In an exclusive interview with Specialist Banking, Edward Siegel, chief executive at Charity Bank (pictured above), said that the most significant unmet demand in the non-for-profit sector was among smaller charities and social enterprises.

“Many of whom [want] smaller amounts, in terms of loan sizes, and they don't always have that bricks and mortar property security that makes the banks—including ourselves—that much more comfortable.

“So, we're looking at ways to enable us to address that segment to make smaller loans more efficiently, and with perhaps less security than we might have required traditionally.

“We've already begun to introduce [a] streamlined credit process for those smaller applications and it’s been quite successful for us….”

He added that the ethical bank would be targeting the sub-£250,000 market—the fastest growing segment of its business—which falls below its average loan size of £800,000 last year. 

According to its recent Impact Report, Charity Bank was the only finance option for 20% of the charities it lent to last year, equating to some £6.6m of funding.

These charities were said to either have been declined by other lenders, found alternative funders too onerous or expensive, or they didn’t approach other providers because they didn’t think they would be approved.

The bank lent £48.6m to charities and social enterprises in 2018 at a lending growth of 43%.