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Report makes case for social investment


29 Sep 16

A new report looking at the scope for social investment in credit unions has been published.

Written by Social Finance in conjunction with Big Society Capital and ABCUL, Building the case for social investment in credit unions looks at the potential for social investment to help grow the credit union sector. The report explores the opportunity within the landscape for social investment, how credit unions can make themselves more appealing to social investors, and the wider benefits of investing in credit unions.

Drawing on interviews with a range of credit unions and social investors, the report arrives at three principle recommendations.

Firstly, that credit unions seeking investment need clear, ambitious and viable growth plans with a diverse membership demographic. Alongside this, clear social impact measures are needed to quantify and demonstrate the positive social impact credit unions undoubtedly have.

Secondly, investors should recognise the long-term sustainability challenges faced by some credit unions, their subsequent need for patient capital, and the key business areas in need of improvement (such as upgraded infrastructure, digital delivery channels, increased automation and improved local marketing strategies).

And thirdly, policy makers and regulators should look to improve the attractiveness of existing investment instruments. This could include increasing the flexibility and financial attractiveness of deferred shares, and the creation of a tax relief suitable for credit unions.

ABCUL Head of Policy and Communications Matt Bland said: “It feels like there’s an obvious fit between credit  unions and social investment, but part of the reasoning behind this research was to flesh out why this hasn’t really happened to date and to identify some of the actions that credit unions, social investors and policy makers might take to address any barriers.

“Credit unions have made a tremendous social impact across Britain, and with the sector doubling its membership and trebling its assets over the last decade, there’s a real opportunity for social investors to support credit unions as they strive to do even more for communities and workplaces all over the country.”

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