The Social Finance Foundation has today announced €44m in additional low-cost funding from Irish banks, and €25m in Loan Guarantees from European Investment Fund
The Social Finance Foundation, an independent organisation established as a Government initiative in 2007 to provide loan funding to social organisations through its lending partners Clann Credo and Community Finance Ireland, has today announced two new Agreements. This will mean greater access to social finance loans for organisations in the social sector.
Under the first Agreement, the Irish banks (AIB/EBS, Bank of Ireland, Permanent tsb and Ulster Bank) will make available an additional €44 million in low cost funding to the Foundation over the period 2021 to 2025.
Under the second Agreement, the European Investment Fund has agreed to provide loan guarantees totalling €25m to support new lending by the Foundation. The €25m Loan Guarantee is being made available under the European Union’s Employment and Social Innovation programme, part of the Investment Plan for Europe.
These two agreements will not only enable the Foundation to continue to provide social finance to community groups and social enterprises but also to increase such funding to local communities and projects.
The bank funding is in addition to a €25 million gift originally provided to the Foundation by the Irish banks in 2007, as well as in addition to an existing €72m low cost loan facility made available by the banks during the period 2009 to 2020. All financial support from the banking sector has been facilitated through the auspices of Banking & Payments Federation Ireland (BPFI) – the sector’s representative body.
The European Investment Fund guarantee will cover 60% of any loan losses and the Foundation and its partners will take the remaining 40%. The guarantee covers loans up to a maximum of €500k and is valid for the first ten years of the life of the loan. Until now, some social finance loans could not be funded because of the risk involved. Now with the EIF guarantee agreement, the Foundation through its partners can offer social finance to a greater range of social sector organisations. This Guarantee Scheme is one of many examples of the EU’s commitment to the social economy under its Employment and Social Innovation (EaSI) programme.
Welcoming today’s announcement, acting Taoiseach, Leo Varadkar TD, said: “This announcement is good news for community groups, sports organisations, charities and social enterprises around the country. This finance is specifically targeted at projects that deliver a social benefit to their local communities.
“It is important in these challenging times that we do our utmost to help social organisations, as they seek to build better communities and help some of our most vulnerable people. I would like to acknowledge the ongoing commitment of Irish banks to this initiative, and the new loan guarantees provided by the European Investment Fund towards a range of social and community projects.”
SFF CEO, Brendan Whelan stated: “These two agreements will not only enable the Foundation to continue to provide social finance to community groups and social enterprises but also to increase such funding to local communities and projects.
“The Foundation is deeply grateful for the continuing support of the Irish banks, without which it could not operate. We also wish to acknowledge the commitment of the EU (through the EIF) to the social economy, whose importance has never been more evident than in these difficult days.”
Brian Hayes of Banking and Payments Federation Ireland stated: “Through the provision of low-cost finance to the Social Finance Foundation, our member banks are very pleased to indirectly finance a myriad of social and community projects that would otherwise find it difficult to qualify for mainstream funding.
“Now more than ever it’s critical that people are supported in rebuilding the fabric of their communities. Our banks are delighted to help deliver the projects that will greatly facilitate that rebuilding process.”
Andrew McDowell of European Investment Fund said: “The European Investment Bank Group is stepping up support for social investment at a time when the sector is facing unprecedented challenges and increased demand. Our first partnership with the Social Finance Foundation, in cooperation with Irish banks, will strengthen the long-term impact of social projects within vulnerable communities across Ireland in the months and years ahead.
“This innovative initiative demonstrates the real impact of the European Investment Bank and European Investment Fund engagement to improve lives and opportunities in Ireland.”