Home -> About - Press Releases -> 22nd April 2009

Over €70 million in additional bank funding secured for social and community enterprise

• Community-based projects to benefit • Micro-enterprises to receive support The future funding requirements of the Social Finance Foundation have been secured by means of a new funding arrangement put in place by the country’s retail banks. This will see €72 million being provided over the coming years by the banks at a discounted rate of interest, enabling the Foundation to lend onward at competitive rates in support of social and community projects and micro-enterprises all over the country.

The Foundation has just signed a new, 12-year loan agreement with the country’s retail banks (listed below) which will meet its future funding requirements. The length of the funding agreement with the Banks is tailored to match the long-term lending by the Foundation, which is a feature of social finance. The key elements of this agreement are as follows:

• The country’s 12 leading retail banks will each lend funds to the Foundation at the start of each year to meet the demand for social finance - estimated to total €6 million per year
• The rate of interest charged by each of the banks will be below the European Central Bank (ECB) base rate.
• A total fund of €72 million will be created

The Foundation was established under the Government’s Social Finance Initiative in January 2007, having been announced in Budget 2006 by the then Minister for Finance, Brian Cowen. With seed capital of €25 million donated through the Irish Banking Federation (IBF) by the country’s banks, the Foundation provides loan funding for community and micro-finance projects that would otherwise find it difficult to obtain financial support from mainstream lenders. To date, loans totalling €13 million have been approved in support of a host of community-based projects all over the country – including community centres, crèche and sports facilities, sheltered housing and micro-enterprises.

In welcoming this new agreement the Taoiseach said:

“I commend the hard work and dedication of all those involved in making this agreement happen. When I, as Minister for Finance, launched the Foundation in 2007, I saw it as a catalyst for deeper participation by private finance in the area of local and community development and social enterprise. I am delighted that now the Foundation, in partnership with the banking sector, has secured a long-term sustainable funding stream. This agreement will provide the means for suitable social finance projects to go ahead and will benefit local communities. It represents a considerable support to locally-based enterprise and community endeavour for the years ahead”.

Commenting on this new loan agreement, the Foundation’s Chief Executive, Brendan Whelan, stated:

“This new funding arrangement is very welcome in providing certainty of funding to cater for the growing demand for social finance over the coming years. Coming on top of the original €25 million gifted by the banking sector on the establishment of the Social Finance Foundation, it represents a very valuable commitment of €97 million in total from the retail banks. Given our experience to date in supporting various social and community enterprise projects, I have no doubt but that this funding can and will be put to very good use.”

As with the original donation, the new loan arrangement was put in place under the auspices of the Irish Banking Federation, whose Chief Executive, Pat Farrell, stated:

“The good work of the Social Finance Foundation is already evident in the €13 million in loans approved over the last two years or so in support of very worthy community projects and micro-enterprises all over the country. The banking sector is particularly pleased to provide on-going support for this work, particularly as communities and micro-businesses face into more challenging times.”