Community Finance Partnership John Coburn HACT Jackie Milton

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 £ 23 m value Business 10, 900 loans 52 m value Social ventures 206 loans £ 13 m 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. 5 m • 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 RESIDENT S FUND CDFI FUNDS RESIDENT BENEFICIARY

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 House. Party event • July: - First action-learning session

Questions • Are you interested? • Is there potential for a consortia approach in Wales?