The Social Finance Foundation represents a unique collaboration between the Government and the Irish Banking Industry. No other country has addressed social finance on a national scale and put it on a sound financial footing, capable of meeting the needs of the social sector in a very cost effective way.

In July 2006, the Government approved the implementation of the Social Finance Initiative. It established a not-for-profit company (limited by guarantee and having no share capital) to act as a wholesale supplier of finance for the social sector. Social finance is, inter alia, about the availability of loan finance at affordable interest rates to community based projects and social enterprises. These projects, which generate a social benefit, often experience difficulties in accessing loans from mainstream lending institutions.

In January 2007, the Social Finance Foundation was established. Seed capital of €25m was generously provided by the Banking Industry through the Irish Banking Federation. The Banking Industry provided further funding support to the Foundation in 2009, through a twelve year €72m Loan Agreement at a discounted rate of interest.

As the wholesale funder, the Foundation works through Social Lending Organisations (SLOs), which interface with the borrowers. Some SLOs, such as Clann Credo, have been operating for many years and were pioneers of social finance in Ireland.

Since inception in 2007, the Foundation has approved over €80m of loans.

In 2012, the Foundation was given responsibility for the administration of a Government funded Microfinance Loan Fund to promote job creation by supporting new and existing micro-enterprises. Microfinance Ireland was established as a subsidiary of the Foundation to discharge this responsibility. The Banking Industry again has been very supportive of the initiative. AIB, Bank of Ireland and Ulster Bank have agreed a €15m loan facility at a competitive interest rate to fund MFI lending over the next five years.