Charity Bank, the loans and savings bank for social good, has released a ground-breaking study showcasing the financial impact of its loans on charities and social enterprises. This first-of-its-kind study, incorporating data analysis and borrower surveys, provides valuable insights into the tangible benefits experienced by organisations supported by Charity Bank.
Analysing Financial Metrics
As part of the study, Charity Bank analysed financial metrics for 79 social sector borrowers over a four-year period from one year prior to the borrowers’ initial loan to three years following the loan. Key findings include:
- Turnover Boost: Supported charities experienced an average increase of 16% in turnover, demonstrating a significant boost in revenue generation.
- Net Income Growth: Borrowers saw an average growth of 8% in net income, contributing to their financial stability.
- Total Assets: Average total assets increased by 47%, reflecting the positive impact of Charity Bank loans often have in facilitating asset acquisition and expansion.
- Net Assets: Average net assets increased by 35%, in many cases reinforcing the loans’ contribution to financial strength and resilience.
Survey Findings: Strengthening Impact and Resilience
The study also included a comprehensive survey among Charity Bank borrowers, where respondents reported changes in various growth and resilience metrics since receiving their first loan from Charity Bank. It revealed the following key findings:
- Increased Resilience: A remarkable 78% of borrowers reported increased resilience after receiving a loan, supporting long-term sustainability.
- Financial Self-Reliance: 71% of borrowers stated that they became less dependent on grant funding, fostering stability and independence.
- Enhanced Planning Abilities: 73% of borrowers improved their ability to plan and adapt to evolving circumstances.
- Improved Short-Term Shock Resilience: 57% of borrowers experienced enhanced ability to withstand short-term shocks.
- Expanded Impact: 74% of borrowers increased the number of people they supported, positively impacting more individuals and communities.
- Higher Quality Outcomes: 58% of borrowers delivered higher-quality programs and services, positively transforming lives.
Mwansa Phiri, Impact, Policy, and Diversity Manager at Charity Bank, emphasised, “This study reaffirms the transformative power of loan finance for charities and social enterprises. Accessing loans from Charity Bank strengthens their financial position, enabling them to expand their impact and adapt to change. We remain committed to providing the support necessary for the sector’s long-term sustainability and success.”
Big Society Capital (BSC) contributed to this study through its Enterprise Level Impact framework, evaluating the impact of lending on growth and resilience.
Iman Kabani, Interim Data and Portfolio Manager at BSC, said: “We applaud Charity Bank’s commitment and strides in comprehending the impact of their loans on borrower growth and resilience. This is not only important in the current macro-environment but also crucial in the long term to better support social enterprises and charities in improving the lives of vulnerable people across the UK. As we roll out the framework to include more organisations and more years of data, we hope to provide further value and insight to the sector.”
To learn more about Charity Bank and its loans, please visit charitybank.org.
