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Post Covid Demand Sees 29% Loan Growth to €27m

  • 265 community organisations from 26 counties averaged loans of €117,000 each
  • Loans from €10,000 to €500,000 now available through partners Clann Credo and Community Finance Ireland
  • Social Finance Foundation to nearly double community lending from €56m to €100m by 2029
  • Funding from the Irish banks has enabled the Foundation to lend over €190m to 1,870 organisations since 2007, through partners Clann Credo and Community Finance Ireland.

22 March 2023: The Social Finance Foundation, the non-profit body that provides loan finance for community organisations around Ireland, has reported a 29% increase in loans to the sector in 2022. The €26.6 million lent to 265 organisations from all 26 counties represented a post-Covid bounce as communities got back to regular activities after the pandemic. It plans to nearly double the social finance sector from €56 million currently to €100 million by 2029. The funding to date has been provided by the retail banks AIB, Bank of Ireland, Permanent tsb and Ulster Bank.
The Social Finance Foundation is advising community groups they can now apply for funding of up to €500,000 per group through the Foundation’s partners – Clann Credo and Community Finance Ireland. Applications are processed within a few weeks with personal interaction a key feature of the lending process. This results in a very high approval rate for loan applications.

The €26.6 million lent in 2022 was distributed across all four provinces, with a strong regional focus towards lending outside of Dublin. As a result, all of the other regions receive a higher allocation of funding relative to their population.

Region 2022 Loan Value % of 2022 Lending % of Population
Munster €11 million 41% 27%
Leinster (excl. Dublin) €8.5 million 32% 28%
Connacht €5 million 19% 11%
Ulster (3 counties) €1.3 million 5% 6%
Dublin €0.7 million 3% 28%

The loan funding is attributed to eight different sectors, with community and sports clubs making up a majority of the funding:

  • Community & Voluntary: €11.5m (43% of 2022 loans and 31% of overall loan book)
  • Sports: €10.1m (38% of 2022 loans and 41% of overall loan book)
  • Arts, Heritage & Tourism: €1,763m (7% of 2022 loans and 3% of overall loan book)
  • Social Enterprises: €1.3m (5% of 2022 loans and 7% of overall loan book)
  • Healthcare: €0.65m (2% of 2022 loans and 4% of overall loan book)
  • Religious: €0.56m (2% of 2022 loans and 6% of overall loan book)
  • Social Care Housing: €0.42m (2% of 2022 loans and 5% of overall loan book)
  • Education: €0.25m (1% of 2022 loans and 3% of overall loan book)

Since it’s inception in 2007, the not-for-profit Social Finance Foundation has been funded by AIB, Bank of Ireland, Permanent tsb and Ulster Bank, firstly by way of a €25m non-repayable grant, followed by €116m in two tranches of loan funding at low interest rates for the combined period 2009 to 2025. The bank funding has enabled the Foundation to lend over €190m to 1,870 organisations since 2007. This loan funding has enabled such social organisations to achieve their goals, delivering strong social benefits to their local communities.

In recent months the Foundation has received the first tranche of its €20m loan funding from the Council of Europe Development Bank. The Foundation also enjoys the support of the European Investment Fund through a €25m loan guarantee facility.

Community Groups

Two community groups that have recently benefited from social finance loans attended the Social Finance Foundation’s briefing – The Blue Teapot Theatre Company from Galway and the Betania Church from Tyrrelstown in Dublin.

Based in Galway, not for profit company Blue Teapot Theatre Company sourced social finance funding through the Social Finance Foundation’s lending partner – Clann Credo. Originally founded in 1996, Blue Teapot has evolved from a community arts project within the Brothers of Charity Services Galway to become an award-winning independent theatre company that supports an increasingly rich and diverse practice. It works to radically transform theatre practices by telling stories through the lens of disability, paving the way for inclusive practices to become the norm.

Commenting on how social finance made a difference to its operation, Blue Teapot Director, Petal Pilley, said: ‘’It has been a long-held aim to secure a permanent cultural home for Blue Teapot. Our vision is to be a centre of excellence for Disability Arts in the Western Region, this goal would not have been possible to achieve without the social finance provided through Clan Credo and facilitated by the Social Finance Foundation.’’

Based in Tyrrelstown in Dublin, the Betania Church sourced its social finance through the Social Finance Foundation’s lending partner – Community Finance Ireland. It is a church and community facility serving the Romanian Pentecostal community as well as believers from other nationalities who wish to participate. The €8 million project took four years to complete and can cater for 1,200 worshippers at any one time.

Senior Pastor & CEO of the Betania Church, Valerian Jurjea said: “For us, Community Finance Ireland, enabled by Social Finance Foundation, provided the missing piece of the puzzle. While the majority of the donations came from our members, it was the support received from Community Finance Ireland that allowed us to complete this magnificent project. Their positive answer was God’s open door for our prayers at that specific time and we are eternally grateful for this.”

Commenting on the strong growth in lending and the role played by The Social Finance Foundation, the Minister for Finance, Mr Michael McGrath TD, said: “Social Finance is an important part of our financial ecosystem. While the individual loans are not sizable in themselves, their social impact is multiple times more important than the money itself. The Social Finance Foundation, together with their lending partners, Clann Credo and Community Finance Ireland, ensure that communities in every county can dream of investing in their facilities and activities for the benefit of all the generations. I encourage community groups that might not be aware of social finance loans to reach out and consider it as a way of enhancing the lives of the people they serve.”

Commenting on the trends in the sector, Brendan Whelan (Chief Executive of Social Finance Foundation) said: “While 2022 was a bounce-back year post Covid, our long-term strategy with Clann Credo and Community Finance Ireland is to almost double our lending by 2029 to meet the needs of a growing and changing society. We will do this with the strong support of our funders – the retail banks (AIB, Bank of Ireland, Permanent TSB and Ulster Bank); the Council of Europe Development Bank and the European Investment Fund.”

He added: “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.”

Commenting on the announcement, Brian Hayes, Chief Executive, BPFI said: Today’s report from Social Finance Foundation is a testament to the work that takes place across the community and voluntary sector in Ireland and highlights the difference that investment, new lending and credit can make to the lives of thousands of people and communities right across Ireland. Through the provision of low-cost finance to SFF, our retail member banks, AIB, Bank of Ireland, permanent tsb and Ulster Bank, are very pleased to indirectly finance a myriad of social and community projects that would otherwise find it difficult to qualify for mainstream funding. In the wake of the Covid pandemic, which has been quickly followed by the current cost of living challenges, the relevance and value of SFF has never been more significant, and this is matched by a determination by the Irish banking sector to continue with our support having seen the success of the hundreds of projects that have been backed to date. We look forward to continuing our support of SFF along with their social lending partners Clann Credo and Community Finance Ireland.”

 Social Finance Foundation was established in 2007 by the Government of Ireland to address the needs of community organisations and social enterprises for loan funding where it is difficult to obtain from mainstream financial institutions. Acting as a ‘wholesaler’, it provides funding to its lending partners – Clann Credo and Community Finance Ireland. Its motto is – ‘Finance for Social Good’. Social Finance Foundation has provided over €190m in loan finance to community and voluntary groups since 2007. The Foundation’s loan balances outstanding in December 2022 were €56m.

A key feature of loans provided by the Social Finance Foundation is the provision of bridging loans.  Community group 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.