Community Finance Ireland: Empowering communities to empower themselves
Born out of a need to provide an alternative source of capital to the voluntary sector in the face of reduced grants, Community Finance Ireland (CFI) strives to “empower communities to empower themselves”, through the medium of social finance, on terms and conditions appropriate to volunteer leadership teams, writes Group CEO Dónal Traynor.
With over 24 years’ experience of lending for impact, and deploying over £95 million in supports, we provide exclusive access to credit for charities, communities, clubs, and social enterprises. As the only social finance provider to operate across the island of Ireland, our ambition has always been to lend in a sustainable and client focused way.
We have put about £95 million on the ground over the last 24 years and we have lost less than 1 per cent to bad debt. That gives a sense of how our social finance business model works but also how resilient our clients can be.
In fact, we pride ourselves on making sure that CFI does not just have clients, but relationships and these relationships pay off over time – a prime example of this was our approach to clients during Covid-19 where we adopted a flexible approach to help roll with the unforeseen punches that the sector faced during that time.
Partnerships and collaboration
This flexibility and adaptability means we are always also seeking to source affordable and cost-effective capital that can support the ongoing viability of term and bridging loans that are appealing to our clients and offer us the chance to onward lend.
This approach has seen us work with a number of partnerships in the pursuit of social finance that supports the sustainability of our clients and their projects.
Our most recent partnership has been with the Department for Communities (DfC) and the announcement in early 2024 that a £13 million Financial Transactions Capital (FTC) loan fund is now available for community led projects in Northern Ireland. This FTC instrument comprises a cost effective 15-year repayable loan from DfC to CFI. Of note, this is not just the first time FTC has been used in Northern Ireland for this community lending purpose, in of itself an innovation, but as importantly, it is the largest ever single injection of capital into the social finance eco-system here, ever.
For us in CFI, it is a major vote of confidence by the Department, in what it is we stand for and how we deliver our service. Our all-island certification for both ISO 9001 underpins our commitment in that regard.
The first client to avail of this fast, fair, and flexible FTC credit line was the high-profile Crusaders Football Club who are now well positioned to grow their membership and ensure the players of tomorrow have the best facilities and opportunities, today.
Social impact
Opportunities and facilities are born out of our ability to not only manage a loan book but also understand the wider impact of social finance across the island of Ireland.
In 2023 alone, CFI approved £15 million in social finance supports to hundreds of communities across the island.
However, the real impact emanates from the £11.3 million which was deployed to voluntary groups across those 12 months.
An independent social value analysis is commissioned annually by CFI and undertaken by Rose Regeneration on our behalf, using the internationally recognised Social Value Engine platform. In 2023, this report comprised not just our provision of social finance to communities, but also support we provided to SMEs via the Invest Northern Ireland sponsored, Northern Ireland Small Business Loan Fund (NISBLF), which CFI have managed since 2013, in a successful collaboration involving Enterprise Northern Ireland.
The multiplier effect of our support as a society, and after various deflators have been considered, has been verified at £3.69 in terms of social value per £1 invested in our communities, representing a substantial return.
The report helped identify our ‘so what?’ with our support helping to build a more sustainable community with the following outputs listed among borrower feedback:
- increased development employment opportunities and skills levels;
- improved access to community facilities and services;
- increase in entrepreneurship and business support/expansion;
- improved community health; and
- improved wellbeing through arts, culture and sport, and vocational training.
That our community lending may then be recycled, affords Community Finance Ireland the ability to exponentially increase such social returns, on the same funds into the future.
Leaning into wider knowledge and thinking
Our ethos has always been to try to punch above our weight and to lead the social finance sector for the betterment of everyone. We are currently the only UK and Irish member of FEBEA – the European Federation of Ethical and Alternative Banks and Financiers – an umbrella group of 33 financial institutions from 15 European countries which develop and promote ethical finance principles.
This membership and my recent appointment to their board has offered us the opportunity to host its annual conference in Croke Park, Dublin for the first time in September 2024. CFI is delighted to be able to share and learn from that wider community on how we can continue to support the not-for-profit sector and the vital work it, its board members and volunteers do for their communities every day.
T: 00353 87 252 1038
E: donaltraynor@communityfinanceireland.com
W: www.communityfinanceireland.com
