- Can you tell us how Community Finance Ireland began?
A reduction in grants being made available to community enterprise projects in Northern Ireland and the southern Border Counties subsequent to the Peace Process, sparked a need to develop an alternative source of capital finance to the existing banking infrastructure, which for various reasons was not wholly compatible with the borrowing needs of the Community & Voluntary sector.
- How has the company grown into what it is today?
In 2001, we took over a bad debt portfolio from a philanthropic group worth £6.5m GBP, and managed it to the point that only a nominal amount remains outstanding today. In 2004, we were tasked with disbursing a further £4m GBP of Rural Development funding by way of community loans into Northern Ireland. Over the last 20 years, we have been recycling this £10.5m to make some £38m in lending available to the CVSE sector.
In 2004 we accessed SEUPB funding to develop the island’s first cross border business support programme, weaning group’s away from grant dependency, and helping them map a path towards sustainability.
On the back of this exercise, we developed a profile in the South and commenced a lending portfolio in the Republic from 2008. At this time also we became accredited as a Social Lending Organisation with the Social Finance Foundation in Dublin, and in doing so accessing some €100m in capital being acquired from the Irish banks (at a rate of interest) for onward lending to the CVSE sector. We have since disbursed over €36m in lending across every county in the Republic through our southern registered business.
- How does Community Finance Ireland stand out from your competitors?
From a borrower’s perspective:
In Northern Ireland, we are the only indigenous provider of Social Finance, and would possess the greatest wealth of experience in facilitating a market which spans, charities, social enterprises, co-ops, clubs, communities, and faith based groups to name a few.
In the Republic, we do not charge arrangement fees, which can sometimes amount to at least 1% of the loan being borrowed. Our bridging loans are capped at 6.25% (as of Feb 2022), which would rank them as being the lowest available on a national basis. Indeed our terms loans, also capped at 6.25% (as of Feb 2022) are deemed competitive with potential discounts applying depending on the terms of the loan.
Generally then we are the only social finance group operating across the entire island, and an appropriate support to those within the CVSE also with an all-island remit.
We don’t seek personal guarantees
We accept fundraising as a viable form of repayment capacity
CFI is structured as an Registered Society, this allowing our borrowers (should they wish to) become a shareholder in the Group.
Most of the lending we do is unsecured, this reducing the need for legal processes, and attendant costs.
Our slick online application form (via www.communityfinanceireland.com ) allows every type of applicant across the island submit details within 10 mins, and get a response with 48 hours. On deals up to €200k (or sterling equivalent), a formal decision is likely to be reached within 7 working days of all the relevant information being submitted)
We are currently collaborating with both Rethink Ireland and DCU to introduce new social finance instruments into Ireland, a project due to complete in Dec 2023.
From an Investor’s perspective:
Our default rate over the last 21 years of lending is running at 0.79% (as at Feb 2022).
We have an overarching reach across many sectors, and continuously seek to innovate and stretch the boundaries of our portfolio in a calculated manner. Our investments have included a Community Owned Hospital, Cafés, Hotel, Off-Licence, Leading tourist activity sites, innovative churches, as well as workspace and a vast array of sporting disciplines from sailing to rock climbing, Rugby to GAA, and harness racing to basketball, to name but a few.
From a funder’s perspective:
Our ability to pivot our operation in a swift and agile manner has been emphasised once again of late. In 2020, we successfully administered some £9m in grant funding on behalf of Department for Communities (DfC) in Northern Ireland to Social Enterprises. In 2021, for the same funder we administered north of £7m to Charities, as part of a Covid Recovery Grant Scheme. In 2022, we are engaged in managing a £5m Charity grant fund for DfC, with larger grant fund projects scheduled towards the middle of the year).
CFI also manage the Northern Ireland Small Business Loan Fund on behalf of Invest NI (since 2013), a similar product offering to that operated by Microfinance Ireland in the Republic, making finance available to private SMEs who have difficulty gaining support from a bank.
- What are some of your favourite case studies from the business you’ve funded?
Teach Na Daoine, Monaghan. Seized the opportunity to purchase a shop and off licence, running it as a community enterprise and creating 17 new jobs.
IRD Kiltimagh, Mayo. Beset with unsustainable debt, a purpose built enterprise space lay idle and vacant for years. We managed to assist in restructuring the finance to a point where it now operates at close to capacity, comprising over 80 jobs at the space.
Thirdspace Café, Dublin. The first café to open in what was a derelict part of Smithfield Square Dublin. Supported by a crowdfunding and subsequently Community Finnce, the unit converts in to a community space in the evening for a raft of activities for the local residents. Thera re now no less than 16 eateries in the area, with Third space still commanding a loyal following.
Armagh Ladies GFC. Despite being part of the fastest growing sport for women in Ireland, no ladies’ club had up until now, sought out and acquired their own grounds. A major success after years of hard work. We hope they will inspire other counties to follow suit.
- If someone reading this runs a social enterprise, and is interested in getting a loan, what should they do?
Visit www.communityfinanceireland.com, and have a look at our case studies, complete an enquiry form, and we will be back in touch promptly. Also follow us on twitter / Facebook – @ComfinanceIrl
- You’ve a highly successful podcast. Do you have any favourite episodes you could recommend? How do you go about choosing which guests get to be on the podcast?
The podcasts were the brainchild of our Head of Marketing & Communications, Lita Notte, who interviews on each of the sessions. Those participating are chosen due to their being warm to the idea of letting this platform further promote their story by way of inspiration to others across the island.
- What other marketing have you done? What has been the most effective in our opinion?
The footage directed by Lita Notte on our client videos has been of a very high standard, with for example our Finn Vally AC short being viewed over 7k times.
However nothing beats the grassroots business development and relationship work carried out by our Client Relationship Managers, so reaching out to all sorts of communities and engaging on a face to face basis is top of the priority list.
- How did the pandemic affect your services?
Working from home, the entire team were able to continue to provide the same level of service, albeit the face to face meetings, switched over to virtual platforms.
Ironically, the pandemic helped expose some latent talent within our team, in relation to our ability to effectively manage grant funds, that otherwise might never have been uncovered.
- How have you grown your team in recent years? Do you have any plans to grow your team in the future?
Yes, we grew the team from 13 in Nov 2020, to 18, adding Client Relationship Managers, Compliance, Admin and Marketing personnel. I would expect this to grow further in the next year yes.
- Are there any other companies (not clients) in the diversity and inclusion sector in Ireland that you are a fan of?