10 Ideas for Change: Community finance

The Evergreen Co-operative in Cleveland, Ohio, the inspiration for Preston Council’s community wealth-building initiative

Finance is at the heart of local change. The most resilient local economies are those in which money flows around a community, through progressive procurement and support for local services and businesses. Here’s ten of the best ideas from around the world for helping keep finance local:

1. Launch a small business fund connected to a time bank.
The Arroyo SECO community revolving loan fund is the first small business micro-loan programme funded and managed by a time bank. Recognising the fact that many small businesses were setting up as a result of the skill shares and exchanges within the time bank network, it decided to offer loans to members running or setting up small businesses and co-operatives. Loans range from $500-5000 and are aimed particularly at women and those in economic distress as well as ventures that fit with the time bank ethos. The loans are paid through the time bank’s credit union partner, with loans fees paid in time credits to the time bank.

2. Set up a Community Wealth Creation initiative.
Working with the Centre for Local Economic Strategies, Preston Council is researching how much of the procurement spend of institutions – including Preston College, the University of Central Lancashire and Preston Council itself – actually stays in the local region. It aims to work with these ‘anchor’ institutions to increase their local purchasing power, protecting and keeping jobs in the local community. For more info: click here.

3. Build partnerships between housing associations and affordable credit providers.
My Home Finance is a social enterprise set up by the National Housing Federation to tackle the use of payday lenders by those unable to access mainstream finance. It is supported and funded by a partnership of housing associations as well as corporate and other partners. It began with a number of high street shops in the west midlands offering basic bank and savings accounts and small amounts of credit and has since expanded to the north west and south west of England.  Somerset-based housing provider set up a partnership with Somerset Savings and Loans last year.

4. Create a local investor network.
The first Local Investment Opportunity Network (Lion) was set up in Port Townsend in Washington. A Lion network is a group of local citizens who come together to help fund and support local businesses. They are now spreading across the US.

5. Turn post offices into community enterprise hubs.
The RSA has proposed that post offices use their position at the heart of the community to become hubs for local enterprise. These community enterprise hubs could see the post office offer business support and an outlet to maker communities, support local training and employment and run local clubs and events to help tackle social isolation. The Post Office has already helped subpostmasters to become more entrepreneurial through its community enterprise fund. To read the report click here.

The Totally Locally campaign has spread to more than 50 places

6. Pool local investment.
Lendlocal connects investors to borrowers in their local community and Community Development Finance Institutions across the country use investment to on-lend to small businesses and start-ups. In the US and Canada a number of community economic development investment funds pool capital from an area to invest to local people and businesses.

7. Help communities raise investment through community share issues.
Co-operative and Community Finance has a dedicated fund to support communities wanting to raise investment through a community share issue. Community-owned ventures such as community pubs or shops and renewable energy projects can apply to have their community share issue underwritten and supported by the social purpose lender.

8. Slow down your money.
Just as Slow Food helped bring awareness back to the richness of local food culture, so Slow Money is bringing money back down to earth. Slow Money chapters are spreading around the world and local investment clubs are springing up. One example is No Small Potatoes in Maine, which makes small loans to strengthen the local food economy.

9. Make mortgages easier for community shops.
Recent legislation has made the path easier for community groups who want to run local shops, pubs and other buildings. But finance is still an issue. A new initiative between the Ecology Building Society and the Plunkett Foundation will support local groups wanting to save rural community shops and make it easier for them to get mortgages.

10. Support local independent traders.
Totally Locally helps communities to promote the value of local shopping, celebrate their high street and boost their local economies. Since setting up in 2012 it has spread to over 50 towns in the UK, Australia and New Zealand. Through its initiative markets have been set up, pop-up shops and co-working units launched and a whole lot of local shopping has happened.