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The importance of responsible finance

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The importance of responsible finance

Published: March 27, 2023

Responsible Finance is the national membership body for responsible finance providers. With over 50 members and supporters, its vision is to create a fair financial system in the UK. They aim to scale up the community development finance sector, enable investment to flow into communities and create positive economic, social and environmental impact.

Unity Trust Bank Relationship Manager, Jason James, reflects on a recent Responsible Finance Members’ Day. He also talks about the importance of alternative sources of finance for the sector.

Unity Trust Bank Relationship Manager, Jason JamesAccording to Responsible Finance’s 2022 Impact Report, Community Development Finance Institutions (CDFIs) advanced more than £228m into UK communities in 2021, that’s a 32% increase on the previous year. As a result, thousands of small businesses and social enterprises have remained resilient. Many have even gone on to thrive despite the continued economic uncertainty.

Members’ Day

The work of Responsible Finance’s members is needed now more than ever. The recent Members’ Day was a fantastic opportunity for those working in community development finance to network. Attendees learn from each other, share best practice and find new ways to boost access to finance for businesses and social enterprises.

Looking for funding to take your business to the next level, however, can be a daunting process. The fear of being declined can be enough to put some off applying in the first instance.

Unlike many mainstream banks, CDFIs get to know your business. By taking an in-depth but supportive look at your application, they could lend when other providers might not.

Since 2001, Unity Trust Bank has provided CDFIs with wholesale finance. Our lending has helped to support hundreds of SMEs.

At the Responsible Finance Members’ Day, a key theme was the importance of CDFIs being able to secure larger investment to meet demand, and the requirement for the appropriate policies and procedures to be in place and regularly reviewed.

Business Enterprise Fund

Business Enterprise Fund is an example of how Unity has helped a CDFI to receive a more significant sum. Having provided funding of £8,500,000, Unity was able to help Business Enterprise Fund support around 120 SMEs. They operated across the North of England to create and retain jobs and achieve business growth.

Stephen Waud is the Chief Executive at Business Enterprise Fund. He said: “We have partnered with Unity Trust Bank for over 10 years now. They have always fully supported the work we do in changing communities for the better in some of the hardest to reach areas of the UK. It is a real bonus for a social enterprise like ourselves knowing we have a Financial partner who supports and backs the work we do.”

At Unity, we recognise the vital role that CDFIs play. We have a strong track record in supporting the sector to help businesses grow and will continue to do so.

If you’re a CDFI looking for support to secure larger investment, or a business looking for advice on how to secure funding, please contact us for more information.