Growing the Economy Beyond 2016 | Blog | Foundation East

Growing the Economy Beyond 2016

1st March 2017 By Katy Ford in Current Affairs

Responsible Finance, the membership organisation to which social enterprises committed to providing access to fair finance belong, released its Annual Report last week. With so many reasons to feel proud, this blog explores why colleagues’ predominant collective emotion right now is frustration …

Have you read the Responsible Finance Annual Industry Report yet?

If not, here are the edited highlights.



Responsible Finance’s Top 10 Achievements in 2016:


  1. We lent £242 million to 47,500 financially excluded customers
  2. We lent £103 million to 9,600 small businesses that banks said ‘No’ to
  3. We supported the creation of 8,900 new businesses
  4. By lending to small businesses we created or saved 14,900 jobs
  5. We lent £116 million to 555 social enterprises, creating or saving 5,600 jobs
  6. We lent £20 million to 37,000 individuals who had been turned away by banks
  7. We helped customers deposit £3 million in savings accounts
  8. We proved that every £1 million lent to small businesses from a responsible finance provider creates 23 times more jobs than lending from the rest of the business lending market
  9. We safeguarded over 500 existing social enterprises
  10.  Our business loans contributed £0.43 billion to the economy.

Set against previous years, it paints a picture of a growing sector having a tangible impact on local economies and livelihoods. In fact, over the last ten years, the Responsible Finance Sector has:

  • Lent nearly £0.5 billion to 45,000 businesses
  • Helped to create 74,000 new jobs and save a further 35,000 jobs that were at risk
  • Lent £1.1 billion to 4,270 social enterprises
  • Lent £156 million to 255,000 people  and homeowners, helping consumers save £23 million in repayments to high cost lenders

There are so many reasons to feel proud, yet frustration is a far more accurate descriptor of the emotion myself and colleagues are experiencing right now. Why? Because of the Responsible Finance sector’s uncertain future…

So, what of Responsible Finance in 2017?


The changing context of the United Kingdom over the coming years means that the ongoing commitment to ensuring access to fair finance makes the Responsible Finance industry more important than ever. Yet, we are running out of reserves and our key source of finance, the Regional Growth Fund (RGF) ran out last year.

Through the RGF programme, Responsible Finance providers supported 2,000 businesses, creating and saving 7,800 jobs across England. This added an estimated £313 million to local economies across the country. With good value for money, the cost per job to the government was £3,800, only 10% of the average cost per job for the entire RGF programme.

And, in spite of the independent think tank Civitas, The Times and The Daily Mail calling for the government to close the funding gap for SMEs by continuing to use the Responsible Finance framework, there, as yet, has been no such move.

I shared 5 reasons why the government should create new RGFs in a previous blog. I also explained why I and colleagues within the Responsible Finance sector shared a sense of disbelief when last year’s Competition and Markets Authority (CMA) report on the UK retail banking market’s future failed to even recognise the plight of the thousands of excluded businesses we help each year, let alone serve them.

The case is made even clearer by Responsible Finance’s Annual Industry Report.

We will, as a sector, continue to develop new innovative products to tackle financial exclusion (about which more soon), close the SME funding gap and catalyse further economic growth. There is though, one simple thing the government could do and should do to deliver its promise of ‘an economy that works for everybody’, and that is to create a new RGF, or alternative source of funding for this proven and trusted fair finance framework.

If you, like us, are passionate about creating a fairer banking system where people with good business ideas who don’t tick the boxes of mainstream providers are able to gain support and loans, why not join our Mutual Society?
Know someone with a good business idea who has been turned away by the banks? Tell them to get in touch. If we can help, we will…




  • About the Author
    Katy Ford

    Katy Ford

    Katy’s knowledge of community finance is extensive, having worked for Foundation East since its inception in 2004. She is recognised locally as an influential business leader by the Suffolk 100 and nationally, as a founding member of AskIf, an online network of community-based lenders. Previous to moving across to community finance, Katy was the treasury manager for a large insurance company. She also has experience as a SME owner, having run a small hotel.

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