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Improving Access to Finance For All

Back in the early 2000s, before I joined Social Investment Scotland (SIS) I spent time working in the community banking team of a large high street bank. That team managed a number of relationships with alternative finance providers across a range of sectors (including SIS itself!) and in particular, social enterprises that provided credit to individuals and households excluded from the mainstream. I recall one of the first funding proposals I was asked to assess was from a CDFI (Community Development Finance Institution) providing small loans to households in England.

Fast forward more than 20 years and at SIS, alongside a range of other social investors like Big Issue Invest, providing finance to support the scale up of affordable credit provision has been very much a part of what we do. Our recent investment with Fair For You is a great example of this in practice.

It also takes me back to 2018 when SIS were appointed by the Carnegie UK Trust as managers of their Affordable Credit Loan Fund, providing £1m of capital, later matched with £1m from the Scottish Government, to support growth and scale against a background of ever-increasing need. For many years Carnegie have played a valuable convening role in bringing together key agents and thought leaders in the financial inclusion space.

South of the border, Fair 4 All Finance, supported by investment from dormant assets, has provided access to funding and support to help the scale up of provision in England. For a variety of reasons there is not an equivalent agency in Scotland, despite many of the issues facing providers being very similar. Earlier in 2021, with the Carnegie funds fully invested, I began to think about what more SIS could do to refresh and continue this work – not least because of the challenges of a wider cost-of-living crisis.

Fortuitously, a longstanding member and supporter of the Carnegie working group, Stephen Pearson, got in touch to explore SIS’s appetite to convene a new interest group. Fast forward a few months and we have now created Financial Inclusion for Scotland (FIS) with a launch event planned for later this year. Stephen will chair the group and as members, SIS will provide funding and secretariat services.

FIS has the aim of enabling better financial inclusion in Scotland by supporting those who find it difficult to access fair or affordable financial services, such as free banking, affordable credit and money management services. Among the founders are Scottish Financial Enterprise, as the membership body for the financial services industry; Scotcash, a well-established and respected provider of credit based in Glasgow; the Poverty Alliance, StepChange and Money Advice Scotland (amongst others) who bring the lived experience of individuals and households that face financial exclusion; and Fintech Scotland, to explore how innovative technical solutions might play their part.

One key aim is to develop together a financial inclusion strategy for Scotland, with a set of clear and deliverable actions that will improve access to finance for all, particularly those individuals and households that find themselves excluded from the mainstream. We are already working closely with the Scottish Government to develop these plans. This is a new way of working for SIS, however today’s challenges demand fresh thinking from all of us.

In reality though, not a whole lot has changed in those 20 years since I first reviewed that business plan. I am therefore looking forward to learning, reflecting and acting alongside our new partners, and exploring how SIS might continue to share knowledge and build expertise in this area, to attempt to make real and meaningful progress in this challenging area.

SIS CEO, Alastair Davis

Alastair Davis is CEO of Social Investment Scotland