Calling Political Parties Everywhere!
With the General Election in sight, Responsible Finance has launched its own manifesto calling on all political parties to support the responsible finance sector in order to create a more inclusive financial services system and catalyse growth and prosperity across the UK. Katy explains more …
What does the responsible finance industry do?
The responsible finance industry empowers people to take control of their financial futures. We promote prosperity and address inequality. We help people start businesses and create good jobs. We enable families on low incomes to save. We contribute to strong and diverse industries and an inclusive and resilient economy.
“We contribute to strong and diverse industries and an inclusive resilient economy…”
What has the responsible finance industry achieved?
Over the last 10 years responsible finance providers have been responsible for up to 5% of the UK’s annual total jobs growth.
- Lent a total of £1.6 billion to 55,000 businesses and social enterprises that mainstream banks refused to fund
- Enabled these businesses to create 68,000 new jobs
- Helped these businesses to protect a further 41,000 at risk jobs
The responsible finance model is proven to generate £7 in economic value for every £1 lent.
“For every £1 we lend, we generate £7 in economic value …”
Why has the responsible finance model been so successful at delivering economic impact?
The responsible finance model opens access to opportunity to all by providing local support and market knowledge, alongside finance.
We’ve been so successful at delivering economic impact because we have a strong local presence across the regions and we access the knowledge of local people with a very real understanding of their local business environment to make decisions about who to loan to.
These people make these decisions based on the strength of applicants’ business plans, not on their failure to meet a list of prescribed conditions.
Successful applicants are matched with local loans managers who provide mentoring and support throughout the duration of the loan.
“We provide more than just loans. We provide specialised local business support …”
Take a look at the success stories of some of the businesses this responsible finance company has supported across the East of England.
Why is the responsible finance sector more relevant than ever in 2017?
This direct extract from the manifesto answers this question well:
“Nearly 10 years on from the financial crisis, responsible finance providers are more critical than ever in supporting local economic growth and financial resilience.
“The UK is still feeling the effects of banks withdrawing investment and physical presence from large parts of the market, and trust in the system remains at a low.
“Our financial services system underpins the economy, so a flawed system prevents businesses from starting up and growing, and households from accessing credit and other banking services to effectively manage their money.
“This has real implications for economic growth, especially in those communities that face long-term underinvestment and deprivation.”
What does the responsible finance industry want from the next Government?
We want a financial services system that allows everyone access to the services and products they need for economic inclusion and prosperity.
We want the next Government to support responsible finance providers focused on serving ‘underserved’ markets, through providing resources and incentives to encourage investment, appropriate regulation and the replacement of EU funding and facilities.
We want the next Government to plan for the financial services of the post-Brexit future and to deliver a system that is competitive, diverse, inclusive and that underpins a fairer society.
To achieve this we are asking all political parties to pledge the following commitments.
1. Launch a Responsible Finance Fund
A Responsible Finance Fund is needed to properly address under-capitalisation of the responsible finance sector that is a significant constraint on growth. A fund of £150 million would unlock significant private sector investment and scale the sector’s impact on excluded and underserved communities.
Read the full manifesto to find out how the United States’ Government invests $200 million annually into its equivalent fund and previously financially excluded individuals and businesses benefit.
2. Ensure Tax Reliefs and Guarantees are fit for purpose
Tax reliefs and guarantee schemes are tools widely utilised by the responsible finance industry to leverage commercial investment, thus increasing our impact on underserved communities. These tools need to be kept competitive to maximise social and economic return.
Read the full manifesto to find out five steps we’ve identified as priorities.
3. Maintain or replace access to EU funding and facilities
If access to EU facilities that incentivise commercial investment into the responsible finance sector cannot be maintained (namely EaSI, COSME and ERDF) they must be replaced.
4. Ensure proportionate and appropriate regulation
The Financial Conduct Authority (FCA) regulates the responsible finance industry. FCA rules, however, are designed for large scale financial institutions and hamper the type of diversity in the system that would lead to greater access. They also require increased regulatory and reporting procedures from small firms, like responsible finance providers.
We want proportionate and fit-for-purpose regulation that better enables fair small providers to grow and innovate.
You can read the full Responsible Finance Manifesto here. We encourage you to share it by all means possible, and, when you answer your door to your local political candidates, ask them what their party intends to do to create a financial services infrastructure that is fit for purpose and enables fair opportunity for all …