In an interview with Specialist Banking, Ed Siegel, chief executive at Charity Bank (pictured above), talks about the rising demand for ethical finance, and improving awareness of this particular sector.
You reported a 43% lending surge in 2018. Is there an increasing amount of charities and social enterprises in need of finance?
We continue to observe year-on-year increases in loan demand from charities and social enterprises as government and local authority grant and contract funding becomes increasingly scarce and more organisations are considering borrowing as a viable funding option.
60% of people want to know where their money is invested. Are people reflecting this attitude in their choice of banking providers?
We see the social consciousness of savers growing every year and, as a result, have doubled our deposit book since 2016. Both individual and business savers are increasingly concerned about how their money is invested and want reassurance that it is being used to support positive social change. This behaviour seems to be shifting from simply screening out bad things, ie not wanting to invest in tobacco or firearms, to active positive screening whereby savers want their money to be used in a positive way.
What can ethical banks do to improve the awareness of the industry?
As a collective, we must continue raising awareness about our purpose, why we exist and how we support charities and social enterprises. Transparency is key with this and it’s why we try hard to give our savers and investors information and insights about the projects we are funding and the organisations we are supporting. Our ‘Follow the Money’ campaign last year gave Charity Bank depositors the opportunity to see some of these projects first-hand.
If you could change one thing about the banking industry, what would it be?
I would like to see the sector spend less time inventing new and clever ways of making money and instead focus more on the basic, but rather essential social functions, that it is meant to fulfil; being a reliable steward of our savings and providing a financial catalyst for economic growth.
How did you get into banking?
Not through any particular passion but, after finishing university with an economics degree, it seemed like a practical path to pursue. I started out in commercial banking in the States, mainly with Credit Suisse, but after several fairly successful years there I was feeling rather unsatisfied. Fortunately, I was able to change direction a bit and found new roles where I could leverage my financial skills in ways that were more fulfilling for me as they produced much more appreciable social value, first managing SME loan programmes in the developing world with ShoreBank and, in the 10 years before I joined Charity Bank last year, managing social investment funds at Big Issue Invest.
If you didn’t work in finance, what would you be doing?
Well, after I left Credit Suisse, but before ShoreBank came along, I nearly took a job at a garden centre as I was quite keen on plants. So, who knows, I might be helping you to pick out your hydrangeas.
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