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.”

Business 10,900 loans 52m value Social ventures 206 loans £13m value Households 40,600 loans £23m value 26,000 saved from high-cost lenders Value of lending up 73% 15,950 jobs created / safeguarded 9,950 businesses created / safeguarded 40% more clients 197 social enterprises created / safeguarded 44% increase in lending Lending outcomes by market

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 INVESTOR(S) CDFA CDFI RESIDENTS FUND HA 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?