NAVCA welcomes launch of Big Society Capital
NAVCA has welcomed the launch of Big Society Capital, the wholesale bank that aims to make £600 million of loan finance available to the voluntary sector over the next four years. NAVCA is pleased that funding from dormant bank accounts and high street banks is being made available to charities and voluntary organisations to help local communities. However, NAVCA warns that Big Society Capital needs to value social impact to realise its potential. If interest rates are set with only the financial return in mind, many small charities, which could benefit from loan finance, will be priced out.
Joe Irvin, Chief Executive of NAVCA, said:
“NAVCA supports this initiative as it will get much-needed finance to voluntary sector organisations. We have always campaigned for a mix of funding to enable a healthy voluntary sector. This mix includes grants, contracts, donations and loan finance.
“Although not suitable for all, loan finance has the potential to make a real difference for many voluntary organisations, including many small charities. But the loans must be accessible. We are concerned by the Charity Aid Foundation’s warning that the cost of the loans may mean they are out of reach for smaller charities. The interest rate level must reflect a fair balance between helping society and earning a financial return.”