2014 publications

In Demand: the changing need for repayable finance in the charity sector

New research by CAF Venturesome, our pioneering social investment arm, shows that charities’ demand for unsecured lending is set to grow over the next five years.

252 charities were interviewed in-depth to gauge:

  • Their attitudes to taking on repayable finance
  • How they expect their borrowing needs to change over the next five years
  • Their perceptions of barriers and catalysts to increasing the take-up of repayable finance.

Among the key findings are:

  • While awareness of the concept of social investment is low, charities are open to new methods of finance and are generally confident in their ability to repay their borrowing
  • The majority of lending that charities currently take on is to support asset acquisition
  • Charities will need to borrow for a wider variety of purposes in the future, so will expect a range of financial products and increased availability of unsecured finance
  • Among those charities likely to borrow in the next five years, a lack of information about suitable financing options and providers are considered to be the biggest barriers to taking on repayable finance.

The report concludes that charities need better access to repayable finance – available for lower and more affordable amounts – from investors who are prepared to accept a risk.

This insight will help charities choose suitable forms of repayable finance with confidence, and encourage the sector to design new products that meet these changing needs.

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