Welcomes proposals for a Development Bank in Wales
Responsible Finance welcomes the Minister’s recent announcements for a Development Bank of Wales and will work in partnership to further the success of businesses and local economies.
Responsible Finance members in Wales contribute significantly to local economies, lending over £27 million to 37,000 customers including £1.4 million to 316 businesses in 5 years, £16 million to 36,000 of the lowest 20% income households in 8 years and £2.8 million in energy efficiency loans to 500 customers in 5 years.
Responsible Finance supports the Minister’s view that the Development Bank must illustrate value for money and believes it should work with the private sector to leverage costs to businesses.
The new bank will create and safeguard 5,500 jobs pa on £1b over 5years, which works out at £36,000 per job. However this year, Responsible Finance members in Wales will create over 250 new jobs with only £1m, which works out to be approximately £4,500 per job. This equates to 800% more efficient use of finance. Access to just a fraction of funds from the new Development Bank will allow responsible finance providers to bring greater social and economic benefits to people, places and businesses when and where it is needed. We therefore look forward to working with the Minister and the new Development Bank to maximise and build on our current successful work.
Jennifer Tankard, Chief Executive of Responsible Finance said:
'Our members have real impact on the ground because they understand the communities and local economies they work within. Banks located in urban centres often don't have local intelligence and so struggle to accurately assess risk, especially for small business lending. This means many small but viable businesses don't receive the lending they need to grow. We welcome the new development bank for Wales but believe it will have the most impact if it works closely with responsible finance providers.'
Michael Brown, Chief Executive Officer of Robert Owen Community Bank, a Responsible Finance member said:
The challenge for the proposed Development Bank will be to channel capital to the smaller, established and specialist finance companies such as our own. As ‘grass-root lenders’ we understand local risk and market opportunities, and how best to unlock the economic potential within our communities through micro-lending. Wales needs a much more diverse, adaptable and independent finance sector working inclusively with all stakeholders in our economy. Whilst a Development Bank will be welcomed by the private business sector it can only be part of the more diverse and complex landscape that we need to evolve quickly in response to a rapidly changing world.
