UK social investment market grows to £202m
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The UK social investment market has grown according to a new report that tracked intermedaries to 2012.
The Growing the Social Investment Market: The Landscape and Economic Impact report finds that while the market is worth £202m, the demand for social finance is much greater.
The report identified 29 Social Investment and Finance Intermediaries (SIFIs) as actively investing, but they reported only meeting around half of expressed demand by social ventures, illustrating a significant funding gap in access. Estimates for demand for social finance have been put at £2bn to as much as £6bn.
The report calls for improved access to finance, particularly to unsecured lending to meet that demand.
The report was commissioned by City of London, Big Lottery Fund, Big Society Capital and government and details the progress and milestones of the developing social investment market in the UK. It found that over the lifetime of their finance period, 765 social investments resulted in the creation or safeguarding of 340 UK social ventures and 6,870 UK full time equivelant jobs.
Mark Boleat, policy chairman at the City of London Corporation said: "The continued growth of the UK social investment market is vital to supporting over 180,000 social enterprises across the country that contribute around £55bn to the economy. The tax relief announced by the Chancellor in the Budget was a welcome step in the right direction and we now need to build on this by encouraging more private investment in the sector.”
The report also identified that there was a skew towards social finance coverage in the English regions as well as the devolved administrations, leading to an uneven geographical spread in access.
Measured purely for economic impact (and not social impact), a social investment of just over £1m achieves 100 net national FTE jobs. A three year social investment of £11m would generate almost £1.9m net additional Gross Value Added in the national economy over the period.
Minister for Civil Society, Nick Hurd commented on the reports findings: "Social investment is an idea whose time has come. A quiet revolution that Britain is leading to transform the funding environment for charities and social enterprises. It is early days but these figures show an uplift in both willing investors and new projects ready to take on funding. By measuring the size of the market, and the effect it is having on real people’s lives, we can build an evidence base to attract even more funding and social entrepreneurs.”
The Big Lottery Fund has long particpated in the social investment market and its England chair Nat Sloane said: " As a continuation of its commitment to social investment, the Big Lottery Fund will be launching two further funds this summer, which will work to help catalyse the social investment market in a way that supports the voluntary, community and social enterprise sector to deliver investment to support people and communities most in need.”
The full report can be read here.