The UK has just announced a new £2 million fund created to back social organisations via peer to peer lending and crowdfunding platforms. The announcement did not mention specific platforms by name by disclosed platforms are being reviewed with an announcement coming which platforms have been selected later this year.
The new “P2P Impact Fund” is said to enable regulated social enterprises and charities to capture investment through the “thriving crowdfunding market”.
The statement from Whitehall noted that research indicates that access to finance is the single biggest barrier for social enterprise to grow and sustain operations. They state that the median amount of finance requested is just £58,000.
The fund hopes to encourage more people to get involved with the social investment market, which seeks social as well as financial returns and can benefit a whole range of organisations.
The Fund will administered by The Social Investment Business (SIB), one of the UK’s leading social investment organisations. The Social Investment Business has invested more than £340 million in 1,300 charities and social enterprises since 2002.
“The P2P Impact Fund is an interesting pilot fund and represents another positive addition to the social investment market. At the Social Investment Business we’re always trying to find innovative solutions to increasing the finance available to charities and social enterprises and we look forward to working with the Cabinet Office on a pilot fund that is aiming to do just that,” said Jonathan Jenkins, CEO, Social Investment Business.
The P2P Impact Fund will be run as a pilot program to enable social ventures to access alternative finance platforms by providing funds that can be drawn upon in the event of default. This aims to build evidence about people using alternative finance platforms to lend money to charities and social enterprise.