £1,000 – £5,000 – 1 to 5 years Programme Update • Kicking off in the North of England • 8 across the North East & West • Then Wales, South West, Midlands & London • Exploring Cooperatives and or BME focused pilots Programme Update • May: – Finalise remaining partnerships – Complete Contracts – Get partnerships underway • June: - Official launch at HouseParty event • July: - First action-learning session Questions • Are you interested? • Is there potential for a consortia approach in Wales?