Harish Manwani, the Chief Operating Officer of Unilever argues that values, purpose and sustainability are, should be, key business drivers.
A short journal entry. The film, the words say it all!
Profit – not always the point
Monthly Archives: March 2014
Office of Fair Trading, banks and SME’s
Published a week or so ago now, the Office of Fair Trading update on their market review of banks and their attitudes and approaches to the SME sector makes for interesting reading.
The report notes that the mainstream banking sector has made some positive movements and improvements to their SME approaches, following the 2002 Competition Commission’s investigation into banking practice.
View, print or download the full report from the OFT here.
However, there is much to be concerned about from an SME perspective ‘...the OFT has received concerns about failure to comply with…undertakings, which prevent banks from requiring an SME to take out a Business Current Account (BCA) in order to obtain a business loan (that is ‘bundling’ of BCAs with business loans). The OFT considers that compliance with these undertakings is important as they are designed to help providers to compete effectively in SME banking’.
Even in 2014 the report finds that…
- The provision of business current accounts (BCAs) and business loans remains concentrated among a small number of major banks.
- Barriers to entry and expansion may be contributing to newer or smaller providers finding it difficult to enter and expand their business across the core business banking products.
- SMEs find it hard to differentiate between providers. There are low levels of shopping around and switching, and low awareness of alternative sources of finance.
More troubling is the aspect of the report which cites new, alternative lenders as being hampered in delivering services to SME’s because, allegedly, the mainstream banks are moving at a snails pace when authorising transfers or in waiving security on current loan arrangements for additional alternative lender charges to be rendered.
Two things occur. The notion of ‘level playing field’ is rendered useless in competition terms, and that the openness and clarity of most of the Social Finance sector, given their strong ethical and community focus, shines like a beacon across the current banking landscape.
Read the full Office of Fair Trading Press release on-line here.
The impact of the CDFI
Inside Community Finance 2013 from the Community Development FInance Association is an illustrative document to frame the current CDFI landscape in the UK. In the report the Financial Secretary to the Treasury, Sajid Javid MP, declares that there is still much to be done for the struggling SME.
On balance, however, the report shows the emergent strength of the CDFI movement and offers a road map for the immediate future, built on its past success.
Download a copy of the CDFA Report for 2013 here.
CDFI’s lending to social ventures in the 2012/13 period makes for positive reading…although more is always better (Ed.) The community development institutions lent £13 million pounds to 204 social ventures, the report tells us, This created or protected 1,900 jobs and represented a 37% increase in lending over the previous twelve month period.
Lending to individuals was equally impressive. CDFIs lent £19 million to some 40,600 people, which diverted 29,000 people from higher cost lenders, and saved over £7 million pounds in interest payments for those individuals.
Interestingly, the report illustrates that Community Investment Tax Relief (CITR), providing a tax incentive for those who invest om accredited CDFIs, was not a major driver of capital growth for the CDFI industry. Perhaps the delivery of the Social Investment Tax Relief scheme (SITR) this year will drive more money in from the cold for social based lending?
You can also gain insights into the reach of the various CDFI initiatives in the document.
In 2013, 93% of CDFI business loan recipients had been turned down for finance by a bank. Fifty seven per cent of loan recipients had previously been unemployed.
The report, in terms of potential reach, also has something interesting to say about the engagement of CDFIs and Local Enterprise Partnerships (LEP). CDFIs are hopeful, that with the roll out of the 2014-2020 European Structural and Investment Funds (ESIF), that CDFI/LEP partnerships can become active and effective.
You can see development and delivery guidance for ESIF here.
At eighty pages Inside Community Finance 2013 is a lengthy document. But it is structured with data, forecasts and case studies that make the CDFI story a telling one. Whether you are looking for evidence of the CDFI impact at local, region, national or European level – there’s something of interest here.
Tell your story everywhere!
In desperate economic times it is is important spread your success story as widely as you can. Impact is about perception as much as it is about delivery.
Getting your narrative and pictures together is one thing. Where and to whom should you send it? Below are details of useful tool kits and advice packs that can help you, whether you are a community group just starting down the road to social enterprise, or a fully fledged small business beginning to highlight the important ‘social’ message in your work.
Locality offer a great Press Kit. It explains in simple and accessible language, what makes a good story, How to ‘pitch’ your news to create wide interest. Importantly the information also shows you how to let the press know – what are the mechanics of sending a captivating email, for example.
The tool kit offers guidance about how to put together a formal press release, and lets you access a template to help you get it right. Not everyone is good at talking to reporters, or in making off the cuff comments that best reflect your project. Choose the right spokesperson and plan ahead.
See the Locality Media kit here.
And don’t forget social media. You’re reading this article in the SEEM on-line journal, but someone had to create it and populate the pages too. Locality also offer you a short social media tool kit to compliment the more traditional press release.
See the Social Media toolkit from Locality here.
The Guardian have a nice article on the ten most glaring mistakes you can make in a Press Release for your project or Social Business. Too may CAPS, too short or too personal? The media professionals at The Guardian offer some advice.
The Guardian – writing a good press release web pages here.
For the more commercially minded HubSpot, bringing something of a USA focus , offer their take with The Newsworthy Guide to Inbound Public Relations.
Although you will have to register on the HubSpot website, the download is free and they promise to give you insights in how to revive the Press release for the new media age.
HubSpot – get your free copy of The Newsworthy Guide here.
If you’re currently writing your press release, planning your campaign or just interested in reviving your project face to the world…help is here.
The SME graduate?
Amy Simmons and Emily Ward, two final year undergraduates at Nottingham Business School have just delivered an interesting research paper on …why are so few graduates working in SMEs within the UK?
Having worked in small business in their University placement the researchers had noticed how graduates appeared to be missing from the SME human resource landscape. The SME economic landscape is important. As their research states…
SMEs are the driving force towards the recovery of the economy as they account for 99% of the UK businesses. They also provide 67% of private sector jobs and contribute to 50% of the UK’s GDP.
Their research indicates that SME’s do not understand and have a lack of knowledge about graduates. What are their qualifications worth? What impact can a graduate have on my business? Graduate skills, even from major corporates clearly focus, their research shows, on ‘traditional’ skill sets. Team working and communication, team players required and a strong can do’ attitude.
A key reference in the Simmons and Ward research is the difficulty of actually connecting SME’s with graduates. Private sector ‘soft development’ of business often takes place outside of normal working hours in the UK. Key careers fairs and ‘meet and greet’ graduate events are traditionally mainstream day events.
Overall we warmed to their thesis, and find echoes in our worry about Social Business awareness, which we have written about in the past. How to enable graduates to recognise the Social Business sector as positive career progression path? The Simmons and Ward research seems to indicate that the issue is of an even more fundamental nature.
How to make graduates aware of the SME sector opportunities for dynamic personal and professional growth? Leaning towards social or community enterprise is probably the second, more subtle step to take in our raising awareness campaign?
Discover the Nottingham Trent University web article in full here…
Is the economy broken?
Although it has been around for a month or two now, we thought it was worth revisiting the Transforming Finance film from the pages of The Finance Innovation Lab.
Even at the start of 2014 we are burdened by news of multi-million pound loss making institutions paying multi-million pound aggregate bonuses. The schism between the ‘real economy’ in communities and the netherworld of internal trades in the financial markets is well illustrated in the film below.
The core message of the film is a critique of the current banking environment. Interestingly the voices heard and the opinions expressed are voiced by significant players in the finance innovation sector – what is not heard is the voice of disorganised fiscal radicalism, rather a careful, reflective and pointed analysis of the current financial situation.
The unstated, yet telling counterpoint, to the argument expressed is a positive acclamation of the Social Finance sector. The notion of financial institutions trading with each other, the making of money out of money, seriously impedes the fiscal health of communities and small business.
The delivery of innovation, profit and community welfare in the broadest economic sense is not impossible. We heard about it in this film.
Discover the Finance Innovation Lab here.