Ethical bank Triodos has sounded a note of optimism in the current doom and gloom of the banking world, announcing record levels of lending to the social enterprise and charity sectors.
Figures released exclusively to Social Enterpriseat the Voice09 conference in Birmingham reveal that the bank has increased its lending to charities and social enterprises by £20m during the period from January to the end of December 2008.
Lending to charities and social enterprises is now at a record for the bank of £93m.
Triodos said this was at a time when most high street banks were ‘pulling back from lending to the sector, viewing them as too high risk in a difficult economic time'.
For the first time, Triodos - which only finances charities and businesses delivering social, environmental or cultural benefits - is lending more than £200m in total.
Sue Cooper, deputy head of business banking and the leader of Triodos Bank's social banking team, said a similar growth profile was expected during 2009.
‘This is not an easy time for the third sector and social enterprises,' Cooper said. ‘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.'
She added: ‘The rise in lending requests so far this year is a promising sign for the sector, because it shows entrepreneurs and organisations are 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 long term.'
Triodos believes some market segments are particularly ripe for growth during 2009. Frontline health provision is one area the bank singles out for optimism - an area also highlighted by Cabinet Office minister Liam Byrne when he addressed Voice delegates at the opening session of today's event.
Cooper said there were also opportunities brought about by the drop in property prices.
‘Social enterprises are now not only able to buy more affordable property, they can also choose different funding models to finance them,' she said. 'We are currently working on proposals to raise equity, with money from the Triodos Opportunities Fund, for investment in projects.'
Triodos has significantly more money on deposit than it lends, which has enabled it to avoid borrowing from other banks and cushioned it from the vagaries of the market.