Investing in Communities

1
Investing in Communities
2
Role of Chair

• Competence
• Knowledge
• Flattery
• Credit Union Assets (10 Billion)

3
Current context of Social Finance

• Whinge v Opportunity
• Whinge Reality
• Frustration
• Experience
• Powerlessness

4
Reality

• 300,000 children in relative poverty
• 70,000 children in consistent poverty
• 50,000 Households on waiting lists
• 4.5 Unemployed
• Access to medical card 14,500 gt

5
Reality

• Poverty largely effects people living in
  disadvantaged communities and older people
• Early School leaving
• Prison residents
• Poor health / die younger
• Social finance is not the answer
• Exchequer funding is through taxation and
  redistribution policies

6
The elimination of poverty is through

• Income adequacy
• Access to social infrastructures
• Education
• Housing
• Health
• Training
• Employment

7
Defining Social Finance

• The provision of finance by organisations which
  seek a social return or social dividend, as well
  as a financial return
• Generalist social finance providers (Government)
• Specialist social finance providers
• Prioritise social gain, facilitate access to
  capital by those excluded from mainstream finance
  and are usually located in the third sector

8
Social Finance Provision

• Significant activity in Ireland
• Generalist Providers
• - Taxation / Incentive
• - Infrastructure support
• - Micro finance providers (CEB)
• - Public Private Partnership

9
Irish Governments have had a strong role in
social finance through state sponsored investments

• Section 23
• Holiday Homes
• BES
• Stallions
• IDA Grants
• PPPs
• Social Housing
• Tax credits (pensions, health insurance, SSIAs)

10
Good Infrastructure to assist delivery of Social
Finance and Community development goals

• Partnership and Leader companies
• Enterprise and Development Boards
• Clar / Rapid
• Community Employment Schemes
• Local Economy Schemes
• The focus of these is to enable development

11
Communities are experiencing a blockage in their
developments

• Reduction in Community Employment Schemes
• Continuance and sustainability issues with Social
  Economy Schemes
• Financial service providers pulling out of rural
  and disadvantaged communities
• High cost of credit to low income people
• Greater risk of those without collateral

12
Social Finance presents an opportunity

• It enables individuals / communities take control
  of their lives
• It adds value and facilitates a move from a
  situation of dependency

13
Social Finance Provision

• Significant activity in Ireland
• (B) Specialist Providers
• Credit unions
• Mutual guarantee schemes
• Social investment funds
• Clann Credo
• Western Development Commission
• Social Banks
• Triodos Bank
• Mainstream financial providers

14
Specialist Social finance providers

• Are more flexible than mainstream / state finance
  provision
• Are on the increase throughout the EU
• Meet needs of groups excluded from mainstream
  provision
• Local knowledge and delivery
• 55 provide services to social enterprises
• Expectation of growth in demand from Social
  Enterprises

15
Credit Unions

• Over 600 in Ireland (535 ILCU)
• 2.6 million members
• 10 Billion assets
• Not for profit
• Dividend
• Interest rebate
• Social and Economic objectives

16
Credit Unions are already investing in their
members and their communities

• Community development projects
• Community facilities low interest loans
• Business development loans

17
Key issue is Risk Management

• Credit Unions know their members (history, track
  record)
• Social Finance requires more than personal
  knowledge
• Business plan (expertise)
• Guarantees
• Legal structure
• Grant approval
• Commitment of funding (White paper)

18
Opportunity is there once the supports are in
place

• Clarity about the current infrastructure /
  process (no need to reinvent)
• Clarity about exchequer funding (grants etc)
• Pilot an initiative in one / two areas
• The Dormant funds as a guarantee

19
Social Finance

• Social finance wont solve poverty in Ireland
  but can be an effective tool to enable
  individuals and communities reach their
  potential. This in turn will create a natural
  infrastructure to stop the development of poverty