Scottish Communities Finance (SCF) Ltd is a Community Benefit Society (BenCom) registered with the Financial Conduct Authority (FCA) under the Co-operative and Community Benefit Societies Act 2014, registration number 7649.
Scottish Communities Finance (SCF) Ltd was established to assist both communities of interest and geography across Scotland. As a Community Development Finance Institution (CDFI) our purpose is to assist communities to raise capital from within their community and create funds that can be used to address the needs of communities, thus making them more vibrant and resilient.
We are interested in creating a new form of ‘Citizen Investor’ or ‘Community Investor’. These are ordinary people who would not normally be investors but who want to invest a small amount of money to support their communities. SCF Ltd offers them the opportunity to fund activities in their community for the mutual benefit of all via the purchase of ‘Community Bonds’. Community investors are individuals and organisations interested primarily in a social return to their communities rather than a high financial return.
The Community Bonds investment periods and investment amounts vary depending on the different community bond offers. However, in all cases, the capital received and any interest due is payable upon maturity date.
Each community we engage with has a representative on the BenCom board, thus ensuring that we listen to and act upon the needs of our community partners.
Why We Do What We Do
Most communities across Scotland have not been well served by the mainstream financial providers over the last years. This has an impact on the viability and vibrancy of communities as providers of services and goods struggle to secure finance to continue operating or to develop further. This is particularly the case for most small organisations and businesses.
According to the Bank of England ‘Bankstats’, since 2011 banks have squeezed SME lending by 18% or £35billion. This is particularly the case for third sector organisations, social enterprises and community businesses who work in areas where there is either market failure or provide goods and services to small rural populations.
Research carried out in 2014, amongst the Third Sector in Scotland, found that most social and community enterprises struggle to find a social investment that was appropriate to their needs, in particular micro, unsecured and risk capital at an affordable cost. These findings have subsequently been consistently supported by other organisations undertaking similar social investment research in the intervening period.
Since 2011/2012, 90% of lending by Social Investors in the UK was in the form of secured loans with the result that social and community enterprises are increasingly in need of unsecured debt finance. Equally according to research carried out by BMG Research, in the same year 93% of social and community enterprises had sought investment of less than £100k.
The importance of lending on this scale cannot be understated. It not only addresses financial necessity, but also the needs of communities all across Scotland. Unfortunately, it would appear that most lenders are reluctant to take on the high costs associated with micro and unsecured lending.
Where the banks fail, another source of finance is needed and that is the people who are at the heart of communities. They can become ‘citizen investor’. Investing for a financial return but also a social return to their communities to the mutual benefit of all.
Kim Wallace has worked at Senscot since 2009 where she oversees Senscot’s work with the Social Enterprise Networks (SENs). Kim is also involved in the development of new initiatives for the Social Enterprise sector including most recently the Partnership for Procurement project. Kim has experience working for the public, private and third sector. The last 18 years have been spent working in the Third Sector on a number of roles and projects, areas of work include a range of employability projects, development work, European funded projects including EQUAL – Social Economy Scotland Project which attracted significant funds to social enterprise development and influenced the first social enterprise strategy in Scotland.
Eamonn has worked for Employers in Voluntary Housing (EVH) since 1997 and he represents the Community Housing sector in Scotland. His background is within the public and private hospitals both within the UK and overseas. He also served as a senior university official prior to joining EVH. Eamonn has also worked within the construction, entertainment and food distribution. Within EVH he leads the team and has overall responsibility for industrial relations and employer support across the membership. He performs a wide range of consultancy and training for members and countless others within Scotland’s social enterprise sector. Eamonn also serves as a Board member of Fair Deal, a Glasgow based organisation providing support to people with learning difficulties.
Rodney is a board member and a representative of the Scottish Community Re: Investment Trust (SCRT). He trained as an economist specialising in business finance and accountancy. In a career spanning more than 40 years, he worked on a wide variety of local economic development, community enterprise and corporate social responsibility projects in the UK, US and developing countries. Latterly he developed his own range of specialist software products. He founded or co-founded numerous new ventures including consultancy firms, social enterprises, a village development trust and a leadership training foundation. He is a founder member of Social Entrepreneur Network Scotland (Senscot) and has been its Treasurer since its inception in 1999. For 6 years he served as a trustee of UnLtd, the national funding body for social entrepreneurs. He represents the Social Enterprise sector in Scotland.
Pauline is the Secretary of SCF Ltd. She is the Director of the Scottish Community Re: Investment Trust (SCRT). Prior to that, she held various senior posts within the third sector as CEO of the Community Recycling Network Scotland (CRNS) and as CEO of at least two community based social enterprises. She is a founder member of the Scottish Social Investment Forum and is currently a CCF Grant Panel member and an ex panel member of the Social Investment Fund and the INCREASE Fund. Pauline worked for four years as a business consultant and Interim Manager with clients ranging from Scottish Government; Councils; Quangos and a wide range of social and community businesses across Scotland. Pauline has also worked in the Private Sector (Share Registrars) and in the Public Sector (Community Regeneration).
SCF Ltd was established in 2017 by the Scottish Community Re: Investment Trust (SCRT) which is a registered SCIO (Scottish Charitable Incorporated Organisation). Research carried out by SCRT in 2014 found that most small social and community enterprises struggle to find investment that is appropriate to their needs, in particular micro, unsecured and risk capital at an affordable cost. These research findings have subsequently been consistently supported by other bodies undertaking similar research in the intervening period.
The importance of lending on this scale cannot be understated. It not only addresses financial necessity but also assists the attractiveness and resilience of communities across the country by ensuring that products and services are available to people in those communities.
The SCRT concept of ‘Community Reinvestment’ encourages communities to pool their financial resources for the mutual benefit of their communities. It is about people acting mutually and supporting each other by allowing those people with money to invest some of it in a Community Bond which capitalises funds that can be used to meet the needs of those communities.
SCF Ltd is the vehicle by which Community Reinvestment can be achieved thereby addressing the financial needs of communities across Scotland where the inability to access capital is impacting upon the resilience of those communities.