Somewhat sceptical that it had, I asked them how. They said, ‘There aren’t just more providers, there are more products, and these are more varied — there’s more “blended finance” mixing grant, loan and support, and there seems a greater willingness to lend to smaller, younger social ventures.’
I was thinking about this and wondering to what degree it was true — and then my attention was drawn to this post by Big Issue Invest’s deputy chief exec Daniel Wilson-Dodd, reflecting on two years’ learning from his organisation’s Impact Loans England programme.
He focuses on eight key messages — and some of them will make you sit up and take notice. For example: social funders should be open to as wide a range of applicants as possible; those seeking finance experience social and cultural barriers; borrowers are customers.
The thing that struck me is that almost all of the messages are about why social funders should act and think differently — and how they can do this.
I found this fascinating because it suggests that the social finance sector is changing — and for the better. And this is a good thing, because it is a market that has been liberally supported in its development by public, philanthropic and government funding. And yet it hasn’t always seemed that this free money to help “develop the marketplace” has resulted in an inclusive approach to or a sympathetic understanding of the social sector these providers seek to do business with.
But one thing doesn’t seem to be changing — or at least, isn’t changing very quickly. The growth and proliferation of finance providers and products seems to be racing ahead of the social sector’s awareness and understanding of social finance — how it works, what it can do and what its providers want. The Good Finance website alone lists sixty-one social finance providers. It’s no wonder that the social sector’s awareness and understanding of social finance is generally poor — who on earth has got the time to navigate this rapidly expanding marketplace?
Perhaps it is no coincidence that this generally poor awareness of social finance coincides with probably the greatest contraction we have seen in recent years in the provision of specialist business support and advice for social enterprises and social ventures?
I can’t help but think that social finance ‘education’ should be fully integrated into the delivery of specialist business support for the social sector — and of course that more of this should be available and free-at-the-point-of-delivery.
Surely this, more than any other single measure, would help expand the constituency of enterprises able to make an informed assessment of whether repayable social finance is for them and can help offer a route to growth and expansion — to helping more people, to delivering greater impact, to creating more social value.