Launch of new fund: asda community capital
Social Investment Scotland
Small investment amounts, at competitive rates with flexible terms? No security needed? No interest or capital payments for a year, and one year interest free? Really? Yes, Asda Community Capital has arrived!
Social Investment Scotland has teamed up with Asda to launch a new fund aimed at supporting social enterprises to make the step change they need to increase their impact.
This social investment fund is unique, a first in Scotland and has been launched with the proceeds of the Scottish Government’s single use carrier bag levy, introduced in October 2014. Asda is using the net proceeds of this levy to deliver lasting social impact in communities in Scotland.
For more information including guidelines and an expression of interest, click here.
Asda Community Capital will donate the funds arising from the bag charge to support innovative social enterprises and community projects across Scotland. In what is a UK-first, the partnership with SIS will see half of the proceeds distributed through loans, helping third sector organisations who would otherwise find it difficult to get access to funding.
Investment will be available from £10,000 to £50,000 for a period of up to 6 years. Interest will be charged at 5% fixed from year 2 to year 6 (i.e. for 5 years), however no interest will be charged in year 1. In fact, an investee will not have to pay back anything in year 1 (neither interest nor capital), and no interest will be accrued during this period. Further to this, social enterprises will be able to pay back the loan early, with no penalty, should they be in a position to do so.
The other half of the funds will be donated to Foundation Scotland to be distributed in small grants of up to £2,000.
Estimates suggest that single use carrier bag charging by Asda could raise as much as £800,000 in the first year of carrier bag charges being levied. Although if the policy has the Government’s desired effect, carrier bag use will fall and there will be a subsequent drop in proceeds. Asda’s approach will ensure that the donated funds have a meaningful benefit for communities long into the future.
Kevin McBride, Asda’s Regional Operations Manager for Scotland, commented: "At Asda, we want the carrier bag charge to have long-term social – as well as environmental – benefits. By working with our partners Social Investment Scotland and Foundation Scotland, we have the opportunity to invest innovatively in our local communities, helping to grow the social enterprise sector and supporting local projects in every Asda mile."
Alastair Davis, CEO, Social Investment Scotland, said: "Scotland’s third sector has an increasingly crucial role to play in fostering thriving communities through local job creation, community engagement and economic development. Many of the enterprises delivering these benefits frequently struggle to access capital, either as a result of their own investment readiness or the lack of suitable financial products. Through the creation of Asda Community Capital, we’ll be able to support the development of highly motivated, small, community-based enterprises throughout Scotland. In turn, we can help to connect more capital with communities, making a real, measurable and sustainable impact on people’s lives."