Thread by @DevlinGed

So I’m slightly late to getting around to some thoughts on this review from @peoplesbiz & the Blended Finance partnership with @SASCapital & @KeyFund 👇🏻

#socinv

1/

https://twitter.com/icstudiesuk/status/1448593950948876290

Conflicts out of the way - I helped set up and run both for @peoplesbiz and am at @KeyFund - so hardly an objective view! - *BUT* these partnerships have a lot of indications of the role blended finance can have for community businesses

#socinv

2/

.@peoplesbiz supported two waves of investments with the @KeyFund

24 deals agreed between, including £1.8 million in lending from Key Fund’s existing funds, alongside £1 million in grants provided by Power to Change (or quite a bit of leverage, if you prefer)

#socinv

/3

A total of £2.8 million in funding .

These @KeyFund
deals ranged in size between £10,000 and £300,000 for the loan component, and £7,500 and £100,000 for the grant element

#socinv

4/

In addition, estimated a further £872,762 leveraged from external sources, mainly in the form of additional grants.

But also three deals which include overdrafts or mortgages from external lenders, and two including community share offers

#comshares #socinv

👆🏻 I think the above is probably a bit low, but an extra c.£1m on top of c.£2m in lending shows @peoplesbiz money gets a lot of bang for its buck with end users

#socinv

6/

The shame is that, bar @peoplesbiz & @SASCapital & @KeyFund arranging with community businesses at the deal level, the end users are the ones doing the leg work to secure the leverage - always seems to me that the #socinv ‘sector’ could do lots more to help here…?

7/

.@KeyFund reported they often provided finance alongside other lenders & have a long-term track record of unlocking external finance, filling loan to value gaps and enabling bigger deals with other investors, often with a leverage ratio of 1:1

So it is possible

8/

#socinv

.@KeyFund suggested that @peoplesbiz ‘s enabling approach allowed them to take advantage of their greater reach into deprived areas, developed over a long history of operation.

Key Fund can reach organisations that others can’t.

#socinv

9/

The important bit:

@KeyFund were able to consistently achieve between 70% & 80% of deals in the three most deprived deciles of areas (IMD), consistent with Key Fund’s mission, something comparably difficult to achieve through large scale grant making (arguably?)

10/

#socinv

The other important bit -

“Ultimately, key parties interviewed for report agreed that a social finance market built around the concept of patient and flexible lending, including blended deals, would rely on Government support and subsidy.”

11/

#socinv

“This argument has only gained more weight with the COVID-19 pandemic”

/ends