UCIT Chairman’s Report
Two clear themes have emerged over the past decade – a reduction in the level of grant support which has made life more challenging for the Community, Voluntary, Charity and Social Economy sectors and a reduction in the appetite of mainstream funders to provide finance into the sector and to the wider small business economy.
In response, Ulster Community Investment Trust (UCIT) has evolved to become one of the UK’s leading providers of social finance. Since becoming operational in 2001, UCIT has approved loans totalling £80m to over 400 third sector organisations across the island of Ireland. Demand is at an all-time high with a record £14m in new facilities approved to 123 organisations during 2017.
Five years ago, the UCIT Group diversified into the Small Medium Enterprise sector when we took on management of the Northern Ireland Small Business Loan Fund on behalf of Invest Northern Ireland. This fund was set up to mitigate “market failure” and to provide access to finance for small businesses, sole traders and partnerships, keen to develop and grow, but found it difficult to access funding through traditional sources. To date the Northern Ireland Small Business Loan Fund has lent over £7m to almost 400 businesses and is estimated to have helped create over 150 new jobs and additional sales of almost £30m. Realistically, these businesses would have had little chance to raise funding elsewhere.
Our subsidiary business in the Republic of Ireland, Community Finance (Ireland), continues to flourish. During 2017 Community Finance (Ireland) approved loans of just under €9 Million to 73 third sector organisations in the Republic of Ireland. We are delighted that the Social Finance Foundation, has responded to this performance by increasing our credit lines, with the clear intention of raising this further to support our growth in 2018.
As Chair of UCIT I am keen to build upon these successes and seek innovative ways to support the sector and meet emerging needs. As an example of this, in May 2017, UCIT collaborated with Building Change Trust and Belfast Charitable Society in a unique partnership to create the £1m Building Better Futures Loan Fund. The Building Better Futures Fund provides much needed small, unsecured loans for community-based enterprises across Northern Ireland. To date it has been a tremendous success, providing support where it would otherwise not be available.
Our driving ambition is to enable communities and small businesses to enable themselves and in the process enhance the lives of many. We have found innovative ways of doing this in the past and my ambition for our business is that we will find many more into the future.
In conclusion I would like to acknowledge the commitment of my fellow Board members for giving generously of their time and wisdom and to express my thanks to Harry McDaid, Chief Executive and his team for their dedication in ensuring UCIT continues to be that most unique of organisations – a lender with a heart!!.
Alan Moneypenny, Chairman
Ulster Community Investment Trust (UCIT)
UCIT Chief Executive’s Report
2017 has been Ulster Community Investment Trust’s (UCIT) busiest ever year with loan approvals of over £6m to 50 third sector organisations across a wide range of sectors, geographies and communities in Northern Ireland.
Over the years the scale and scope of the local social economy has grown rapidly and this is reflected in UCIT’s increasingly diverse loan portfolio which includes sports clubs, charities, green energy projects, faith-based organisations, social housing schemes and arts projects.
Although the social enterprise sector continues to grow, it comes at a time when public funding is tightening and mainstream lenders are focussing elsewhere. Not only is UCIT stepping into the gap but it is doing so within an average two-week turnaround for loan applications.
In the Republic of Ireland, our subsidiary business, Community Finance (Ireland), in partnership with the Social Finance Foundation has funded rapid growth in that market. In total €8.9m of loans were approved by Community Finance (Ireland) to 73 third sector organisations. We have invested significantly in our business in the Republic, with the appointment of three new members of staff during the year. 2018 will see a further addition to the team, with the recruitment of a Lending Executive dedicated exclusively for the Dublin region.
In response to the need to further develop and widen the provision of social finance to the third sector in Northern Ireland, UCIT partnered with Building Change Trust and Belfast Charitable Society to create the £1m Building Better Futures Loan Fund.
The Fund, which provides community-based enterprises with access to small, unsecured loans was officially launched at a well-attended event in Clifton House in May. Loans aggregating £500k have already been approved during the Fund’s first year of operation. Again, these beneficiaries would have had little chance of raising funding elsewhere by virtue of their size or relatively short track records.
While the demand for smaller value lending is strong with a high volume of transactions, a record deal flow has also been evident in support of larger projects. Recent beneficiaries include St Paul’s GAC and Shorts Sports and Recreation Club in Belfast which together have received £350k to support major community investments. We were also delighted to assist East Belfast Enterprise Ltd, The Ortus Group and Strabane Training services with finance which has been used to enable them to expand their operations.
To help address the market failure in the provision of debt support, Invest Northern Ireland launched the NI Small Business Loan Fund which is managed by Ulster Community Investment plc (UCI), a subsidiary of UCIT, and delivered in partnership with Enterprise Northern Ireland.
The Fund was set up to provide access to finance for small businesses, sole traders and partnerships which are keen to develop their business, but find it difficult to access funding through traditional sources. Demand has been remarkably strong with £7m of loans dispersed to over almost 400 firms since the fund was launched in 2013. As might be expected, a wide variety of businesses have been supported.
Firms such as these are the bedrock of Northern Ireland’s economy and future prosperity; supporting their growth will be especially important as we transition to a post Brexit trading environment.
Harry McDaid, Chief Executive
Ulster Community Investment Trust (UCIT)