10 years of Responsible Finance
£1.6 billion has been lent by responsible finance providers over the past 10 years according to our new report published today.
The responsible finance market has experienced a rapid rise over the last ten years, with £1.6bn of loans supporting over 50,000 businesses and social enterprises. Our report also reveals that responsible finance has helped to create, and save, over 100,000 jobs across the UK.
Yet the industry could do much more in the future. Launching the report, 10 Years of Responsible Finance, at our annual conference today, chief executive Ben Hughes said:
“Over the last 10 years the responsible finance has injected £300 million into SMEs, and helped 200,000 people avoid predatory payday lenders. Without this lifeline, over 100,000 jobs would not exist, and hundreds of thousands of people would have been trapped with huge repayments, totalling £20 million, to high cost lenders.
“The responsible finance sector plays a crucial role in supporting Britain’s businesses yet we cannot stand still. Devolution provides a real opportunity to strengthen local economies and a key part of that is getting affordable finance to the people and businesses that need it.”
The report calls for the reform of guarantee schemes to increase investment into the responsible finance industry.
It highlights the need for local integration – Ben says that “every local authority and LEP should be working closely with their responsible finance provider as the delivery mechanism for reaching underserved populations of people, businesses, and social enterprises, thus creating inclusive local economies,” and for responsible finance providers themselves to harness new technology as ‘FinTech’ changes how people and businesses access, use, and manage their finances.
Mike Cherry of the Federation of Small Businesses says:
“Access to finance can be a real challenge for small firms. Responsible finance providers are able to take the time to understand the needs of a small business and provide fair and affordable finance to those with ambitions to grow.”
Andrew Robinson MBE of CCLA says:
“The UK banking system works okay for most of us, but not all. This is unacceptable. Over a decade of innovation and experimentation by responsible finance providers has shown just how much more might be done to address unnecessary market failure and enable human flourishing. It is an open question as to what the government and the banks are going to do over the next decade.”
Emma Jones MBE, Founder and Chief Executive of Enterprise Nation says:
“Responsible finance providers have clearly been an essential source of finance for businesses over the last 10 years. Businesses need access to affordable finance from providers who understand them.”
James Wharton MP, Under-Secretary of State DCLG: Northern Powerhouse says:
“Our local responsible finance provider [Five Lamps] has been at the heart of our community for many years now and has adapted and grown throughout that time, whilst always sticking true to its underlying aims. I know it makes a huge difference in Thornaby and more widely and their work is highly valued by all those who engage with what is a top class organisation.”
The research highlights that if the responsible finance industry continues growing at the same pace, then lending could reach £6 billion and support 1.4 million businesses and people in the next ten years.
Download a copy of the report here.
