The Responsible Finance Podcast

Danny Kruger MP answers questions from Responsible Finance CEO, Theodora Hadjimichael: How can Government stimulate a boom in the social economy? Danny has described the role of social enterprises in “fixing broken markets” – what does he mean by broken markets? How can social enterprises address them? Banks and tech companies invest heavily in CDFIs (community development finance institutions) in the USA. How can we unlock more investment from tech and corporates into the UK's CDFIs and the communities they serve? What role can tax regimes and tax reliefs play in stimulating social investment? How can the UK's social lending sector persuade Government to help it scale-up? This interview took place as a live webinar in May 2021.

Can business be a force for good? Definitely, according David Hanney, CEO of Alpkit, a business and certified B Corp which designs and sources outdoor clothing, camping equipment, bikes and other gear. Alpkit sells direct-to-consumers through its website and its stores in the UK. It now has more than 100 employees – 6 years ago there were just 12. It's a great business in many ways, as David explains, with a set of six sustainability principles informing how it operates (and central to how it does business). Alpkit must be commercially viable to exist. Alongside this, it knows it has a responsibility to its staff, suppliers, customers, the environment and the communities it operates in to be a good citizen. It's growth has been supported by a responsible finance provider and David explains why and how it secured finance, what the process was, and how it now banks with the mainstream bank which actually referred it to a community development finance institution (CDFI). He also talks through the accreditation process for becoming a B Corp and Alpkit's scores, how Alpkit ran a crowdfunding campaign which was fully subscribed in just minutes, and how in the next 5 years the most innovative and commercially successful products will be sustainable products. We recorded this interview with David in Spring 2021. Since then Alpkit's sustainable growth has continued, with new stores in Edinburgh, Betws y Coed, and Ilkley on top of its shops in Ambleside, Hathersage, Keswick, the Metrocentre. It is about to open in Bristol. What next? Alpkit's website Its Six Sustainability Principles and 2021 Sustainability Report Our member, First Enterprise - Enterprise Loans, has worked with thousands of start-ups and growing businesses (like Alpkit) to help them follow their dreams and achieve their goals.

Imagine yourself on a zero-hours contract, leaving home early in the morning to deliver a sports therapy session. By the time you've spent several hours travelling to the place which booked the session - at your own expense - it's been cancelled. And you don't get paid. Now imagine making that journey in a wheelchair. Carrying a heavy bag in your teeth. And imagine when the session is not cancelled and you do deliver it, your transformative work is valued by participants, but not by your employer. Frustrations like these led Louis Speight, a former European-record-holder in the 800 metre T33 Wheelchair Sprint, and a colleague to launch their own social enterprise, Omnis Circumvado CIC. In this interview Louis describes: the profound impact sport made in his life, how Omnis works with children and young people in SEN (Special Educational Needs) schools and with elderly people in day centres, why “the house will set on fire,” when launching a social enterprise. succession planning and whether business growth is the right thing to do. why Omnis worked with Key Fund, a responsible finance provider, and how this helped the organisation. And much more.

In one of the worst-offending industries for landfill and modern slavery, Kalopsia proves you can make products more ethically and minimise environmental impact. A batch manufacturer of textiles, apparel and accessories, Kalopsia is a social enterprise which started as an artistic collective and morphed into a textile producing community interest company. It makes exciting products (including for brands you will have heard of), supports the textile industry and the people in it, minimises waste and environmental impact. And it demonstrates all of this is possible as a sustainable (in all ways) business. In this episode, Adam Robertson and Nina Falk of Kalopsia CIC describe: Kalopsia's journey from running galleries and exhibitions to batch manufacturer how Kalopsia has learned from other industries to develop highly efficient processes and systems what batch manufacturing means why their customers work with Kalopsia making the user experience on the website as easy as possible the importance of design and branding the impact of being a finalist in the 2018/19 Social Enterprise of the Year category in the Citi Microentrepreneurship Awards – and of winning the Manufacturer of the Year Award at The Scottish Business Insider "Made in Scotland Awards" why Kalopsia worked with responsible finance provider, DSL Business Finance their plans for the year ahead the widespread misinformation about ethics and sustainability in fashion and textiles - with a key call to scrutinise claims you see.

Glasgow Wood Recycling transforms reclaimed wood which could otherwise be wasted into high quality furniture and products.   The social enterprise and charity, launched in 2006, follows the Community Wood Recycling model. It has made furniture from reclaimed timber for a diverse range of customers from the public to hotels, boutique wedding venues, retail outlets, and schools. The business has prevented over four thousand of tonnes of wood from being wasted, has provided exceptional training to hundreds of people and has 19 employees and 45 volunteers. In this episode, Peter Lavelle covers engaging and looking after volunteers, securing appropriate customers, staying true to your values, winning the Citi Microentreprenuership Award for Sustainability and working with a responsible finance provider.

Want to invest in an organisation supporting under-served businesses and disadvantaged communities - and be rewarded with an attractive tax relief for doing so? Community Investment Tax Relief is the answer, according to Katy Ford, chief executive of Foundation East. Foundation East lends to and supports small businesses unable to access mainstream finance. Their CITR Investors can receive up to 25% tax relief spread over 5 years - and unlock affordable finance for businesses which would otherwise be unable to access it. In this episode, Katy gives examples of the businesses which are now thriving thanks to a loan and support from Foundation East; describes how CITR works (and how Foundation East has attracted investment); and gives her views on how responsible finance providers should innovate and collaborate. Here are the full timings: 1:40 Foundation East is a Community Development Finance Institution, also known as a "responsible finance" provider. It lends to small businesses unable to access mainstream finance. 2:20 Why does Katy do the job she does? 3:15 Katy was brought up on Guernsey and became more and more aware of the divide between "the haves and the have-nots." 5:25 Examples of small businesses, unable to access mainstream finance, which have borrowed from Foundation East. 10:31 Why now is an especially interesting time for Foundation East. 11:10 Foundation East is a mutual society with a legal structure as a “bencom” - society for community benefit. It can sell shares in the mutual society; those funds are used to invest in (lend to) small businesses. Foundation East offers 2 types of shares including Community Investment Tax Relief (CITR) shares. 11:40 What is Community Investment Tax Relief? How does it work? 12:30 What are the challenges when talking with potential investors, or potential advisors to investors? 13:25 Comparisons with EIS and SEIS schemes. 14:10 The minimum and maximum investment levels for CITR investments into Foundation East. 15:30 Whatever level of investment a member makes they get one vote. 16:30 The difference between withdrawal and transferable shares. 17:30 Foundation East's shares were launched on Ethex at the end of March 2019. 18:45 How Foundation East is reaching out to potential investors. 19:45 “It's up to us as a sector to push this tax relief.” How is Foundation East working with other Responsible Finance providers? 22:08 CDFIs have great stories and can evidence the work they do has enormous impact on people's lives: jobs created, wellbeing improved, and more. 24:20 The misunderstanding that any business which cannot access money from a mainstream source is completely wrong says Katy. Yet sadly some accountants and advisors - and some in Government - still have this perception. This is why the Responsible Finance sector is essential. 26:00 Foundation East has already attracted over £200,000 via the CITR share offer. Where's the money mainly coming from? And has there been a particularly effective route to market? 29:20 How Katy believe responsible finance providers must innovate and collaborate. 31:15 further examples of businesses and social enterprises supported and enabled by Foundation East. 33:50 How to get in touch with Foundation East

What is Open Banking and how can it help people who are financially vulnerable and financially excluded, including people who are unbanked? How can Open Banking benefit businesses, social enterprises and the self-employed? How will Open Banking help Responsible Finance providers (and credit unions) – and what should they be doing and thinking about? And is there a danger that Open Banking might facilitate discrimination against people who are already financially vulnerable? Faith Reynolds is the Open Banking Consumer Representative. She's part of a steering group responsible for delivering the technology that underpins the Open Banking initiative. Faith joins us in the latest episode of the Responsible Finance podcast to answer these questions and more.

The Magic Roundabout, banknotes you had to write your name on, micro-lending in 1542 and slurping up energy to create cryptocurrency. There's plenty to think about in this new episode. Danyal Sattar is Chief Executive of Big Issue Invest, which span out of The Big Issue magazine. Big Issue Invest is a responsible finance provider which provides finance from £10,000 to £3m to social enterprises and charities. In this episode Danyal addresses: Should responsible finance providers embrace fintech? How good regulation builds trust. Three wishes for the future of responsible finance.  

From kitchen table business to employer of ten and featured on the front page of national newspapers: BeeBee Wraps makes compostable food-wrappers from organic cotton, tree resin, British beeswax and organic jojoba oil. Founder Kath Austin launched BeeBee Wraps when she wanted to minimise her own family's use of plastic and became curious about how people kept food fresh before clingfilm. In this episode, Kath discusses how she began to experiment in her own kitchen making waxed cotton covers using ethically sourced materials. Friends who were using the wraps she produced encouraged her to turn it into a business. She listed the product on Etsy and orders began to fly in. Having secured finance to support growing the business, Kath has sped up production, launched a zero-waste product and – because of demand – taken on larger premises and more staff. She also needed to move away from Etsy to her own ecommerce platform as the business grew. Kath covers the journey of launching and scaling up the business, marketing, gaining PR coverage (including one article which skyrocketed orders), where and how she accessed business support and finance, social media, delegation and much more. If you're launching or growing a business, don't miss this episode.

Neil Kadagathur is CEO and co-founder of Creditspring, which he describes as a "new type of credit product designed for people with limited savings specifically for unexpected expenses." Creditspring launched in September 2018 and at the time of recording this podcast has 1000 members. Neil describes how the product works, the motivations behind setting it up, his opinions of the payday loans industry, overdraft fees and the credit card markets in the UK and America, and his thoughts on the future of fintech in the responsible finance space. Creditspring's members pay a monthly fee and are then able, if they need to, to draw down up to two £250 loans. The loans are repayable with zero interest – Neil describes Creditspring as akin to an insurance policy. Some 40 percent of people in the UK have no savings and are especially vulnerable to the impact of an unexpected bill such as a washing machine breaking down, says Neil. Some turn to high cost payday lenders which leads to a spiraling problem. Listen to the podcast to learn more about: Creditspring's proprietary decision making process and how they decide whether to take on a member, their acceptance rates and delinquent payment rates, the stimulus behind launching the business, how Creditspring improves members' credit ratings and scores, the marketing strategies and tactics this fintech startup has found to be most successful, how Creditspring's team worked with charities focusing on personal debt to develop its offer, the biggest challenges on the way to securing a license from the Financial Conduct Authority, Neil's own background, initial interest in microfinance and earlier career in banking and credit, His forthright opinions on payday lenders and regulation in the UK and USA – and on the future of responsible financial technology.

Jennifer Tankard interviews Cliff Rosenthal who has been an influential leader in the United States' community finance movement for two decades. Cliff is the author of the new book, Democratizing Finance - Origins of the Community Development Financial Institutions Movement. In this fascinating and wide ranging discussion, Jennifer asks Cliff about: • the origins of the movement since Benjamin Franklin's endowment of revolving loan funds in 1790, • President Clinton's progress after his campaign promise to launch 100 community development banks and 1000 micro enterprise programmes, • whether CDFIs fulfilled initial expectations to become full service community banks – they have had transformative social effects but not transformed banking - why not? • why there's been a "lamentable" decline in the number of banks and credit unions that serve minority communities • whether CDFIs can really tackle the level of financial exclusion faced by people in America, • cross-Atlantic learning about regulating payday lenders, • CDFIs in America often finance large and complex projects – what can we learn about managing risks? • two specific dilemmas for community development finance institutions in the USA which are especially relevant to the UK's responsible finance providers, • as finance becomes increasingly complex and technical, does democracy of finance really matter and is it possible? • what actions are taking place to improve diversity in CDFIs' leadership? • could opening up publicly-owned banks in order to solve the cannabis banking problem generate funding for public investment? • the future for the sector given the challenging political environment, • the basis of Cliff's "considerable optimism" for the future of community development finance in the USA, despite the countering forces whether payday lenders or budgetary austerity.

Jo founded and runs The Real Junk Food Project Sheffield, a social enterprise which saves six tonnes of great food from being wasted every week. The business collects food from organisations 6 days per week, operates 2 pay as you feel cafes, works with 16 primary schools, runs a veg box scheme, operates a sharehouse market and more. It's tackling some of the most pressing social and environmental challenges head on, has saved over 300 tonnes of food from being wasted, enables people to enjoy great food and is a thriving social enterprise with diverse revenue streams. Jo talks us through how The Real Junk Food Project Sheffield came to be, its ups and downs, lessons learned, how it was supported by Responsible Finance provided Key Fund, and the impact of being a national finalist in the Citi Microentrepreneurship Awards 2018.

Sophie Maxwell is the founder of The Really NEET Project, a college which works with vulnerable young people aged 16 to 24. In 2009 she began running projects in secondary schools with excluded pupils. That led to national awards and setting up the first college in 2011. Sophie describes how her experience of homelessness informed Really NEET's programme to give young people the support they need. Really NEET has secured a range of contracts because "we're good at what we do” says Sophie, “we can help councils engage a cohort of learners they really struggle with.” She covers winning contracts, influencing education policy and how responsible finance provider Key Fund provided crucial support during Really NEET's journey. More about Really NEET at www.reallyneet.co.uk - and enjoy the podcast!

Faisel Rahman is CEO and founder of Fair Finance, a social enterprise tackling financial exclusion which has built a reputation for entrepreneurial growth, social and commercial rigour. Faisal talks about how working with Grameen and the World Bank in Bangladesh sowed a seed that led to Fair Finance, and how understanding what makes high cost credit providers successful leads to designing products that people actually want. Millions of underbanked people are either treated badly by the mainstream or exploited by non-mainstream providers. Responsible Finance providers and credit unions should aim to put high cost lenders out of business by being a better alternative and ensuring they are customers' first choice. Data disclosure and transparency features largely in this episode too. And responsible finance providers which can prove their social impact and their commercial viability must increase their ambitions of scale – high cost credit is a multi-million pound industry.

Shaz Shah is co-founder of Harry Specters, a business which makes lovingly handcrafted chocolates. Its products have won 22 Awards for their taste and quality. It's also a business with a mission: to offer paid employment to, and free training for, young people with autism. "You can have a great business and also contribute to society," says Shah who covers: why the business was launched how it grew from a home-based operation to taking on premises where the name came from why chocolate-making, which requires specialised skills, offers great opportunities to people with autism funding the business' development and growth through a mixture of grants, loan finance, equity, and "chocolate bonds" securing the first corporate customers the biggest challenges and opportunities, so far Enjoy the podcast and visit www.harryschocs.co.uk to enjoy some chocolates.

Lancashire Community Finance was recognised earlier this year for its resilience and consistency in delivery of access to finance. It provides personal, home improvement and startup loans and reaches clients "even harder to reach than the average" in the responsible finance sector. Elaine talks about how this small organisation, rooted in its local community, competes with high interest and payday lenders and rent to buy stores. In the podcast she describes what needs to happen for the responsible finance sector to continue to thrive.

Actor and activist Michael Sheen launched the End High Cost Credit Alliance at Responsible Finance 2018. The Alliance seeks to make affordable fair finance mainstream and support providers and customers. This episode features Sheen's speech highlighting the Alliance's pragmatic and collaborative approach. "I'm in this for the long haul," says Sheen, describing the problems caused by high cost credit, why the Alliance is important, his motivation for launching the movement and its five priorities. And Jennifer Tankard discusses the work of responsible finance providers and the recent FCA review of high cost short term credit. Find your nearest responsible finance provider: www.findingfinance.org.uk More about Responsible Finance: www.responsiblefinance.org.uk More about the End High Cost Credit Alliance: www.the-alliance.org.uk

Stephen Henderson's business journey began at 16 when he discovered the cajon (a traditional percussion instrument) at a party. The keen musician and woodworker yearned for one of his own and got his tools out. With some wood left over, he refined his design of “custom cajons” and began to advertise them online while studying for A-Levels. His unique design proved popular with other musicians. Percussionists from all over the UK contacted Henderson to buy his cajons, telling him how much they appreciated the custom features. Now Henderson, 23, runs Ruach Music, supplying musicians worldwide with handmade electric guitars, electric basses, pedal-boards for guitarists, cajons, effects pedals and accessories. Turnover tripled this year, the firm employs eight full-time staff and an international foundation named Stephen Young Micro Entrepreneur of the Year in March 2018. Stephen describes how access to "responsible finance" supported the business' development.

Charlotte Purdie was a new parent with a problem. There was nowhere to go with the right facilities to enable her to feed her baby. So Purdie – then 21 – did something about it. She launched The Milk Lounge, a cafe in Nottingham with fantastic, family friendly features. From clean and spacious changing rooms, activities for toddlers and older children, sensory spaces, peer support, homemade cakes and healthy food, language classes, feeding rooms and buggy parking, The Milk Lounge was designed to meet families' needs. The original cafe thrived and Charlotte has opened a second cafe. In episode 4 of The Responsible Finance podcast, Charlotte tells us about: the "rollercoaster" ride of launching and growing a business, biggest challenges, and how she overcame them, why she turned to a responsible finance provider when she needed money to get The Milk Lounge going but the bank said "no."

Responsible finance providers lend to people, businesses and social enterprises. This episode features Duncan Parker, chief executive of Fredericks Foundation. Duncan covers the Foundation's Women's Loan Fund; their work to reduce unconscious bias on lending panels; his background in international development; and his worry that excessive concern for profit in microfinance, and the demands of some funders, is leading some providers away from poor clients to serve better-off clients who want larger loans.

Responsible finance providers lend to people, businesses and social enterprises. They provide finance that is fair, support and advice. In the Responsible Finance podcast we meet providers and their customers. One is Purple Shoots, a not-for-profit microfinance organisation set up and run by Karen Davies to tackle unemployment and economic problems. Through "little loans to grow ideas" Purple Shoots helps people set up and grow their own small businesses.

Responsible finance providers all over the UK lend to people, businesses and social enterprises. They provide finance that is fair, support and advice. In the Responsible Finance podcast we meet some of these providers and their customers. Episode 1 features Matt Smith, chief executive of Key Fund, which invests in and lends to community and social enterprises which have traditionally been excluded, particularly in disadvantaged areas. Matt describes his approach to supporting clients, leadership and facing challenges.