New OECD report lauds Irish initiative to fund local communities

IRELAND’S leading Community Loan Finance provider, Clann Credo, has been identified as one of the best examples of good practice for social development in Europe, according to a recent joint report from the Organisation for Economic Co-Operation and Development (OECD) and the European Commission.

“Ireland has made significant progress in addressing the financial exclusion of community organisations and social enterprises,” through the provision of Community Loan Finance from Clann Credo, according to the report ‘Boosting Social Enterprise Development: Good Practice Compendium’.

The OECD-European Commission report was presented to Michael Ring, Minister for Rural and Community Development, by Clann Credo CEO, Paul O’Sullivan, at a meeting in Louisburgh GAA Club, one of more than 900 organisations that have benefited nationally from community loan finance provision.

Clann Credo has provided Community Loan Finance of almost €7.5 million to 45 groups in Mayo alone, for a range of community development projects and as bridging loan facilities pending receipt of LEADER funding.

In presenting the report to the Minister, Paul O’Sullivan thanked Minister Ring for his long and very dedicated commitment to tackling rural and community based issues.

He said that “it is particularly appropriate and relevant that the report is being presented to the Minister today in a rurally-based community organisation. The significant majority of loans are, in fact, taken up by groups and communities in small towns and rural communities across Ireland.

“This shows the extent of need that exists in these communities. It also reveals the determination of people who live in small towns and rural areas to create jobs, services and a better living environment for people at a local level.

Expressing appreciation of the government’s decision to appoint a Minister for Rural and Community Development to Cabinet level, Paul O’Sullivan acknowledged “the determination of Minister Ring to put community and rural issues firmly centre stage, including through his initiative to develop a clear policy on overall social enterprise development.”

The minister said that the OECD/ European Commission Report provides further evidence of the value of social finance services such as those provided by Clann Credo.

“I am very aware of the immense commitment and contribution made, day in-day out, by community, sports and similar organisations throughout the country. As Minister for Rural and Community Development, I am determined to ensure that this work is acknowledged and supported by government as effectively as possible.

“The contribution of Clan Credo in assisting community based initiatives to obtain funding and social finance loans in an accessible and user-friendly manner cannot be understated. It provides a very valuable support to enable many badly needed projects to survive and prosper,” he said.

John O’Toole, secretary of Louisburgh GAA Club, expressed his strong appreciation of the support of both the government and Clann Credo to community and sports development.

“Minister Ring, at both government and personal level, has displayed a very clear commitment to responding to community needs and requirements and, more importantly, delivered on that commitment.

“The role of Clann Credo has been equally vital, in that it enabled our club to take advantage of government supports and funding in ways more beneficial than through conventional banking arrangements, in particular through their ‘plain English’ approach to formal contracts and agreements,” he said.

The OECD/ European Commission Report, which examined social finance models in a number of OECD countries, also found that “Clann Credo developed a proven operating model over many years.”

It noted that the Irish model of “using private capital and the banking industry to provide wholesale and retail social finance to social enterprises is an innovative approach that could be replicated in other countries.”

This approach to sourcing funding, which was initially developed by Clann Credo in 1996, had “informed the government’s decision-making process through its own research and analysis.

Community Loan Finance differs from conventional bank loans in not requiring personal collateral guarantees and in evaluating a project based primarily on community benefit instead of commercial potential alone.

Clann Credo is Ireland’s largest Community Loan Finance provider. To date it has loaned over €90 million to over 900 community based organisations, typically through loans of €10,000 to €500,000.

The most common projects funded include community based job creation, services for children and the elderly, sports facilities as well as local tourism, heritage and recreational services