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.