Charities and social enterprises still managed to secure significant funding last year in spite of the economic downturn. New figures show that at a time when many banks are reluctant to lend to the Third Sector the ethical bank, Triodos, stepped up its lending.
Triodos, which finances only charities and businesses delivering social, environmental or cultural benefits, arranged loans worth more than 20 million pounds to the Third Sector in when many mainstream financial institutions regarded them as too high risk in difficult economic times. It has also seen a rise in the number of applications for loans so far this year.
Sue Cooper, the leader of Triodos Bank’s social banking team, said: “This is not an easy time for the third sector and social enterprises. Corporate and individual donations are dropping and many banks are simply taking a blanket view that the sector is too financially fragile to lend to. Triodos doesn’t hold that view, we know that this is the most important time to support the sector.”
She said the increase in loan applications was a promising sign for the sector and showed entrepreneurs and organisations were taking the opportunity to borrow money and to grow. “Despite the recession, it is vital that charities and social enterprises still look for these growth opportunities. If they don’t, they might be creating problems in the longer term,” she added.
Organisations that borrowed from Triodos included the Birmingham-based charity Freshwinds, which provides complementary health care to people with life limiting illnesses and to those from disadvantaged backgrounds. Its founder, Mohammed S. Al-Rahim, said, “t is vital that banks keep lending to organisations like us. We couldn’t have fulfilled our growth potential and continued to support our local community, without this funding.”