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Welcome to SCRT's January 2017 bulletin focusing on social finance; social investment and social banking.  SCRT aims to harness the collective financial reserves of the third sector community and use it to provide social investment that is relevant, appropriate and in tune with the needs of the sector. JOIN US...If you are interested in our work then why not join our 150+ members and take out SCRT free membership or associate membership. 

In 2013 the Scottish Government launched a Sustainable Responsible Banking Strategy for Scotland. Written in the aftermath of the 2008 banking crisis, the financial and economic crash and the consolidation of our financial infrastructure into 6 big banks, the strategy seeks to create a more diverse and sustainable banking system.  However, what the demise of Airdrie Savings Bank highlights is that the banking regulator 'one size fits all' approach makes it very difficult for newer, smaller and different types of financial institutions like social banks and credit unions to compete with the banks that triggered the crisis in the first place. This regulatory framework must change and must become more proportionate if a more sustainable financial infrastructure is to emerge.

Airdrie Savings Bank to close
It is sad to hear that ASB the last remaining independent savings and loans mutual in the UK is closing.  Opened in 1835, it has no shareholders, a voluntary board and a very equitable salary ratio between the lowest and highest paid. It was SCRT's banking partner and we were working together to produce financial products and services that aligned with the values of the third sector in Scotland. We will miss its presence and its support...Read SCRT Statement here.
ASB cites onerous regulatory obligations and the emergence of expensive online banking, as reasons why it is difficult for a small bank to compete.....Read ASB Statement here
Any 3rd sector organisation with an ASB loan could consider moving it to a social investment provider. You can find a list of Social Investment providers here

Scotland's Credit Unions are alive and well
Credit Unions are financial not for profit co-operatives that offer straightforward simple financial products and services. Scotland has the fourth highest level of credit union membership in Europe and is comprised of 100 credit unions providing accounts and loans to more than 387,000 people. Firmly rooted in their communities - either geographical, or communities of interest, Credit Unions invest in the 'real' economy where most of us live and work, a very different approach to the mainstream banks that caused the financial crisis. With the demise of the Airdrie Savings Bank, the spotlight has turned to Credit Unions as an alternative to mainstream banks for people looking for ethical and values based savings and loan products...Read More here

Follow Scotland's lead to boost social enterprise
On the back of the launch of Scotland's Social Enterprise Strategy 2016-2026, John Bird co-founder of The Big Issue, is already using it as a benchmark for developing the sector down south. In a recent House of Lords debate he cited the strategy as an example of how a long term approach can allow social enterprise to get to those parts of society that big business cannot reach.
The comments came on the back of Theresa May's 'Shared Society' speech which clearly involves engaging with teh Third Sector. According to Bird social enterprise was mentioned ten times during the Prime Minister's speech.  However the speech left many wondering what the term 'Shared Society' actually means...Read More here

What's so special about Social Investment?
Once again the failings of the social investment marketplace are very succinctly summarised in this recent article from BWB.  And once again it would appear that the issues haven't changed. The high cost of borrowing is still a concern, as is the length of time taken to secure a social investment and the overly rigorousness nature of the due diligence process. It would appear that the expectations between the needs of the investor and the needs of the investee are still unaligned, with investees prioritising social returns and investors prioritising financial returns.  
As these issues are not new and have been around for a number of years, it should be of concern to everyone interested in social investment that they do not appear to be getting addressed in any fundamental way...Read More

Five Core Principles of Successful Social Investment

Late last year a group of six organisations comprised of social enterprises that had secured investment and social investors, were brought together to establish a top five 'must have' tips. This group have now produced a list of factors that they have identified as essential to successfully securing social investment. Broadly these are
  • Evidencing a track record of effective delivery
  • Ensuring social impact is aligned with commercial success
  • The right people doing the right job
  •  A trusting relationship between the investee and the investor
  •  Allowing enough time to secure the right investment ...Read More
Copyright © 2017 Scottish Community Re-Investment Trust, All rights reserved.

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